IMG 3800
Business Plan Cannabis Sativa Oü
Timo Haara ()
Lorem Ipsum
00000 CIty
Estonia
Antti Kaipila ()
Lorem Ipsum
00000 City
Estonia
Table of Contents
Executive Summary
Implementation Details
Industry Analysis
Competitive Analysis
Marketing Strategy
Project Plan
Financials
Milestones
Exit Strategy
Social Return on Investment
Summary
Executive Summary
The market for products based on Cannabis Sativa plant are a growing industry. Companies in countries all over World, including Europe and Estonia are already making various different products based on the plant. The market is growing at the moment as consumers are becoming more aware of the great and often successful products, created using the plant as raw material.
We have already invested over €3 000,00 of our personal money on the venture and are now incorporating as Cannabis Sativa Oü with an initial capital of €2 600,00. The money that has already been spent on the venture will be brought back to the company as we move the excising rent contracts for farm buildings and land to the company.
Antti Kaipila is also commited to investing more money to Cannabis Sativa Oü if needed. An option is also left open to find more investors in the future.
The company is going to be focused on three main business sectors.
Seed production & sales.
Cultivating farm land for fiber, bio ethanol and food products.
Medical cannabis products for medical use.
We firmly believe in developing these three lines of businesses with annual plans for products.
The Solution
To meet our company goals we plan to develop the three main business sectors in the following ways during first year of operations.
Seed production and sales
6 hectares of land in Lihula is to be harvested in co-operation with the Police and other possible local authorities. First years harvest is to be utilized in the following ways regarding seed production & sales:
All produced seeds will be used for cultivating next years harvest.
The produced seeds are to be certified by local Estonian authorities for 1st generation seeds named Estonia 1.
Possibly importing & selling seeds from other EU countries in co-operation with local authorities.
Cultivating farm land for fiber, bio ethanol and food products
6 hectares of land in Lihula is to be harvested in co-operation with the Police and other possible local authorities. First years harvest is to be utilized in the following ways regarding fiber production, bio ethanol production and food products
1. All fiber parts from the collected plant is to be separated and stored.
2. Use bio ethanol production process to separate the fiber from the plant material.
3. The leaf material and possible other clean remains of the harvest can be baked to pastry and tee products, sold in a commercial store operation in Tallinn.
Medical cannabis products for medical use
New sterile and secure premises need to be rented with at least 5 year rent contract to facilitate medical cannabis production. Old stone buildings like farm house or commercial buildings in Lihula can be utilized for this purpose. Steps in the business plan are as follows:
Negotiate letters of agreement from Finnish pharmacies already selling competing products or otherwise interested in starting sales.
Apply for a premit from Sotsiaal Ministeerium of Estonia to start production.
Rent required space and build up sterile & secure environment for indoor growing.
Start production with already certified Cannabis Sativa genetics used in the medical industry, like Jack Herrer, used by Bedrocan company in the Netherlands.
With these main steps the plan is to grow the company at a reasonable pace, make profit and utilize the produced plant in an optimal way.
Implementation details
This section describes the implementation details for the three main business sectors. The goal is to describe the three different business sectors from main business process stand point and demonstrate the main industrial processes used in each sector of the business.
Seed production & sales
The plan is to rent 50-100 hectares organic land in Lihula or near by municipalities to start cltivation work in early spring 2011. The seed produced during farming season in 2010 will determine the need for the land. Cannabis Sativa Oü only aims to producs Cannabis Sativa plants using organic methods and the plan is to qualify for the EU Organic Farming logo use with all or most products manufactured from our own plan production.
By working together and sharing resources with local partners like Rannan Rantso horse farm, we can farm the land in a cost effective way. Needed storage, basic production facilities and hired help can be organized easily trough local partners, already operating in the area.
Depending on conditions (weather, legal, bird feeding), after the second harvest season we can start selling seeds to other operators as well. Also depending on weather conditions and our ability to prepare the land for early cultivation in 2011, we should be able to produce 2 harvests in Lihula with our Estonia 1 seeds during the growing season.
Seed certification
Our first generation Estonia 1 seeds will be certified with the appropriate ISTA procedures in Estonia. We have already been in contact with a local representative and plan to certify the seeds for the 2011 growing season. With a certified seed, we can produce a standard products that has a safe and consistent output for larger industrial needs in the future. Generation 2 and 3 can already be used for most industrial processes dealing with oil based product manufacturing. Examples of such products might be hemp hand creams or other oily products.
Importing & selling seeds from other EU countries
It is possible to jump start the seed business by importing Cannabis Sativa seeds from other EU countries as needed. Based on our inquires, seeds should be available at reasonable prices in Poland and Czech Republic. Importing them to Estonia should be possible based on local laws. These seeds can then be sold to the growing industry customers and consumers.
Seed marketing and sales can be done trough Internet, using a web site we have already reserved www.scandinavianseeds.com domain for. Building the web site can be done by one of the founders Antti Kaipila, trough his extensive experience in the online B to B and B to C software business.
Shipping and storage facilities should be located in Lihula to help centralize the operations and save on operational costs. Generation 2 and 3 Estonia 1 seeds will be sold trough the web site as well.
Marketing
Marketing efforts for the seed business should focus on online marketing trough Google, Fcebook and other online medias.
Cultivating farm land for fiber, bio ethanol and food products
The harvest for season 2010 should be tested for it's THC content with co-operation from the local authorities. After these tests, the plant material can be used to manufacture bio ethanol and food products. The plan is to try to utilize all parts of the plant as effectively as possible.
Fiber production
The base of the Cananbis Sativa plant contains the strongest and most durable natural fibers available. The fiber can be extracted from the base of the plant using varying methods. The methods we utilize must be environmentally friendly and cause as little strain on the environment as possible. The collected fibers can be either stored for future use or if a suitable manufacturing partner is found, used to produce clothing products or sold directly as raw material to this industry locally.
Bio ethanol production
Producing bio ethanol from the plant material is an ecological way of separating the fibers from the base of the plant. The manufacturing process is divided in to two main stages: Brewing and distillation.
Brewing
In the first stage, plant material (base of the plant) is put into a liquid solution and utilizing a simple yeast based process the fiber can be extracted. After the "brewing" process fiber can easily be extracted and rinsed from the solution and the remaining solution collected and moved to the distillation process.
This is highly advantageous compared to plain water based solutions as the produced ethanol speeds up the fiber separation process and the end product can be utilized and does not go to waist. Pure water based solution produces a toxic left over which can be a burden to the environment.
Distillation
Distillation of the remaining solution can be done relatively easily, using old distillation equipment or new ones can be built relatively easily. The distillation process is described in more detail in Appendix 1.
The above image gives a simple to understand picture of the basic distillation process. The distillation process produces three main products:
High quality bio ethanol that can be sold to petrochemical industry as raw material for bio diesel
Non toxic steam
Solid, moist by products that can be sold as food for live stock
Trough this process, no toxic waste is produced and maximum benefit can be extracted from the plant.
Food products
The beard and leaf parts of the plant can be utilized for food products like tee and pastry. Leaf material can be separated and cleaned by hand in Lihula with relatively low costs. Leaf material can be used to produce a high quality organic tee product that can be sold in three formats:
Dry, packaged Cannabis Sativa tee product, sold by gram trough retail stores.
Cannabis Sativa tee concentrate or tee, manufactured trough a cold distillation process to eliminate all traces of TCH from the end product.
Cannabis Sativa tee, manufactures trough a hot tee brewing process, much like normal tee. The end product should have a low TCH content, that is low enough to be sold to general public.
The beard parts of the plant can be separated and cleaned by hand during the same process and used as baking raw material to produce pastry products.
The following recipes are planned so far:
Cannabis Sativa rice cakes
150g butter (salty)
200g dark, organic chocolate
2 dl raw, organic sugar
3 eggs
1dl plain flour
Hint of cinnamon
2 tbsp vanilla essence
75g dried ground Cannabis Sativa bread
Rice cakes (number varies)
Start with dry Cannabis Sativa bread leaves and grind them in a coffee grinder to a fine powder. Heat butter and chocolate. Stir until smooth. Stir in other ingredients. Add eggs one at a time. Add vanilla extract and stir in flour mixture. Cover rice cakes with the chocolate carefully on a baking paper and let cool in a fridge.
Cannabis Sativa Chocolate Brownies
150g butter
200g squares of dark chocolate,
4dl sugar
5 eggs,
2dl of flour
1 t spoon vanilla extract
50cl dried ground Cannabis Sativa bread
Add nuts to create Cannabis Sativa But Brownies.
Start with dry Cannabis Sativa bread leaves and grind them in a coffee grinder to a fine powder. Heat butter and chocolate in a frying pan. Stir until smooth. Stir in other ingredients. Add eggs one at a time. Add vanilla extract and stir in flour mixture. Bake in an owen for 50 minutes at 200C using a baking paper.
Medical Cannabis products
The vaporization process
Medical Cannabis Sativa use trough the vaporization process is the easiest way to apply the medication. What is commonly referred to as the recreational use of THC potent Cannabis Sativa strains is mainly utilizing the smoking process to heat the plant material to the appropriate temperature.
The vaporization process trough accurate vaporization devices, like the Volcano (abt 500EUR retail price) manufactured in Germany offers a clean alternative. The vaporization process does not produce carcinogens which are unavoidably inhaled trough the vaporization process. The vaporization process can be compared to a sophisticated hair dryer. The devices generally consist of a accurate heating element with analog or digital controls. Some devices like the Volcano also utilize a standard pump and vapor collection bag.
The vaporization process vaporizes the various oily cannabinoids from the plant material and they can be easily utilized by patients. Accurate temperature controls also provide a way to control the various cannabinoids released as different cannabinoids are vaporized at different temperatures. The application and use of the devices can be easily taught to patients by medical professionals.
Successful patient cases and medical indications are available for increasing number of common diseases.
We have been in contact and negotiated many pre agreements with various medical service companies ranging from cancer treatment facilities to alcohol treatment facilities.
Industry Analysis
Cannabis Sativa Oü must understand the hemp product market and must also comprehend the customers and competitors operating in agricultural, Internet software, restaurant and food industry. This section aims to describe the current situation in these markets.
Agricultural Cannabis Sativa market
Current size and Industry Trends
Based on a article Industrial Hemp: What Can We Learn from the World Market, by Foresight the industrial global market for industrial Cannabis Sativa was worth only about $10 million US dollars in 1996. The article was published in 1998. Global market for Cannabis Sativa products in 2009 was estimated at XXX by XXX.
This shows a significant growth in the market during the last 13 years. Today as I write this I can walk to any of the local stores that I live near by in Tallinn Estonia and buy multiple different Cannabis Sativa based products like Swiss Cannabis tea or energy drink, imported from the Switzerland or Cannabis Sativa beer, imported from Germany.
In addition to these, already readily available products, I use Cannabis Sativa hand cream and medical Cannabis Sativa to treat alcoholism on a daily basis.
Other notes on the market
Finding local business partners in Estonia has been relatively simple. The unemployment rate in the are where we plan to focus most of our operations in Lihula is about 30%. Experienced labour for agricultural work can be found relatively easy trough local business partners.
We have also gotten positive television coverage for our activities both in Estonia and Finland.
Restaurant and food production markets
Current size and Industry Trends
Restaurant and food production markets in Estonia are viable and growing. Growing tourism from countries like Finland and Sweden is fueling a large part of the local economy and is effecting especially these markets. Relatively inexpensive labour costs and affordable rent prices in prime locations like the Old Town in Tallinn are driving the markets.
We believe the markets are ready for new kind of, Cannabis Sativa based products.
Other notes on the market
Restaurant and food production markets require a lot of professionalism and experience. All products are consumed by customers internally (eaten) so high quality control measures must be put in place. The agricultural side of the business must follow these strict guidelines and produce an eatable product with extremely low or no measurable TCH content at all.
The marketing value and other health benefits gained by eating cannabinoids and healthy Cannabis Sativa fibers can help us
Medical Cannabis Sativa markets
Current size and Industry Trends
Medical market for Cannabis Sativa based products is also a relatively new market. Cananbinoid research is being done for example in Finland at the University of Kuopio. The relatively newly discovered entocannabinoid system in humans is fueling the development of many new revolutionary and cheap to produce / market medical products.
Companies in countries like United Kingdom, Netherlands and United States are producing medical grade Cananbis Sativa products and selling them trough medical distributors to pharmacies all over europe. Cannabinoids like the controversial THC have been found to re generate dead cell tissue and provide new ways to treat diseases like cancer, the MS disease and also as a general pain reliever.
Producing a product that meets medical standards requires indoor growing. Cannabis Sativa produced for food production is easier to cultivate in large fields. Large production facilities are already built, being built and money is flowing in to the industry in many countries.
The market is proving the product to be safely distributable and effective cure for multiple common problems. Traditional medical industry does not share a large interest in the business mainly because obtaining patent applications are practically impossible.
Cannabis Sativa based medication sold under the product name Bedrocan, manufactured in the Netherlands is already sold in Finland trough at least two pharmacies to roughly 20 people with a special license requirement from the Finnish FIMEA goverment organization.
CWPharma company in the United Kingdom is also producing a medical product called Sativex and is a publicly listed company in the London stock exchange. The product is manufactured from regular Cannabis Sativa, grown in sterile environments and processed trough a relatively simple distillation process.
The company employs about 150 people in United Kingdom.
Other notes on the market
The market is a growing market, increasing general well being for people with various elements. Social values for the company founders are high and the aim is to grow a socially and environmentally beneficial company. Social implications of the business plan are detailed with more accuracy in it's own chapter at the end of this document.
Growth Potential
Everything you read about hemp online seems to be turning out true. The markets have shown us that there's viable products that can be created around Cannabis Sativa production. Many successful companies have already grown around the Cannabis Sativa markets already. Couple of examples of these kind of companies would include the German Storz & Bickel company, manufacturing medical grade vaporization devices, Finnish Zen Grow producing consumer friendly hydrophobic growing systems and of course the multiple Frowshops that support local semi-legal home growing activities.
To us this signifies a growth potential in the market as other industries are investing money in to Cannabis Sativa ready or related products. Many of the companies are marketing their products to other markets too, besides just Cannabis Sativa related market. In some examples these other uses are hard to believe tough. Like the Storz & Bickel company, employing about 40 people in Germany is marketing their Volcano vaporizer for avant-garde cooking. These kinds of efforts are mainly focused to obscure the picture and create an illusion of multi purpose devices that in actuality are used mainly for Cannabis Sativa related markets. This we believe is mainly caused by the current legal & political controversy surrounding the plant.
We think a new generation of people with more awareness is emerging. Cannabis Sativa is no longer seen as only a bad, narcotic plant but other uses have been tested and proven and most countries are relaxing their legislation, even to allow legal cultivation and sales of the indoor grown, more THC rich varieties.
Our plan is to operate in synchronization and co-operation with the local laws, try to predict their changes, prepare for them and produce taxable profit.
Based on the available data I have compiled a table of the size of Cannabis Sativa market in Canada to illustrate the size of the legal markets over the last 5 years. Figures are based on Hectars of cultivated Cannabis Sativa. The data is hard to find as the industry is relatively new.
Some sources claim 300% market growth world wide over the past few years. We have used a moderate 70% growth estimate for years 2010 and 2011 seen during 2008 - 2009 in Canada. Weather and legal "atmosphere" is of course a big factor in the business.
Year
2006
2007
2008
2009
2010 (estimated) 2011 (estimated)
Cultivated hectars 19 458
6 132
3 259
5 602
9 523 16 189
Growth
-
-70% -50% 70% 70% 70%
Value (1000kg / €2000 / hectar) €40M €12M €6.5M €11M €19M €32M
Total No data available No data available No data available No data available No data available No data available
Medical cannabis markets
Current size
Potential customers that we have signed letters of intent as production is legally started are as follows:
Linnan Apteekki in Turku Finland XXX
Industry Trends
The medical industry for Cananbis Sativa is a globally growing market as more and more medical indication for use are being built around the world by reputable organizations like large universities. The medical industry as a whole is starting to see the value in the cannabinoid medication. Synthetic cannabinoids are also being developed but according to our sources the field of research is still at it's infancy and is facing many practical problems.
Growth Potential
What is the value of your business based on? Here you should describe how industry growth will affect your business potential.
Table 1 Based on Data from Reliable Data, Inc, the Educational Software Market Size
Year
2008
2009
2010
Total Students
299,800
350,000
452,000
Total Revenue Spent By Students
$43,434,600
$85,416,150
$113,581,225
Restaurant and food production markets
Current size
How many customers exist currently? How much money do they spend? What products or services do they use today?
Industry Trends
What changes are currently happening in your market that might effect your business?
Growth Potential
What is the value of your business based on? Here you should describe how industry growth will affect your business potential.
Table 1 Based on Data from Reliable Data, Inc, the Educational Software Market Size
Year
2008
2009
2010
Total Students
299,800
350,000
452,000
Total Revenue Spent By Students
$43,434,600
$85,416,150
$113,581,225
Competitive Analysis
Who is your competition? A competitive analysis should describe your competitions' strengths and weaknesses. Compare your business to them. What things do you do better and what things do they do better. Admitting weaknesses is OK - in fact, investors will see right through a competitive analysis section that says, "We have no competition." or "We are better in every respect than everyone else!". If you are a non-profit, your competition may be less obvious - where do the donations go today or where are these services provided today?
Direct Competition
Who offers a product or service very similar to your own?
Indirect Competition
Your potential customers are spending their money somewhere today, so there is always competition. You should include an indirect competition section if you believe there may be competition from other industries that you'll need to address.
Marketing Strategy
Marketing strategy for the products vary depending on the business area. We have broken down the key elements of the marketing strategy based on the three main business lines.
Seed production and sales
Marketing and Promotion
We have already reserved the scandinavianseeds.com Internet domain and aim to build a web site to this address. This web site will be one of the web properties owned by the company. The aim is to channel all seed sales in the future trough this web site and promote the site using Google ad words, posting article on related forums and of course word of mouth marketing.
We have excising good contacts with the main media outlets in Finland and Estonia and plan to utilize these to produce positive publicity for the seed business.
Channels of Distribution
The seed business is done to end customers trough the web site. Logistics for delivery are relatively easy to build and operate trough local logistic companies like Eesti Post or other local logistic service providers.
Customer Retention
For customer retention we plan to build a mailing list for interested customers, where existing customers can opt in to receive promotional and informational material. Of course key strategy for customer retention is to produce a quality product that produces good, consistent yields.
Alliances
Busniess alliances are important to any business. We have already successfully co-operated with local businesses in the Lihula area to start the agricultural Cannabis Sativa production. Our main co-operation partner in this business is now and in the forseeable future the Ranna Ranso ranch in Lihula. Co-operation on our test fields has proven succesful and we plan to continue co-operation in the future.
What partnerships have you or will you form to become successful? If you didn't discuss advisers in a previous section, you may want to include here who will advise you. These may be mentors, bankers, or friendly partnerships that plan to help you get started.
Project Plan
How do you plan to build this business or service. Describe who will be involved and give a detailed timeline.
Timeline for Launch
Figure 1: Timeline for Launch
Year 1
Months 1 through 12
Raise Money
Year 2
Months 12 through 18
Months 18 through 24
Hire staff and begin design phase
Begin designing game levels
Year 3
Months 24 through 30
Months 30 through 33
Months 34 through 36
Development tools
Alpha Stage Testing
Promotion, conventions
Year 4
Months 37 through 48
Have 30,000 users
Year 5
Months 49 through 60
Goal reached: 120,000 users
Alternative Launch Approach
It shows good planning on your part to plan for failure. Here you should describe your alternative plans if any of your key milestones are missed.
Location of Operation
The main facilities of Cannabis Sativa Oü are already deployed and more in process in Lihula Estonia. Availability of great agricultural land at competitive prices is one of the main reasons for starting the business in Lihula. Other significant factors are the local partners willing to co-operate with the agricultural production.
We have also done a lot of research and looked at the buildings available for rent in the are. There's many vacant agricultural buildings that can be converted to sterile indoor growing environments with relative ease and modest costs.
Company Structure
The company will be founded by two partners Timo Haara and Antti Kaipila. Antti Kaipila will serve as the Head of the board and Timo Haara as the Chief Executive Officer. Other regular staff can be hired on permanent job contracts, hired for short time employment with the help of partners or directly.
Other forseeable staffing requirements are as follows:
One agricultural production manager in charge of the agricultural production and seed sales in Lihula.
Two or three skilled restaurant workers for the Cannabis Sativa Tea House, located in Tallinn.
One skilled person responsible for the indoor growing facilities and co-orinating their security.
Financials
In order for your business to be successful, you'll will need X million invested into the company by what dates? Your financial section should explain your financial plans in prose and in table form.
Financials typically include five year projections. What? Don't know how much money you'll make in five years? At this point, it is understood that your financials are only estimates. You should be able to concretely define your operating expenses, but you'll need to rely on your research into the industry and market analysis to decide on your possible growth rates and income potential. Be sure that any assumptions you make (number of customers, growth rates, etc) are clearly explained.
The financials that follow are intended to provide a general idea of how much it will cost to develop and launch your business, and where the money goes. The financials are estimates, and are intended to be used as a guide, they are neither goals nor guarantees.
Use this space to further describe how much money you need invested and what it will enable you to do.
Income Statement Figure 2: Five Year Income Statement Projection
Year 2
Year 3
Year 4
Year 5
Sales:
Sales Allowance
Net Sales
Operating Expenses:
Wage Expense
Depreciation Expense: Hardware
Depreciation Expense: Software
Rent & Furniture Expense
Supplies Expense
Total Operating Expense:
Other Expenses:
Miscellaneous Expenses
Selling Expense
Marketing Expenses
Total Other Expenses:
Total Expenses:
Tax
NET INCOME
These numbers are based on information from the following sources:
(a) Wages based on headquarters in Seattle, WA determined through monstersalaries.com
(b) Hardware priced determined from <a hardware vendor's website>
(c) Software prices determined through Google Searches: Linux, Maya, Oracle
(d) etc.
Summarize your results here: Revenue of X million will be realized in year 4, followed by revenue of nearly Y million in year 5. Net income will be positive for the first time in year 4. Paying employees and purchasing the hardware and software to support employees form the majority of business expenses.
Balance Sheet
Figure 3: Five Year Balance Sheet Projection
(At Year End)
Year 1
Year 2
Year 3
Year 4
Year 5
Assets:
Cash
Hardware
Less A/D1
Software
Less A/D1
Total Assets
Liabilities
Wages Payable
Rent & Furniture Payable
Taxes Payable
Total Liabilities
1 Subtract appreciation and depreciation costs from the previous line.
Cash Flow Projections
Discuss your cash flow strategy here: Cash is the lifeblood of any new venture. We are committed to maintaining a positive cash flow from day one. Lighthouse has carefully projected the payment of expenses in a manner which preserves cash at all times. Payments on wages, rent, and furniture for the last months of one year will be paid in the next year. Taxes will also be paid in the year after they are incurred, which is normal for a partnership.
Figure 4: Five Year Cash Flow Projection
(At Year End)
Year 1
Year 2
Year 3
Year 4
Year 5
Cash Inflow:
Cash, Investments
Cash, Beginning
Cash Inflow from Operations
Total
Cash Outflow:
Wages Paid from Year Before
Wages Paid this Year
Purchase of Equipment
Rent & Furniture Paid from Year Before
Rent & Furniture Paid from This Year
Supplies
Miscellaneous Payments
Conventions, Selling, & Marketing
Taxes from the Year Before
Total
Cash, End:
Summarize your expenses in prose below the cash flow table.
SaleS Projections
How will my sales grow over the next five years? What are these projections based on? You may wish to include a table that describes each year of your five year plan that will have sales. The example below is for a business that doesn't expect sales until year 3.
Figure 5: Sales Projections
Year 3
Number of New Customers
Number of Returning Customers
Sales Total
% Growth in Revenue
Jan - March
30,000 @ $5 each
0
150,000
April - Dec
10,000 @ $5 each
10,000 @ 9.50 each, 20,000 @ $100
478,333
76%
Sales for Year 3
$628,333
Sales Allowance for Debt (10%)
62,833.30
Net Sales for Year 3
$565499.70
Staffing
Describe your staffing needs and costs. You may wish to include a graph like the one pictured below. Delete it and replace it with your own image.
Sustainability
The final section of your charts should include a chart detailing cash flow and net income. When will you reach positive cash flow? When will you break even? When will you pay back investors?
Milestones
Describe your milestones in a bullet list.
Within one year raise $4 million (approximately 70% of the total funding needed).
Within six months of game development, begin work on tools and game mechanics.
Six months before launch, finish alpha testing and begin beta testing.
By the end of year three, launch game.
Three months after launch, have 300,000 users.
Five years after embarking on this task, reach your goal of having 120,000 dedicated users.
Exit Strategy
No current exist strategy exist for the principal owners of the company. The plan is to grow the business for the foreseeable future and make profit.
Social Return on Investment
Whether you are a for-profit or non-profit, everyone should consider what their social impact on their community will be.
For a non-profit, the SROI is the main tool to advocate to funders how dollars will be converted into social impact. It includes a detailed explanation of the possible impacts that the project will have on society and often contains quantitative analysis. Quantitative analysis might calculate tax savings for government welfare agencies to less tangible measurements such as the impact of improving community relations with their homeless population. It is a tool to answer the question “What will our impact be on the community?". This analysis can include financials, but need not if the impact is too difficult to predict.
But I'm a for-profit, I don't have a social return? I just want to make a profit.
Entrepreneurs create businesses for many reasons. From a desire to get rich to being part of something new, the reasons are diverse. The absence of a SROI from most business plans is the tell-tale sign that entrepreneurs don’t consider this a necessary step to start a company. All businesses have a return on investment, where they attempt to predict what the financial return will be given X dollars invested. The same should be done with social impact. Given X dollars, what will the social impact be? Entrepreneurs often forget to reflect upon what this good may be, but that does not mean it is absent. A new venture doesn’t need to save the world, but it is crucial that the entrepreneur discover what the good is they wish to create. Maybe the entrepreneur wishes to create a good work environment and support the employees and families of their employees and customers. Perhaps the entrepreneur wishes to earn a profit so that they may make donations to a favorite charity or maybe the services itself offered by the company can have a positive social impact. Regardless, there is no entrepreneur without some innate desire to do good – the mission is to discover what this good may be.
Summary of Social Impact
Bullet list of areas your venture will have a positive social impact on.
Example:
Educate people on the positive effects of Cannabis Sativa based products
Employ people in Estonia and provide steady income
Help patients with difficult illnesses like cancer, MS disease and other nervous system pain related diseases
Description of whom or what will be impacted.
The main social impacts
Example: E-Mentoring will provide mentoring to high school students in non urban settings. These students will be provided with a mentor in a career they have interest in, but may not be represented in their rural area. Each student and mentor will be guided through a process of mentoring and career guidance by E-Mentoring counselors, culminating in a capstone project by the student describing their post graduation goals.
Metric to evaluate Return on Investment (Optional)
Example: If the social impact can be quantified, you should describe it in a manner similar to your financials. Redf (redf.org) has a fantastic SROI model that you should consider using as a starting point.
Short Term Impact
At the end of the week, what will your venture have accomplishments?
Long Term Impact
The five year plan is to keep the company profitable and the biggest player in the legal Cannabis Sativa market in Europe.
Conclusion
We firmly believe that Cannabis Sativa has been probably of the most misunderstood plant in human history. The plant has great characteristics for various different industry needs. We believe that with working positively with the local authorities we can grow Cannabis Sativa in to a proitable business and provide employment to Estonian people.
We also wish to have positive social impact trough good employment policies and make donations towards Cannabis Sativa research in the future as the business becomes profitable. |
