How to create a financial forecast for a Bangladeshi restaurant?
Developing and maintaining an up-to-date financial forecast for your Bangladeshi restaurant is key in order to maintain visibility on your business’s future cash flows.
If you feel overwhelmed at the thought of putting together a Bangladeshi restaurant financial forecast then don’t worry as this guide is here to help you.
We'll cover everything from: the main objectives of a financial forecast, the data you need to gather before starting, to the tables that compose it, and the tools that will help you create and maintain your forecast efficiently.
Let's get started!
Why create and maintain a financial forecast for a Bangladeshi restaurant?
The financial projections for your Bangladeshi restaurant act as a financial blueprint to guide its growth with confidence and ensure its long-term financial viability.
To create them, you will need to look at your business in detail - from sales to operating costs and investments - to assess how much profit it can generate in the years to come and what will be the associated cash flows.
During challenging market conditions, maintaining an up-to-date financial forecast enables early detection of potential financial shortfalls, allowing for timely adjustments or securing financing before facing a cash crisis.
Your Bangladeshi restaurant's financial forecast will also prove invaluable when seeking financing. Banks and investors will undoubtedly request a thorough examination of your financial figures, making precision and presentation essential.
Need a convincing business plan?
The Business Plan Shop makes it easy to create a financial forecast to assess the potential profitability of your projects, and write a business plan that’ll wow investors.
What information is used as input to build a Bangladeshi restaurant financial forecast?
A Bangladeshi restaurant's financial forecast is only as good as the inputs used to build it.
If you are creating (or updating) the forecast of an existing Bangladeshi restaurant, then you mostly need your accounting information, key historical operating non-financial data, and your team’s input on what to expect for the coming years.
If you are building financial projections for a Bangladeshi restaurant startup, you will need to have done your research and have a clear picture of your competitive environment and go-to-market strategy so that you can forecast sales accurately.
For a new venture, you will also need a precise list of the resources needed to keep the Bangladeshi restaurant running on a day-to-day basis and a list of the equipment and expenditures required to start the business (more on that later).
Let's now take a closer look at the elements that make up your Bangladeshi restaurant's financial forecast.
The sales forecast for a Bangladeshi restaurant
The sales forecast, also called topline projection, is normally where you will start when building your Bangladeshi restaurant financial forecast.
Creating a coherent sales projection boils down to estimating two key drivers:
- The average price
- The number of monthly transactions
To do this, you will need to rely on historical data (for an existing business), market research data (for both new and existing Bangladeshi restaurants), and consider the elements below:
- Location: The location of your restaurant can greatly impact the average price and number of monthly transactions. If your restaurant is located in a busy and popular area with high foot traffic, you may be able to charge higher prices and attract more customers. On the other hand, if your restaurant is in a less populated or remote area, you may need to lower your prices to remain competitive and attract customers.
- Menu: Your menu offerings can also affect your average price and number of monthly transactions. If your restaurant offers a diverse and authentic Bangladeshi menu with unique and high-quality dishes, you may be able to charge higher prices and attract more customers. However, if your menu is limited or lacks authenticity, you may need to lower your prices and may have fewer monthly transactions.
- Seasonal Demand: The demand for Bangladeshi cuisine may vary depending on the time of year. During holidays or special events, there may be an increase in customers looking to try new and cultural foods, resulting in a higher average price and number of monthly transactions. On the other hand, during slower seasons, you may need to lower prices or offer promotions to attract customers and maintain a steady flow of transactions.
- Competition: The presence of other Bangladeshi restaurants in the area can also affect your average price and number of monthly transactions. If there are several competitors in the same location, you may need to lower your prices to remain competitive and attract customers. However, if you are the only Bangladeshi restaurant in the area, you may be able to charge higher prices and have more monthly transactions.
- Customer Reviews: Positive reviews and recommendations from satisfied customers can greatly impact your average price and number of monthly transactions. If your restaurant receives good reviews and word-of-mouth referrals, you may be able to charge higher prices and attract more customers. On the other hand, negative reviews or lack of reviews can result in lower prices and fewer monthly transactions.
After the sales forecast comes the operating expenses budget, which we will now look into in more detail.
Need a convincing business plan?
The Business Plan Shop makes it easy to create a financial forecast to assess the potential profitability of your projects, and write a business plan that’ll wow investors.
The operating expenses for a Bangladeshi restaurant
Once you know what level of sales you can expect, you can start budgeting the expenses required to operate your Bangladeshi restaurant on a daily basis.
Expenses normally vary based on how much revenue you anticipate (which is why, from experience, it is always better to start your forecast with the topline projection), and where your business is based.
Operating expenses for a Bangladeshi restaurant will include some of the following items:
- Staff costs: This includes wages for your kitchen staff, servers, and any other employees. You may also have to factor in overtime pay, benefits, and payroll taxes.
- Accountancy fees: You will need to hire an accountant to handle your restaurant's financial records and tax filings. This will incur a monthly or annual fee.
- Insurance costs: You will need to purchase various types of insurance for your restaurant, including liability insurance, property insurance, and workers' compensation insurance.
- Software licenses: You may need to purchase software licenses for your point-of-sale system, accounting software, and any other software used in your restaurant.
- Banking fees: Your bank may charge fees for services such as processing credit card payments and maintaining your business account.
- Food and beverage costs: This includes the cost of ingredients, supplies, and beverages used to prepare your menu items.
- Rent or mortgage: If you do not own the building your restaurant is located in, you will need to factor in rent payments. If you own the building, you will need to account for mortgage payments.
- Utilities: You will need to pay for electricity, gas, water, and other utilities to keep your restaurant running.
- Marketing and advertising: This includes any costs associated with promoting your restaurant, such as advertising fees, website development, and social media marketing.
- Cleaning and maintenance: You will need to budget for cleaning supplies, equipment maintenance, and repairs to keep your restaurant clean and in good working order.
- Licenses and permits: You will need to obtain various licenses and permits to operate your restaurant, which may incur fees.
- Waste disposal: This includes the cost of trash removal and recycling services for your restaurant.
- Training and development: You may need to budget for training programs and workshops to improve the skills of your staff.
- Music and entertainment: If you plan to have live music or other forms of entertainment at your restaurant, you will need to budget for any associated fees.
- Credit card processing fees: You will need to pay fees for processing credit and debit card payments from your customers.
This list will need to be tailored to the specificities of your Bangladeshi restaurant, but should offer a good starting point for your budget.
What investments are needed to start or grow a Bangladeshi restaurant?
Once you have an idea of how much sales you could achieve and what it will cost to run your Bangladeshi restaurant, it is time to look into the equipment required to launch or expand the activity.
For a Bangladeshi restaurant, capital expenditures and initial working capital items could include:
- Kitchen Equipment: This includes items such as stoves, ovens, grills, and refrigerators. These are essential for cooking and storing food in a Bangladeshi restaurant.
- Furniture and Decor: This includes tables, chairs, and other furnishings for the dining area, as well as decor items that reflect the culture and ambiance of Bangladesh.
- POS System: A point of sale system is necessary for tracking sales, managing inventory, and processing payments. This is an essential investment for any restaurant, including a Bangladeshi one.
- Utensils and Tableware: These items include plates, bowls, glasses, and utensils for serving and eating food. As a Bangladeshi restaurant, you may also need special utensils and tableware for traditional dishes.
- Building Renovations: If you are opening a new restaurant or moving into a new space, you may need to make renovations to accommodate your specific needs. This could include installing a commercial kitchen or adding a seating area.
Again, this list will need to be adjusted according to the specificities of your Bangladeshi restaurant.
Need a convincing business plan?
The Business Plan Shop makes it easy to create a financial forecast to assess the potential profitability of your projects, and write a business plan that’ll wow investors.
The financing plan of your Bangladeshi restaurant
The next step in the creation of your financial forecast for your Bangladeshi restaurant is to think about how you might finance your business.
You will have to assess how much capital will come from shareholders (equity) and how much can be secured through banks.
Bank loans will have to be modelled so that you can separate the interest expenses from the repayments of principal, and include all this data in your forecast.
Issuing share capital and obtaining a bank loan are two of the most common ways that entrepreneurs finance their businesses.
What tables compose the financial plan for a Bangladeshi restaurant?
Now let's have a look at the main output tables of your Bangladeshi restaurant's financial forecast.
The projected profit & loss statement
The projected profit & loss shows how profitable your Bangladeshi restaurant is likely to be in the years to come.
For your Bangladeshi restaurant to be financially viable, your projected P&L should ideally show:
- Sales growing above inflation (the higher the better)
- Profit margins which are stable or expanding (the higher the better)
- A net profit at the end of each financial year (the higher the better)
This is for established Bangladeshi restaurants, there is some leniency for startups which will have numbers that will look a bit different than existing businesses.
The projected balance sheet
Your Bangladeshi restaurant's projected balance sheet provides a snapshot of your business’s financial position at year-end.
It is composed of three types of elements: assets, liabilities and equity:
- Assets: represent what the business possesses including cash, equipment, and accounts receivable (money owed by clients).
- Liabilities: represent funds advanced to the business by lenders and other creditors. They include accounts payable (money owed to suppliers), taxes payable and loans from banks and financial institutions.
- Equity: is the combination of what has been invested by the business owners and the cumulative profits and losses generated by the business to date (which are called retained earnings). Equity is a proxy for the value of the owner's stake in the business.
The cash flow forecast
Your Bangladeshi restaurant's cash flow forecast shows how much cash your business is expected to consume or generate in the years to come.
It is best practice to organise the cash flow forecast by nature to better explain where cash is used or generated by the Bangladeshi restaurant:
- Operating cash flow: shows how much cash is generated by the operating activities
- Investing cash flow: shows how much will be invested in capital expenditure to maintain or expand the business
- Financing cash flow: shows if the business is raising new capital or repaying financiers (debt repayment, dividends)
Keeping an eye on (and regularly updating) your Bangladeshi restaurant's cash flow forecast is key to ensuring that your business has sufficient liquidity to operate normally and to detect financing requirements as early as possible.
If you are trying to raise capital, you will normally be asked to provide a monthly cash flow forecast in your Bangladeshi restaurant's financial plan - so that banks or investors can assess seasonal variation and ensure your business is appropriately capitalised.
Need a convincing business plan?
The Business Plan Shop makes it easy to create a financial forecast to assess the potential profitability of your projects, and write a business plan that’ll wow investors.
Which tool should you use to create your Bangladeshi restaurant's financial projections?
Building a Bangladeshi restaurant financial forecast is not difficult provided that you use the right tool for the job. Let’s see what options are available below.
Using online financial forecasting software to build your Bangladeshi restaurant's projections
The modern and easiest way is to use an online financial forecasting tool such as the one we offer at The Business Plan Shop.
There are several advantages to using specialised software:
- You can easily create your financial forecast by letting the software take care of the financial calculations for you without errors
- You have access to complete financial forecast templates
- You get a complete financial forecast ready to be sent to your bank or investors
- You can easily track your actual financial performance against your financial forecast, and recalibrate your forecast as the year goes by
- You can create scenarios to stress test your forecast's main assumptions
- You can easily update your forecast as time goes by to maintain visibility on future cash flows
- You have a friendly support team on standby to assist you when you are stuck
- It’s cost-efficient and much cheaper than using an accountant or consultant (see below)
If you are interested in this type of solution, you can try our projection software for free by signing up here.
Calling in a financial consultant or chartered accountant
Outsourcing the creation of your Bangladeshi restaurant financial forecast is another possible solution.
This will cost more than using software as you can expect as your price will have to cover the accountant’s time, software cost, and profit margin.
Price can vary greatly based on the complexity of your business. For a small business, from experience, a simple three-year financial forecast (including a balance sheet, income statement, and cash flow statement) will start at around £700 or $1,000.
Bear in mind that this is for forecasts produced at a single point in time, updating or tracking your forecast against actuals will cost extra.
If you decide to outsource your forecasting:
- Make sure the professional has direct experience in your industry and is able to challenge your assumptions constructively.
- Steer away from consultants using sectorial ratios to build their client’s financial forecasts (these projections are worthless for a small business).
Why not use a spreadsheet such as Excel or Google Sheets to build your Bangladeshi restaurant's financial forecast?
You and your financial partners need numbers you can trust. Unless you have studied finance or accounting, creating a trustworthy and error-free Bangladeshi restaurant financial forecast on a spreadsheet is likely to prove challenging.
Financial modelling is very technical by nature and requires a solid grasp of accounting principles to be done without errors. This means that using spreadsheet software like Excel or Google Sheets to create accurate financial forecasts is out of reach for most business owners.
Creating forecasts in Excel is also inefficient nowadays:
- Software has advanced to the point where forecasting can be done much faster and more accurately than manually on a spreadsheet.
- With artificial intelligence, the software is capable of detecting mistakes and helping decision-making.
Spreadsheets are versatile tools but they are not tailor-made for reporting. Importing your Bangladeshi restaurant's accounting data in Excel to track actual vs. forecast is incredibly manual and tedious (and so is keeping forecasts up to date). It is much faster to use dedicated financial planning tools like The Business Plan Shop which are built specially for this.
Need a convincing business plan?
The Business Plan Shop makes it easy to create a financial forecast to assess the potential profitability of your projects, and write a business plan that’ll wow investors.
Use our financial projection templates for inspiration
The Business Plan Shop has dozens of financial forecasting templates available.
Our examples contain both the financial forecast, and a written business plan which presents, in detail, the company, the team, the strategy, and the medium-term objectives.
Whether you are just starting out or already have your own Bangladeshi restaurant, looking at our template is always a good way to get ideas on how to model financial items and what to write when creating a business plan to secure funding.
Takeaways
- Having a financial forecast enables you to visualise the expected growth, profitability, and cash generation for your business over the next three to five years.
- Tracking actuals vs. forecast and keeping your financial projections up-to-date is the only way to get a view on what your Bangladeshi restaurant future cash flows may look like.
- Using financial forecasting software is the mordern and easy way to create and maintain your forecasts.
This is the end of our guide on how to build the financial forecast for a Bangladeshi restaurant, we hope you found it useful. Don't hesitate to contact us if you want to share your feedback or have any questions.
Need a convincing business plan?
The Business Plan Shop makes it easy to create a financial forecast to assess the potential profitability of your projects, and write a business plan that’ll wow investors.
Also on The Business Plan Shop
- Example of financial forecast
- How to create a sales forecast for a business?
- Sample financial forecast for business idea
Know someone who owns or is thinking of starting a Bangladeshi restaurant? Share our forecasting guide with them!
Founder & CEO at The Business Plan Shop Ltd
