How to create a financial forecast for a barley farm?

If you are serious about keeping visibility on your future cash flows, then you need to build and maintain a financial forecast for your barley farm.
Putting together a barley farm financial forecast may sound complex, but don’t worry, with the right tool, it’s easier than it looks, and The Business Plan Shop is here to guide you.
In this practical guide, we'll cover everything you need to know about building financial projections for your barley farm.
We will start by looking at why they are key, what information is needed, what a forecast looks like once completed, and what solutions you can use to create yours.
Let's dive in!
Why create and maintain a financial forecast for a barley farm?
Creating and maintaining an up-to-date financial forecast is the only way to steer the development of your barley farm and ensure that it can be financially viable in the years to come.
A financial plan for a barley farm enables you to look at your business in detail - from income to operating costs and investments - to evaluate its expected profitability and future cash flows.
This gives you the visibility needed to plan future investments and expansion with confidence.
And, when your trading environment gets tougher, having an up to date barley farm forecast enables you to detect potential upcoming financing shortfalls in advance, enabling you to make adjustments or secure financing before you run out of cash.
It’s also important to remember that your barley farm's financial forecast will be essential when looking for financing. You can be 100% certain that banks and investors will ask to see your numbers, so make sure they’re set out accurately and attractively.
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 needed to build a barley farm financial forecast?
The quality of your inputs is key when it comes to financial modelling: no matter how good the model is, if your inputs are off, so will the forecast.
If you are building a financial plan to start a barley farm, you will need to have done your market research and have a clear picture of your sales and marketing strategies so that you can project revenues with confidence.
You will also need to have a clear idea of what resources will be required to operate the barley farm on a daily basis, and to have done your research with regard to the equipment needed to launch your venture (see further down this guide).
If you are creating a financial forecast of an existing barley farm, things are usually simpler as you will be able to use your historical accounting data as a budgeting base, and complement that with your team’s view on what lies ahead for the years to come.
Let's now zoom in on what will go in your barley farm's financial forecast.
The sales forecast for a barley farm
The sales forecast, also called topline projection, is normally where you will start when building your barley farm 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 barley farms), and consider the elements below:
- Weather conditions: The average price and number of monthly transactions of your barley farm may be affected by the weather conditions in your area. Droughts or floods may lead to a decrease in crop yield, resulting in higher prices for your barley and fewer transactions.
- Demand for barley-based products: The demand for products such as beer, whiskey, and animal feed, which use barley as a key ingredient, can greatly impact the average price and number of monthly transactions for your farm. Keep an eye on market trends and adjust your sales forecast accordingly.
- Competition: The presence of other barley farms in your area can affect the average price and number of monthly transactions for your farm. If there are a lot of competitors, you may need to adjust your prices to stay competitive and attract more customers.
- Government policies and regulations: Changes in government policies and regulations related to agriculture, such as subsidies or tariffs, can have a direct impact on the average price and number of monthly transactions for your farm. Stay informed and adapt your sales forecast accordingly.
- International trade: The global market for barley can also affect the average price and number of monthly transactions for your farm. Changes in demand from other countries or trade agreements can lead to fluctuations in prices and transactions for your barley.
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 barley farm
The next step is to estimate the costs you’ll have to incur to operate your barley farm.
These will vary based on where your business is located, and its overall size (level of sales, personnel, etc.).
But your barley farm's operating expenses should normally include the following items:
- Seeds and Fertilizers: As a barley farmer, you need to purchase seeds and fertilizers to grow your crop. This includes the cost of buying high-quality barley seeds and fertilizers to ensure a healthy and productive harvest.
- Labor Costs: Your farm will require a team of skilled workers to help with planting, harvesting, and other farming tasks. This includes wages, benefits, and any other labor-related expenses.
- Fuel and Energy: Farming requires the use of heavy machinery, such as tractors and irrigation systems, which run on fuel and energy. You will need to budget for the cost of purchasing these resources to keep your farm running smoothly.
- Water Usage: Barley requires a significant amount of water to grow, and as a result, your farm will have high water usage costs. This can include the cost of pumping, irrigation, and water storage.
- Pest and Weed Control: To protect your barley crop from pests and weeds, you will need to invest in pest control and weed management products and services. This includes the cost of herbicides, pesticides, and hiring a professional pest control team.
- Transportation: Once your barley is harvested, you will need to transport it to market or storage facilities. This includes the cost of hiring trucks or other vehicles and paying for fuel and maintenance.
- Insurance: Farming comes with inherent risks, and it is essential to have insurance to protect your investment. This can include crop insurance, liability insurance, and workers' compensation.
- Equipment Maintenance: To ensure your farming equipment is running efficiently, you will need to budget for regular maintenance and repairs. This includes the cost of parts, labor, and any other equipment-related expenses.
- Accounting and Bookkeeping: Keeping track of your farm's finances is crucial for making informed decisions. This includes the cost of hiring an accountant or bookkeeper to help you manage your financial records and taxes.
- Software Licenses: As a modern farmer, you may use various software programs to help manage your farm, such as crop forecasting and inventory tracking. This includes the cost of purchasing and renewing software licenses.
- Banking Fees: Your farm will have various banking needs, such as depositing checks and making wire transfers. This includes the cost of bank fees and charges for using financial services.
- Marketing and Advertising: To sell your barley, you may need to invest in marketing and advertising efforts. This includes the cost of creating promotional materials, attending trade shows, and running ads.
- Legal Fees: In some cases, you may need to seek legal advice or representation for your farm, such as when dealing with contracts or disputes. This includes the cost of hiring a lawyer or paying for legal services.
- Rent or Land Payments: If you do not own the land where your farm is located, you will need to budget for rent or land payments. This includes the cost of leasing or renting land for your barley farm.
- Training and Education: As a barley farmer, it is essential to stay updated on the latest farming techniques and technologies. This includes the cost of attending workshops, conferences, and other training programs to improve your skills and knowledge.
This list is not exhaustive by any means, and will need to be tailored to your barley farm's specific circumstances.
What investments are needed to start or grow a barley farm?
Creating and expanding a barley farm also requires investments which you need to factor into your financial forecast.
Capital expenditures and initial working capital items for a barley farm could include elements such as:
- Land Purchase: As a barley farmer, you may need to purchase additional land to expand your farm and increase your crop yield. This can be a significant capital expenditure, but it can also lead to long-term profitability.
- Machinery and Equipment: To effectively and efficiently grow and harvest barley, you will need to invest in various machinery and equipment such as tractors, plows, seed drills, and combine harvesters. These are essential fixed assets that will contribute to your farm's success.
- Irrigation System: Barley requires adequate water to grow, and investing in a reliable irrigation system can help ensure a consistent water supply for your crops. This can include installing pumps, pipes, and sprinkler systems, which can be a significant capital expenditure.
- Storage Facilities: Once your barley is harvested, you will need proper storage facilities to keep it safe and dry until it is sold. This can include constructing grain silos, barns, or purchasing storage bins, which are fixed assets that are essential for a successful barley farm.
- Fencing and Infrastructure: To protect your barley crops from pests and animals, you may need to invest in fencing and other infrastructure such as gates, roads, and drainage systems. These are important fixed assets that can contribute to the overall efficiency and success of your farm.
Again, this list is not exhaustive and will need to be adjusted according to the circumstances of your barley farm.
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 barley farm
The next step in the creation of your financial forecast for your barley farm 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 barley farm?
Now let's have a look at the main output tables of your barley farm's financial forecast.
The forecasted profit & loss statement
The profit & loss forecast gives you a clear picture of your business’ expected growth over the first three to five years, and whether it’s likely to be profitable or not.

A healthy barley farm's P&L statement should show:
- Sales growing at (minimum) or above (better) inflation
- Stable (minimum) or expanding (better) profit margins
- A healthy level of net profitability
This will of course depend on the stage of your business: numbers for an established barley farm will look different than for a startup.
The projected balance sheet
The projected balance sheet gives an overview of your barley farm's financial structure at the end of the financial year.
It is composed of three categories of items: assets, liabilities and equity:
- Assets: are what the business possesses and uses to produce cash flows. It includes resources such as cash, buildings, equipment, and accounts receivable (money owed by clients).
- Liabilities: are the debts of your barley farm. They include accounts payable (money owed to suppliers), taxes due and bank loans.
- Equity: is the combination of what has been invested by the business owners and the cumulative profits 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 barley farm'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 barley farm:
- 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 barley farm'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 barley farm'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 barley farm's financial projections?
Building a barley farm 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 barley farm's projections
The modern and easiest way is to use professional online financial forecasting software 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 forecasting software for free by signing up here.
Hiring a financial consultant or chartered accountant
Hiring a consultant or chartered accountant is also an efficient way to get a professional barley farm financial projection.
As you can imagine, this solution is much more expensive than using software. From experience, the creation of a simple financial forecast over three years (including a balance sheet, income statement, and cash flow statement) is likely to start around £700 or $1,000 excluding taxes.
The indicative estimate above, is for a small business, and a forecast done as a one-off. Using a financial consultant or accountant to track your actuals vs. forecast and to keep your financial forecast up to date on a monthly or quarterly basis will naturally cost a lot more.
If you choose this solution, make sure your service provider has first-hand experience in your industry, so that they may challenge your assumptions and offer insights (as opposed to just taking your figures at face value to create the forecast’s financial statements).
Why not use a spreadsheet such as Excel or Google Sheets to build your barley farm's financial forecast?
Creating an accurate and error-free barley farm financial forecast on Excel (or any spreadsheet) is very technical and requires both a strong grasp of accounting principles and solid skills in financial modelling.
Most entrepreneurs lack the expertise required to create an accurate financial forecast using spreadsheet software like Excel or Google Sheets. As a result, it is unlikely anyone will trust your numbers.
The second reason is that it is inefficient. Building forecasts on spreadsheets was the only option in the 1990s and early 2000s, nowadays technology has advanced and software can do it much faster and much more accurately.
This is why professional forecasters all use software. With the rise of AI, software is also becoming smarter at helping us detect mistakes in our forecasts and helping us analyse the numbers to make better decisions.
Finally, like everything with spreadsheets, tracking actuals vs. forecasts and updating your forecast as the year progresses is manual, tedious, error-prone, and time-consuming. Whereas financial forecasting software like The Business Plan Shop is built 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 forecast templates for inspiration
The Business Plan Shop has dozens of financial forecast examples available.
Our templates contain both a financial forecast and a written business plan which presents, in detail, the company, the team, the strategy, and the medium-term objectives.
Our templates are a great source of inspiration, whether you just want to see what a complete business plan looks like, or are looking for concrete examples of how you should model financial elements in your own forecast.

Takeaways
- A financial forecast shows expected growth, profitability, and cash generation metrics for your barley farm.
- Tracking actuals vs. forecast and having an up-to-date financial forecast is key to maintaining visibility on your future cash flows.
- Using financial forecasting software is the modern way of creating and maintaining financial projections.
We hope that this guide helped you gain a clearer perspective on the steps needed to create the financial forecast for a barley farm. Don't hesitate to contact us if you 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
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- Example of financial forecast for business idea
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