How to create a financial forecast for a BBQ shack?
If you are serious about keeping visibility on your future cash flows, then you need to build and maintain a financial forecast for your BBQ shack.
Putting together a BBQ shack 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 BBQ shack.
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 BBQ shack?
The financial projections for your BBQ shack 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 BBQ shack'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 BBQ shack financial forecast?
A BBQ shack's financial forecast needs to be built on the right foundation: your assumptions.
The data required to create your assumptions will depend on whether you are a new or existing BBQ shack.
If you are creating (or updating) the forecast of an existing BBQ shack, then your main inputs will be historical accounting data and operating metrics, and your team’s view on what to expect for the next three to five years.
If you are building financial projections for a new BBQ shack startup, you will need to rely on market research to form your go-to-market strategy and derive your sales forecast.
For a new venture, you will also need an itemised list of resources needed for the BBQ shack to operate, along with a list of equipment required to launch the venture (more on that below).
Now that you understand what is needed, let’s have a look at what elements will make up your BBQ shack's financial forecast.
The sales forecast for a BBQ shack
The sales forecast, also called topline projection, is normally where you will start when building your BBQ shack 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 BBQ shacks), and consider the elements below:
- Seasonal Demand: Your BBQ shack may experience higher demand and sales during the summer months when people are more likely to grill and eat outdoors. This could result in a higher average price per transaction due to increased demand for your products.
- Local Events: If your BBQ shack is located near a popular event venue or hosts its own events, such as live music nights or BBQ competitions, this could attract more customers and increase the average number of monthly transactions.
- Menu Updates: Introducing new and unique BBQ dishes or sides may attract customers who are interested in trying something new. This could potentially lead to higher average prices as customers are willing to pay more for these specialty items.
- Competition: The presence of other BBQ restaurants in the area may affect your average price and number of transactions. If there is high competition, you may need to lower your prices to remain competitive, resulting in a lower average price per transaction. On the other hand, if your BBQ shack is the only one in the area, you may be able to charge higher prices and attract more customers.
- Weather: Extreme weather conditions, such as heavy rain or extreme heat, may impact the number of customers who choose to dine at your BBQ shack. This could result in fluctuations in your average price and number of 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 BBQ shack
The next step is to estimate the cost you’ll have to incur to operate your BBQ shack.
These will vary based on where your business is located, and its overall size (level of sales, personnel, etc.).
But your BBQ shack's operating expenses should normally include the following items:
- Staff Costs: This includes wages, salaries, and benefits for your employees. As a BBQ shack, you will need to hire kitchen staff, servers, and possibly a manager to handle day-to-day operations.
- Food and Beverage Costs: These are the costs of purchasing ingredients and supplies for your menu items. This may include meats, vegetables, condiments, and beverages.
- Rent: This is the cost of leasing the space for your BBQ shack. It may also include utilities such as electricity, water, and gas.
- Marketing and Advertising: You will need to promote your BBQ shack to attract customers. This may include creating flyers, social media advertisements, and sponsoring local events.
- Accountancy Fees: As a business owner, you will need to keep track of your finances and file taxes. Hiring an accountant can help ensure accuracy and save you time.
- Insurance Costs: It is important to have insurance for your BBQ shack to protect against potential risks such as property damage, lawsuits, and employee injuries.
- Software Licenses: To keep track of inventory, sales, and other business operations, you may need to purchase software licenses. This can include point-of-sale systems, accounting software, and scheduling software.
- Banking Fees: You will need a business bank account to manage your finances. This may include fees for transactions, wire transfers, and monthly account maintenance.
- Equipment Maintenance: Your BBQ shack will likely have grills, smokers, and other equipment that will need regular maintenance and repairs to keep them in working condition.
- Cleaning Supplies: Keeping your BBQ shack clean and sanitary is crucial for food safety and customer satisfaction. This may include purchasing cleaning supplies such as disinfectants, detergents, and paper towels.
- Licenses and Permits: In order to operate a food business, you will need to obtain certain licenses and permits from local and state authorities. These may include health permits, food safety permits, and liquor licenses.
- Training and Development: It is important to invest in your employees by providing them with training and development opportunities. This can include courses on food safety, customer service, and management skills.
- Waste Disposal: As a food business, you will generate waste that needs to be disposed of properly. This may include hiring a waste management company or purchasing trash bags and bins.
- Credit Card Processing Fees: If you accept credit or debit card payments, you will need to pay processing fees to the payment processor or payment gateway.
- Music and Entertainment: To create a fun and inviting atmosphere at your BBQ shack, you may want to have live music or other forms of entertainment. This may include paying musicians or purchasing a music streaming service.
This list is not exhaustive by any means, and will need to be tailored to your BBQ shack's specific circumstances.
What investments are needed to start or grow a BBQ shack?
Creating and expanding a BBQ shack also requires investments which you need to factor into your financial forecast.
Capital expenditures and initial working capital items for a BBQ shack could include elements such as:
- BBQ grill: This is the most essential equipment for your BBQ shack. You will need to invest in a high-quality, commercial-grade BBQ grill to prepare your signature dishes. Consider the size and capacity of the grill based on your projected sales and menu offerings.
- Outdoor seating: To create a welcoming and relaxed atmosphere for your customers, you will need to invest in outdoor seating such as tables, chairs, and umbrellas. Make sure to choose durable and weather-resistant furniture that can withstand the elements.
- Kitchen equipment: In addition to the BBQ grill, you will also need to invest in other kitchen equipment such as refrigerators, freezers, prep tables, and cooking utensils. These items will help you store and prepare your ingredients and dishes efficiently.
- Signage and branding: To attract customers and build brand recognition, it is important to invest in signage and branding for your BBQ shack. This can include a logo, menu boards, banners, and other promotional materials.
- POS system: A point-of-sale (POS) system is essential for tracking sales, managing inventory, and processing payments. Invest in a reliable and user-friendly system that can handle your specific business needs.
Again, this list is not exhaustive and will need to be adjusted according to the circumstances of your BBQ shack.
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 BBQ shack
The next step in the creation of your financial forecast for your BBQ shack 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 BBQ shack?
Now let's have a look at the main output tables of your BBQ shack's financial forecast.
The profit & loss forecast
The forecasted profit & loss statement will enable you to visualise your BBQ shack's expected growth and profitability over the next three to five years.
A financially viable P&L statement for a BBQ shack should normally show:
- Sales growing above inflation
- Stable or expanding (ideally) profit margins
- A net profit
This will of course depend on the stage of your business: a new venture might be loss-making until it reaches its breakeven point in year 2 or 3, for example.
The projected balance sheet
Your BBQ shack's forecasted balance sheet enables you to assess your financial structure and working capital requirements.
It is composed of three types of elements: assets, liabilities and equity:
- Assets: represent what the business owns and uses to produce cash flows. It includes resources such as cash, equipment, and accounts receivable (money owed by clients).
- Liabilities: represent funds advanced to the business by lenders and other creditors. It includes items such as accounts payable (money owed to suppliers), taxes due and loans.
- 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 projected cash flow statement
A projected cash flow statement for a BBQ shack is used to show how much cash the business is generating or consuming.
The cash flow forecast is usually organised by nature to show three key metrics:
- The operating cash flow: do the core business activities generate or consume cash?
- The investing cash flow: how much is the business investing in long-term assets (this is usually compared to the level of fixed assets on the balance sheet to assess whether the business is regularly maintaining and renewing its equipment)?
- The financing cash flow: is the business raising new financing or repaying financiers (debt repayment, dividends)?
Cash is king and keeping an eye on future cash flows is imperative for running a successful business. Therefore, you should pay close attention to your BBQ shack's cash flow forecast.
If you are trying to secure financing, note that it is customary to provide both yearly and monthly cash flow forecasts in a financial plan - so that the reader can analyze seasonal variation and ensure the BBQ shack 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 BBQ shack's financial forecast?
Creating your BBQ shack's financial forecast may sound fairly daunting, but the good news is that there are several ways to go about it.
Using online financial forecasting software to build your BBQ shack'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
Enlisting the help of a consultant or accountant is also a good way to obtain a professional BBQ shack financial forecast.
The downside of this solution is its cost. From experience, obtaining a simple financial forecast over three years (including a balance sheet, income statement, and cash flow statement) is likely to cost a minimum of £700 or $1,000.
The indicative cost above, is for a small business, and a forecast done as a one-shot exercise. Using a consultant or accountant to track your actuals vs. forecast and to keep your financial projections up to date on a monthly or quarterly basis will cost a lot more.
If you opt for this solution, make sure your accountant has in-depth knowledge of your industry, so that they may challenge your figures and offer insights (as opposed to just taking your assumptions at face value to create the forecast).
Why not use a spreadsheet such as Excel or Google Sheets to build your BBQ shack's financial forecast?
Creating an accurate and error-free BBQ shack 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 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 BBQ shack, 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
- A financial forecast shows expected growth, profitability, and cash generation metrics for your BBQ shack.
- 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 BBQ shack. 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
- Financial forecast example
- How to project sales for a business?
- Sample financial forecast for business idea
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Founder & CEO at The Business Plan Shop Ltd
