How to create a financial forecast for a blueberry farm?
Creating a financial forecast for your blueberry farm, and ensuring it stays up to date, is the only way to maintain visibility on future cash flows.
This might sound complex, but with the right guidance and tools, creating an accurate financial forecast for your blueberry farm is not that hard.
In this guide, we'll cover everything from the main goal of a financial projection, the data you need as input, to the tables that compose it, and the tools that can help you build a forecast efficiently.
Without further ado, let us begin!
Why create and maintain a financial forecast for a blueberry farm?
In order to prosper, your business needs to have visibility on what lies ahead and the right financial resources to grow. This is where having a financial forecast for your blueberry farm becomes handy.
Creating a blueberry farm financial forecast forces you to take stock of where your business stands and where you want it to go.
Once you have clarity on the destination, you will need to draw up a plan to get there and assess what it means in terms of future profitability and cash flows for your blueberry farm.
Having this clear plan in place will give you the confidence needed to move forward with your business’s development.
Having an up-to-date financial forecast for a blueberry farm is also useful if your trading environment worsens, as the forecast enables you to adjust to your new market conditions and anticipate any potential cash shortfall.
Finally, your blueberry farm's financial projections will also help you secure financing, as banks and investors alike will want to see accurate projections before agreeing to finance your business.
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 blueberry farm financial forecast?
A blueberry farm'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 blueberry farm, 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 blueberry farm 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 blueberry farm 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 blueberry farm's financial forecast.
The sales forecast for a blueberry farm
From experience, it usually makes sense to start your blueberry farm's financial projection with the revenues forecast.
The inputs used to forecast your sales will include the historical trading data of your blueberry farm (which can be used as a starting point for existing businesses) and the data collected in your market research (which both new ventures and existing businesses need to project their sales forward).
Your blueberry farm's sales forecast can be broken down into two key estimates:
- The average price
- The number of monthly transactions
To assess these variables accurately, you will need to consider the following factors:
- Weather conditions: The average price of blueberries may be affected by the weather conditions in your area. If there is a drought or excessive rain, it may lead to a decrease in the quantity and quality of your harvest, resulting in higher prices for your blueberries.
- Competition: The number of monthly transactions for your blueberry farm may be affected by competition from other local blueberry farms. If there are several blueberry farms in your area, customers may have more options to choose from, leading to a decrease in your sales.
- Market demand: The average price and number of monthly transactions for your blueberry farm may be affected by the current market demand for blueberries. If there is a high demand for blueberries, you may be able to charge a higher price and sell more of your blueberries.
- Crop yields: The average price and number of monthly transactions for your blueberry farm may be affected by the size and quality of your crop yields. If your blueberry bushes produce a large and high-quality harvest, you may be able to charge a higher price and attract more customers.
- Labor costs: The average price of blueberries may be affected by the cost of labor to maintain and harvest your blueberry bushes. If labor costs increase, you may need to raise the price of your blueberries to cover these expenses, which could potentially lower the number of monthly transactions.
Once you have a sales forecast in place, the next step will be to work on your overhead budget. Let’s have a look at that now.
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 blueberry farm
The next step is to estimate the expenses needed to run your blueberry farm on a day-to-day basis.
These will vary based on the level of sales expected, and the location and size of your business.
But your blueberry farm's operating expenses should include the following items at a minimum:
- Staff Costs: This includes salaries, wages, and benefits for all employees working on the blueberry farm, such as farmhands, supervisors, and office staff.
- Accountancy Fees: Hiring an accountant to handle your bookkeeping, taxes, and financial statements can be a valuable expense for a blueberry farm.
- Insurance Costs: It's important to protect your blueberry farm from potential risks such as crop damage, equipment breakdown, and liability issues by investing in insurance coverage.
- Software Licenses: As a modern blueberry farm, you may need to invest in software for tasks such as record-keeping, inventory management, and marketing.
- Banking Fees: This includes charges for bank accounts, credit card processing, and other financial services that you may need for your blueberry farm.
- Seeds and Plants: The cost of purchasing blueberry seeds, seedlings, or mature plants for your farm is a significant expense that will vary depending on the size of your farm and the variety of blueberries you choose.
- Fertilizers and Pesticides: Blueberry plants require specific nutrients and protection from pests, so you'll need to budget for fertilizers and pesticides.
- Irrigation System: Maintaining a consistent water supply for your blueberry plants is crucial, and you may need to invest in an irrigation system to ensure proper hydration.
- Equipment and Machinery: Running a blueberry farm requires various equipment and machinery, such as tractors, harvesters, and storage facilities, which will need to be purchased or leased.
- Repairs and Maintenance: As with any equipment, your farming tools and machinery will require regular maintenance and occasional repairs, which should be factored into your budget.
- Fuel and Energy: Operating a blueberry farm can be energy-intensive, especially during peak seasons, so you'll need to budget for fuel and energy costs, including electricity and gas.
- Packaging and Shipping: Once your blueberries are harvested, they'll need to be packaged and shipped to your customers, so this expense should be factored into your budget.
- Marketing and Advertising: To attract customers and promote your blueberries, you'll need to invest in marketing and advertising, whether through traditional methods or online platforms.
- Rent or Mortgage: If you don't own the land where your blueberry farm is located, you'll need to budget for rent or mortgage payments for the property.
- Taxes: As a business owner, you'll need to pay various taxes, including property tax, income tax, and possibly sales tax, which should be included in your operating expenses forecast.
This list is, of course, not exhaustive, and you'll have to adapt it according to your precise business model and size. A small blueberry farm might not have the same level of expenditure as a larger one, for example.
What investments are needed to start or grow a blueberry farm?
Once you have an idea of how much sales you could achieve and what it will cost to run your blueberry farm, it is time to look into the equipment required to launch or expand the activity.
For a blueberry farm, capital expenditures and initial working capital items could include:
- Land and Property: This includes purchasing or leasing land for your blueberry farm, as well as any necessary property improvements such as fencing, irrigation systems, and drainage systems.
- Equipment and Machinery: You will need to invest in equipment and machinery for planting, harvesting, and processing blueberries. This may include tractors, mowers, sprayers, packing equipment, and refrigeration units.
- Infrastructure: Building or renovating structures on your farm such as storage sheds, packing houses, and employee housing can also be considered capital expenditures.
- Vehicles: If you plan on transporting your blueberries to market or delivering them to customers, you may need to purchase or lease vehicles such as trucks or vans.
- Planting Expenses: This includes the cost of purchasing blueberry plants, as well as any necessary supplies for planting such as fertilizer, mulch, and soil amendments.
Again, this list will need to be adjusted according to the specificities of your blueberry 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 blueberry farm
The next step in the creation of your financial forecast for your blueberry 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 blueberry farm?
Now let's have a look at the main output tables of your blueberry 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 blueberry 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 blueberry farm will look different than for a startup.
The projected balance sheet
Your blueberry farm'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 cash flow projection
The cash flow forecast of your blueberry farm will show how much cash the business is expected to generate or consume over the next three to five years.
There are multiple ways of presenting a cash flow forecast but from experience, it is better to organise it by nature in order to clearly show these elements:
- Operating cash flow: how much cash is generated by the blueberry farm's operations
- Investing cash flow: what is the business investing to expand or maintain its equipment
- Financing cash flow: is the business raising additional funds or repaying financiers (debt repayment, dividends)
Your cash flow forecast is the most important element of your overall financial projection and that’s where you should focus your attention to ensure that your blueberry farm is adequately funded.
Note: if you are preparing a financial forecast in order to try to secure funding, you will need to include both a yearly and monthly cash flow forecast in your blueberry farm's financial plan.
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 blueberry farm's financial projections?
Building a blueberry 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 blueberry 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.
Calling in a financial consultant or chartered accountant
Outsourcing the creation of your blueberry farm 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 blueberry farm's financial forecast?
Creating an accurate and error-free blueberry 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 projection templates for inspiration
The Business Plan Shop has dozens of financial forecast templates available.
Our examples contain a complete business plan with a financial forecast and a written presentation of the company, the team, the strategy, and the medium-term objectives.
Whether you are just starting out or already have your own blueberry farm, looking at our financial forecast template is a good way to:
- Understand what a complete business plan should look like
- Understand how you should model financial items for your blueberry farm
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 blueberry farm 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 blueberry farm, 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 project revenues for a business?
- Sample financial forecast for business idea
Know someone who owns or is thinking of starting a blueberry farm? Share our forecasting guide with them!
Founder & CEO at The Business Plan Shop Ltd
