How to create a financial forecast for a boat storage company?
If you are serious about keeping visibility on your future cash flows, then you need to build and maintain a financial forecast for your boat storage company.
Putting together a boat storage company 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 boat storage company.
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 boat storage company?
Creating and maintaining an up-to-date financial forecast is the only way to steer the development of your boat storage company and ensure that it can be financially viable in the years to come.
A financial plan for a boat storage company 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 boat storage company 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 boat storage company'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 boat storage company 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 boat storage company, 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 boat storage company 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 boat storage company, 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 boat storage company's financial forecast.
The sales forecast for a boat storage company
The sales forecast, also called topline projection, is normally where you will start when building your boat storage company 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 boat storage companies), and consider the elements below:
- Seasonal Demand: As a boat storage company, your average price and number of monthly transactions may be affected by the seasonal demand for boat storage. During the peak boating season, you can expect higher demand for storage and potentially higher prices, while the off-season may see a decrease in demand and prices.
- Location: The location of your storage facility can also impact your average price and number of monthly transactions. A prime location near popular boating destinations may allow you to charge higher prices and attract more customers, while a remote location may limit your pricing and customer base.
- Competition: The presence of competitors in your area can also impact your business's average price and number of monthly transactions. If there are other boat storage companies nearby, you may need to adjust your prices or offer additional services to stay competitive.
- Boat Size: The size of the boats you can accommodate at your storage facility can also affect your average price and number of monthly transactions. If your facility can only accommodate smaller boats, you may have lower prices and a higher number of monthly transactions compared to a facility that can accommodate larger boats.
- Weather: Inclement weather can also play a role in your business's average price and number of monthly transactions. Harsh weather conditions may limit boating activity and therefore decrease demand for storage, while pleasant weather can lead to increased demand and potentially higher prices.
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 boat storage company
The next step is to estimate the costs you’ll have to incur to operate your boat storage company.
These will vary based on where your business is located, and its overall size (level of sales, personnel, etc.).
But your boat storage company's operating expenses should normally include the following items:
- Staff costs: Salaries and benefits for employees, including dock hands, maintenance workers, and office staff.
- Accountancy fees: Costs for hiring a professional accountant to handle financial and tax matters for your business.
- Insurance costs: Premiums for insurance coverage, including liability insurance, property insurance, and workers' compensation insurance.
- Software licenses: Fees for using software programs, such as boat management software, accounting software, and scheduling software.
- Banking fees: Charges for maintaining business bank accounts, processing transactions, and using banking services.
- Marketing and advertising expenses: Costs for promoting your boat storage company, including website development, online advertising, and print materials.
- Utilities: Electricity, water, and gas expenses for operating the boat storage facility.
- Maintenance and repairs: Costs for maintaining and repairing boat storage units, including dock repairs, building maintenance, and equipment maintenance.
- Supplies and equipment: Expenses for purchasing supplies, such as cleaning products, office supplies, and equipment for the boat storage facility.
- Taxes and permits: Fees for business licenses, permits, and property taxes.
- Legal fees: Costs for hiring a lawyer to handle legal matters related to your business, such as drafting contracts and handling disputes.
- Security expenses: Expenses for security measures, such as surveillance cameras, security guards, and alarm systems.
- Waste disposal: Fees for garbage and recycling services for your boat storage facility.
- Training and development: Costs for employee training, professional development, and safety training.
- Office expenses: Expenses for office-related items, such as printer ink, paper, and postage.
This list is not exhaustive by any means, and will need to be tailored to your boat storage company's specific circumstances.
What investments are needed to start or grow a boat storage company?
Once you have an idea of how much sales you could achieve and what it will cost to run your boat storage company, it is time to look into the equipment required to launch or expand the activity.
For a boat storage company, capital expenditures and initial working capital items could include:
- Boat Lifts: These are essential for your boat storage company as they allow you to safely and efficiently store boats on land. Boat lifts come in various sizes and materials, so it's important to choose ones that are suitable for the size and weight of the boats you plan on storing.
- Dock Construction and Repair: As a boat storage company, you will need to have a well-maintained dock for boats to be loaded and unloaded from. This may require regular repairs and maintenance, as well as occasional construction or expansion to accommodate more boats.
- Security Systems: Protecting your customers' valuable boats should be a top priority. This may include investing in security cameras, alarms, and access control systems to prevent theft and vandalism on your storage premises.
- Office Equipment: While not directly related to the storage of boats, having a well-equipped office is important for running your business smoothly. This may include computers, printers, desks, and other necessary office supplies.
- Fleet of Vehicles: In order to transport boats to and from your storage facility, you will need a fleet of vehicles such as trailers, trucks, and boats to ensure safe and timely delivery. These vehicles will also require regular maintenance and repairs.
Again, this list will need to be adjusted according to the specificities of your boat storage company.
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 boat storage company
The next step in the creation of your financial forecast for your boat storage company 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 boat storage company?
Now let's have a look at the main output tables of your boat storage company's financial forecast.
The profit & loss forecast
The forecasted profit & loss statement will enable you to visualise your boat storage company's expected growth and profitability over the next three to five years.
A financially viable P&L statement for a boat storage company 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 boat storage company'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 projected cash flow statement
A projected cash flow statement for a boat storage company 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 boat storage company'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 boat storage company 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 boat storage company's financial forecast?
Creating your boat storage company's financial forecast may sound fairly daunting, but the good news is that there are several ways to go about it.
Using online financial projection software to build your boat storage company's forecast
The modern and easiest way to build a forecast is to use professional financial projection 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
Enlisting the help of a consultant or accountant is also a good way to obtain a professional boat storage company 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 is 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 boat storage company's financial forecast?
Creating an accurate and error-free boat storage company financial forecast with a spreadsheet is very technical and requires a deep knowledge of accounting and an understanding of financial modelling.
Very few business owners are financially savvy enough to be able to build a forecast themselves on Excel without making mistakes.
Lenders and investors know this, which is why forecasts created on Excel by the business owner are often frowned upon.
Having numbers one can trust is key when it comes to financial forecasting and to that end using software is much safer.
Using financial forecasting software is also faster than using a spreadsheet, and, with the rise of artificial intelligence, software is also becoming smarter at helping us analyse the numbers to make smarter decisions.
Finally, like everything with spreadsheets, tracking actuals vs. forecasts and keeping your projections up to date as the year progresses is manual, tedious, and error-prone. Whereas financial projection 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
- 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 boat storage company 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 boat storage company, 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 boat storage company? Share our forecasting guide with them!
Founder & CEO at The Business Plan Shop Ltd
