How to create a financial forecast for a boiler and pipe maker?

Developing and maintaining an up-to-date financial forecast for your boiler and pipe manufacturing business 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 boiler and pipe manufacturing business 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 boiler and pipe manufacturing business?
The financial projections for your boiler and pipe manufacturing business 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 boiler and pipe manufacturing business'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 boiler and pipe manufacturing business financial forecast?
A boiler and pipe manufacturing business'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 boiler and pipe manufacturing business, 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 boiler and pipe manufacturing business 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 boiler and pipe manufacturing business 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 boiler and pipe manufacturing business's financial forecast.
The sales forecast for a boiler and pipe manufacturing business
The sales forecast, also called topline projection, is normally where you will start when building your boiler and pipe manufacturing business 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 boiler and pipe makers), and consider the elements below:
- Seasonal demand: The demand for boilers and pipes tends to be higher during the colder months as people are more likely to need heating systems. This can affect your average price as well as the number of monthly transactions.
- Economic conditions: Changes in the economy, such as a recession or a boom, can affect the construction industry and consequently, the demand for boilers and pipes. This can impact both your average price and the number of monthly transactions.
- Competition: The presence of competitors in the market can affect your average price as you may need to lower your prices to remain competitive. It can also affect the number of monthly transactions as customers may choose to purchase from your competitors instead.
- Technological advancements: Advancements in technology may lead to the development of more efficient and cost-effective boilers and pipes. This can affect your average price as customers may be willing to pay more for these advanced products. It can also impact the number of monthly transactions as customers may be more likely to purchase these products.
- Regulations: Changes in regulations related to construction or energy efficiency can affect the demand for boilers and pipes. This can impact both your average price and the number of monthly transactions as customers may need to upgrade or replace their existing systems to comply with the new regulations.
After the sales forecast comes the operating expenses budget, which we will now look into in more detail.
Need a convincing business plan?
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The operating expenses for a boiler and pipe manufacturing business
Once you know what level of sales you can expect, you can start budgeting the expenses required to operate your boiler and pipe manufacturing business 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 boiler and pipe manufacturing business will include some of the following items:
- Staff costs: This includes salaries, wages, benefits, and payroll taxes for your employees. You will need skilled workers to manufacture and install boilers and pipes.
- Raw materials: The cost of purchasing and transporting materials such as steel, copper, and other metals to be used in the manufacturing process.
- Equipment maintenance: Regular maintenance and repairs for machinery and equipment used in the manufacturing process.
- Utilities: Electricity, water, and gas costs for running your manufacturing facility and office space.
- Rent or mortgage: If you own or rent a manufacturing facility, this expense will include monthly payments for the building.
- Insurance: Insurance costs to protect your business from liability, property damage, and other risks specific to a manufacturing business.
- Transportation: The cost of shipping and delivering materials and finished products to clients.
- Advertising and marketing: Promoting your business and products through various channels, such as online ads, trade shows, and print materials.
- Accountancy fees: Hiring an accountant or accounting firm to manage your financial records, file taxes, and provide financial advice.
- Software licenses: The cost of using software for tasks such as bookkeeping, inventory management, and project management.
- Banking fees: Fees associated with maintaining business bank accounts, processing credit card payments, and other banking services.
- Legal fees: The cost of hiring a lawyer or law firm for legal advice and services, such as drafting contracts and handling lawsuits.
- Office supplies: Purchasing supplies such as paper, printer ink, and stationery for your office and employees.
- Training and development: Investing in training programs and workshops for your employees to improve their skills and knowledge.
- Travel expenses: If your business involves traveling for meetings or conferences, this expense will cover flights, hotels, and other related costs.
This list will need to be tailored to the specificities of your boiler and pipe manufacturing business, but should offer a good starting point for your budget.
What investments are needed to start or grow a boiler and pipe manufacturing business?
Your boiler and pipe manufacturing business financial forecast will also need to include the capital expenditures (aka investments in plain English) and initial working capital items required for the creation or development of your business.
For a boiler and pipe manufacturing business, these could include:
- Boiler manufacturing equipment: This includes the cost of purchasing or leasing machinery and equipment used in the production of boilers, such as welding machines, CNC machines, and assembly lines.
- Pipe manufacturing equipment: Similar to boiler manufacturing equipment, this includes the cost of machinery and equipment used in the production of pipes, such as pipe benders, extrusion machines, and cutting tools.
- Factory building: If you do not already have a suitable factory or manufacturing space, you may need to purchase or lease a building to house your operations. This can include expenses such as rent, utilities, and renovation costs.
- Raw materials and inventory: As a boiler and pipe manufacturer, you will need to purchase raw materials such as steel, copper, and other metals to produce your products. Additionally, you may need to maintain inventory of these materials to ensure a steady supply for production.
- Transportation and delivery vehicles: Depending on the size of your business, you may need to invest in vehicles for transporting your products to customers. This can include trucks, vans, or other vehicles for delivery and distribution.
Again, this list will need to be adjusted according to the size and ambitions of your boiler and pipe manufacturing 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.

The financing plan of your boiler and pipe manufacturing business
The next step in the creation of your financial forecast for your boiler and pipe manufacturing business 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 boiler and pipe manufacturing business?
Now let's have a look at the main output tables of your boiler and pipe manufacturing business's financial forecast.
The profit & loss forecast
The forecasted profit & loss statement will enable you to visualise your boiler and pipe manufacturing business's expected growth and profitability over the next three to five years.

A financially viable P&L statement for a boiler and pipe manufacturing business 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 boiler and pipe manufacturing business'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 projection
The cash flow forecast of your boiler and pipe manufacturing business 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 boiler and pipe manufacturing business'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 boiler and pipe manufacturing business 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 boiler and pipe manufacturing business'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 boiler and pipe manufacturing business's financial forecast?
Creating your boiler and pipe manufacturing business'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 boiler and pipe manufacturing business'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.
Hiring a financial consultant or chartered accountant
Hiring a consultant or chartered accountant is also an efficient way to get a professional boiler and pipe manufacturing business 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 boiler and pipe manufacturing business's financial forecast?
Creating an accurate and error-free boiler and pipe manufacturing business 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
- 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 boiler and pipe manufacturing business 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 boiler and pipe manufacturing business, 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?
- Financial forecast template for a business idea
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