How to create a financial forecast for a bowling lane?
Creating a financial forecast for your bowling lane, 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 bowling lane 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 bowling lane?
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 bowling lane becomes handy.
Creating a bowling lane 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 bowling lane.
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 bowling lane 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 bowling lane'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 bowling lane financial forecast?
A bowling lane'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 bowling lane.
If you are creating (or updating) the forecast of an existing bowling lane, 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 bowling lane 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 bowling lane 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 bowling lane's financial forecast.
The sales forecast for a bowling lane
The sales forecast, also called topline projection, is normally where you will start when building your bowling lane 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 bowling lanes), and consider the elements below:
- Location: The location of your bowling lane can greatly affect the average price and number of monthly transactions. If your lane is located in a high traffic area with easy access and ample parking, you may be able to charge a higher price and attract more customers. On the other hand, if your lane is in a remote or less desirable location, you may need to lower your prices to attract customers and increase the number of transactions.
- Competition: The presence of other bowling lanes in your area can also impact your average price and number of monthly transactions. If you are the only bowling lane in the area, you may be able to charge higher prices and attract more customers. However, if there are multiple bowling lanes competing for the same customers, you may need to adjust your prices and promotions to remain competitive.
- Seasonal Factors: The time of year can also affect the average price and number of monthly transactions for your bowling lane. For example, during the summer months when people are more likely to be outdoors and on vacation, you may see a decrease in transactions and may need to lower your prices to attract customers. Conversely, during the winter months when people are looking for indoor activities, you may see an increase in transactions and can potentially charge higher prices.
- Special Events: Hosting special events, such as birthday parties or corporate team building events, can greatly impact your average price and number of monthly transactions. These events can bring in a large group of customers at a higher price point, increasing your average price and number of transactions for that month. It is important to market and promote these events to attract more customers and maximize profits.
- Facility Upgrades: Investing in upgrades for your bowling lane, such as new equipment or a renovated space, can also affect the average price and number of monthly transactions. Customers may be willing to pay a higher price for a more modern and enjoyable experience. Additionally, a renovated space may attract more customers and increase the number of transactions. However, it is important to carefully consider the cost of upgrades and how they will impact your bottom line.
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 bowling lane
Once you know what level of sales you can expect, you can start budgeting the expenses required to operate your bowling lane 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 bowling lane will include some of the following items:
- Staff Costs: Salaries, wages, and benefits for employees such as bowling lane attendants, maintenance staff, and managers.
- Accountancy Fees: Fees paid to an accountant for financial and tax services.
- Insurance Costs: Premiums for insurance coverage to protect against liabilities and risks specific to a bowling lane, such as property damage and personal injury.
- Software Licences: Payment for software licenses for programs used to manage reservations, track bowling scores, and other operational tasks.
- Banking Fees: Charges for services related to managing and processing financial transactions, such as credit card processing fees and bank account maintenance fees.
- Rent/Lease: Monthly payments for the rental or lease of the bowling lane facility.
- Utilities: Expenses for electricity, water, and other utilities used to operate the bowling lane.
- Supplies: Costs for bowling balls, pins, shoes, and other necessary supplies for gameplay.
- Marketing and Advertising: Expenses for promoting the bowling lane through various channels, such as social media, print ads, and sponsored events.
- Repairs and Maintenance: Costs for repairing and maintaining bowling equipment, lanes, and other facilities.
- Cleaning Services: Fees for professional cleaning services to maintain a clean and sanitary environment for customers.
- Taxes and Permits: Payments for taxes and necessary permits to operate a bowling lane business.
- Professional Services: Fees for consulting services, legal services, and other professional services related to the operation of a bowling lane.
- Training and Development: Costs for training and developing employees to improve their skills and performance.
- Entertainment Expenses: Costs for hosting events, providing entertainment, and other activities to attract customers to the bowling lane.
This list will need to be tailored to the specificities of your bowling lane, but should offer a good starting point for your budget.
What investments are needed to start or grow a bowling lane?
Creating and expanding a bowling lane also requires investments which you need to factor into your financial forecast.
Capital expenditures and initial working capital items for a bowling lane could include elements such as:
- Bowling Lanes: This is the most obvious and essential capital expenditure for a bowling lane. You will need to purchase and install multiple bowling lanes in order to operate your business. This can include the lane surface, gutters, pinsetters, and scoring equipment.
- Seating and Furniture: In addition to the bowling lanes, you will also need to provide seating and furniture for your customers. This can include chairs, tables, and benches for the bowling area, as well as seating for a bar or restaurant area if you choose to have one.
- Shoes and Equipment: Your customers will need to rent bowling shoes and may also need to rent equipment such as bowling balls and bags. It is important to include the cost of purchasing and maintaining these items in your expenditure forecast.
- Lighting and Sound System: A bowling lane requires proper lighting for players to see the pins and score accurately. You may also want to invest in a sound system to provide music and announcements for your customers. These items will need to be purchased and installed for your business.
- Lane Maintenance and Repairs: Bowling lanes require regular maintenance and repairs in order to stay in good condition. This can include resurfacing the lanes, repairing pinsetters, and replacing worn-out equipment. It is important to budget for these ongoing expenses in your forecast.
Again, this list is not exhaustive and will need to be adjusted according to the circumstances of your bowling lane.
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 bowling lane
The next step in the creation of your financial forecast for your bowling lane 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 bowling lane?
Now let's have a look at the main output tables of your bowling lane's financial forecast.
The profit & loss forecast
The forecasted profit & loss statement will enable you to visualise your bowling lane's expected growth and profitability over the next three to five years.
A financially viable P&L statement for a bowling lane 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 bowling lane'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 forecast
Your bowling lane'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 bowling lane:
- 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 bowling lane'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 bowling lane'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 bowling lane's financial projections?
Building a bowling lane 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 bowling lane'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.
Hiring a financial consultant or chartered accountant
Hiring a consultant or chartered accountant is also an efficient way to get a professional bowling lane 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 bowling lane's financial forecast?
Creating an accurate and error-free bowling lane 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 bowling lane, 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 bowling lane
Takeaways
- A financial projection shows expected growth, profitability, and cash generation for your business over the next three to five years.
- Tracking actuals vs. forecast and keeping your financial forecast up-to-date is the only way to maintain visibility on future cash flows.
- Using financial forecasting software makes it easy to create and maintain up-to-date projections for your bowling lane.
You have reached the end of our guide. We hope you now have a better understanding of how to create a financial forecast for a bowling lane. Don't hesitate to contact our team if you have any questions or want to share your experience building forecasts!
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 projections
- How to create a turnover forecast for a business?
- Financial forecast for a business idea
Know someone who runs or wants to start a bowling lane? Share our financial projection guide with them!
Founder & CEO at The Business Plan Shop Ltd
