How to create a financial forecast for a box truck company?
Developing and maintaining an up-to-date financial forecast for your box truck company 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 box truck company 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 box truck company?
Creating and maintaining an up-to-date financial forecast is the only way to steer the development of your box truck company and ensure that it can be financially viable in the years to come.
A financial plan for a box truck 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 box truck 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 box truck 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 box truck 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 box truck 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 box truck 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 box truck 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 box truck company's financial forecast.
The sales forecast for a box truck company
From experience, it is usually best to start creating your box truck company financial forecast by your sales forecast.
To create an accurate sales forecast for your box truck company, you will have to rely on the data collected in your market research, or if you're running an existing box truck company, the historical data of the business, to estimate two key variables:
- The average price
- The number of monthly transactions
To get there, you will need to consider the following factors:
- Changes in fuel prices can greatly impact your box truck company's average price and number of monthly transactions. Higher fuel prices can increase your operating costs, resulting in higher prices for your customers and potentially fewer transactions as they look for more affordable options.
- The state of the economy can also have a significant impact on your company's sales forecast. During a recession, businesses may be cutting back on expenses and may not require your services as frequently, leading to a decrease in transactions and potentially lower prices as you compete for a smaller pool of customers.
- Changes in regulations and laws, particularly related to transportation and logistics, can affect your business's average price and number of transactions. For example, new emissions regulations may require you to invest in more expensive vehicles, resulting in higher prices for your services.
- The availability of truck drivers can also impact your company's sales forecast. If there is a shortage of qualified drivers, you may need to increase your prices to attract and retain employees, which could impact your number of transactions as customers may opt for lower-priced competitors.
- Weather conditions can also play a role in your sales forecast. Extreme weather, such as heavy snow or hurricanes, can disrupt transportation and logistics, potentially leading to delays and higher prices for your services as you work to meet demand during challenging conditions.
Once you have an idea of what your future sales will look like, it will be time to work on your overhead budget. Let’s see what this entails.
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 box truck company
Once you know what level of sales you can expect, you can start budgeting the expenses required to operate your box truck company 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 box truck company will include some of the following items:
- Staff Costs: This includes the salaries and wages of your drivers, mechanics, and administrative staff.
- Fuel Expenses: As a box truck company, fuel will be a major operating expense. You will need to budget for the cost of diesel or gasoline to keep your trucks on the road.
- Vehicle Maintenance: Regular maintenance and repairs for your box trucks will be necessary to ensure they are safe and reliable on the road.
- Insurance Costs: You will need to have commercial auto insurance to protect your box trucks and your business in case of accidents or other incidents.
- Vehicle Registration Fees: Each box truck will need to be registered and have a valid license plate, which will incur a fee.
- Toll Fees: If your box trucks will be traveling on toll roads, you will need to budget for the cost of tolls.
- Accounting Fees: It's important to keep accurate financial records for your box truck company, so you may need to hire an accountant or bookkeeper to assist with this.
- Software Licenses: You may need to purchase software for managing your fleet, tracking deliveries, or handling other aspects of your business.
- Banking Fees: You will likely have business bank accounts for managing your finances, and these may come with monthly or transaction fees.
- Advertising Expenses: In order to attract and retain customers, you may need to invest in advertising and marketing efforts.
- Uniforms and Safety Gear: Your drivers and other employees may need uniforms or safety gear while on the job, which will need to be purchased and maintained.
- Office Supplies: Even though your business primarily operates on the road, you may still need to purchase office supplies such as paper, printer ink, and pens for administrative tasks.
- Training and Development: It's important to invest in the ongoing training and development of your employees to keep them up-to-date with industry standards and best practices.
- Rent or Lease Payments: If you do not own a warehouse or garage to store your box trucks, you may need to rent or lease a space for this purpose.
- Utilities: If you do have a physical location for your business, you will need to budget for utility expenses such as electricity and water.
This list will need to be tailored to the specificities of your box truck company, but should offer a good starting point for your budget.
What investments are needed to start or grow a box truck company?
Creating and expanding a box truck company also requires investments which you need to factor into your financial forecast.
Capital expenditures and initial working capital items for a box truck company could include elements such as:
- Box trucks: This is the most obvious capital expenditure for a box truck company. Box trucks are the primary mode of transportation for your business and are essential for delivering goods to your customers.
- Loading equipment: Loading equipment such as ramps, liftgates, and dollies are necessary for loading and unloading items from the box trucks. These items are considered fixed assets and will be used repeatedly in your daily operations.
- Warehouse equipment: Depending on the size of your business, you may need to invest in warehouse equipment such as forklifts, pallet jacks, and shelving units. These items are necessary for organizing and storing goods before they are loaded onto the box trucks.
- GPS tracking systems: In order to efficiently manage your fleet of box trucks, you may want to invest in GPS tracking systems. These systems can help you track the location of your trucks, monitor driver behavior, and optimize delivery routes.
- Vehicle maintenance and repairs: As your box trucks will be used frequently, it is important to budget for regular maintenance and repairs. These expenses can include oil changes, tire replacements, and engine repairs.
Again, this list is not exhaustive and will need to be adjusted according to the circumstances of your box truck 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 box truck company
The next step in the creation of your financial forecast for your box truck 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 box truck company?
Now let's have a look at the main output tables of your box truck company's financial forecast.
The profit & loss forecast
The forecasted profit & loss statement will enable you to visualise your box truck company's expected growth and profitability over the next three to five years.
A financially viable P&L statement for a box truck 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
The projected balance sheet gives an overview of your box truck company's financial structure at the end of the financial year.
It is composed of three categories of items: assets, liabilities and equity:
- Assets: are what the business possesses and uses to produce cash flows. It includes resources such as cash, buildings, equipment, and accounts receivable (money owed by clients).
- Liabilities: are the debts of your box truck company. They include accounts payable (money owed to suppliers), taxes due and bank loans.
- Equity: is the combination of what has been invested by the business owners and the cumulative profits 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 box truck 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 box truck 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 box truck 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 box truck company's financial forecast?
Using the right tool or solution will make the creation of your box truck company's financial forecast much easier than it sounds. Let’s explore the main options.
Using online financial projection software to build your box truck 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 box truck 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 box truck company's financial forecast?
Creating an accurate and error-free box truck 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 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 box truck company, 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 box truck company.
- 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 box truck company. 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 revenues for a business?
- Sample financial forecast for business idea
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Founder & CEO at The Business Plan Shop Ltd
