How to create a financial forecast for a camping car and caravan store?
Developing and maintaining an up-to-date financial forecast for your camping car and caravan store 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 camping car and caravan store 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 camping car and caravan store?
The financial projections for your camping car and caravan store 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 camping car and caravan store'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 camping car and caravan store financial forecast?
A camping car and caravan store'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 camping car and caravan store.
If you are creating (or updating) the forecast of an existing camping car and caravan store, 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 camping car and caravan store 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 camping car and caravan store 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 camping car and caravan store's financial forecast.
The sales forecast for a camping car and caravan store
From experience, it is usually best to start creating your camping car and caravan store financial forecast by your sales forecast.
To create an accurate sales forecast for your camping car and caravan store, you will have to rely on the data collected in your market research, or if you're running an existing camping car and caravan store, 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:
- Seasonal demand: As a camping car and caravan store, your sales are likely to be affected by seasonal demand. During the spring and summer months, when camping and road trips are popular activities, you can expect to see an increase in the number of monthly transactions. On the other hand, during the colder months, sales may slow down as fewer people are looking to purchase camping vehicles.
- Economic conditions: The state of the economy can also have an impact on your sales forecast. During a recession or economic downturn, people may be less likely to make large purchases such as camping cars and caravans. On the other hand, during a strong economy, people may have more disposable income and be more willing to invest in recreational vehicles.
- Competition: Your average price and number of monthly transactions may also be affected by competition in the market. If there are other camping car and caravan stores in your area offering similar products at lower prices, you may need to adjust your prices to remain competitive and attract customers.
- Trends and technology: The camping car and caravan industry is constantly evolving, with new trends and technologies emerging. For example, the rise of eco-tourism and sustainable travel may lead to an increase in demand for environmentally friendly camping vehicles. Keeping up with these trends and offering the latest technology in your products may attract more customers and potentially increase your average price.
- Customer demographics: Understanding your target market and their demographics can also impact your sales forecast. For instance, if you cater to a younger demographic, you may see an increase in sales as more millennials and Gen Zers are interested in camping and road trips. On the other hand, if your target market is primarily retirees, your sales may be more stable but may not see significant growth.
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 camping car and caravan store
The next step is to estimate the expenses needed to run your camping car and caravan store 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 camping car and caravan store's operating expenses should include the following items at a minimum:
- Staff Costs: This includes salaries, wages, benefits, and training expenses for your employees.
- Accountancy Fees: You will need to hire an accountant to help you with your bookkeeping, taxes, and financial planning.
- Insurance Costs: You will need to purchase insurance for your store, vehicles, and inventory to protect against potential risks and liabilities.
- Software Licences: You may need to purchase software licenses for accounting, inventory management, and point-of-sale systems.
- Banking Fees: You will incur fees for bank accounts, credit card processing, and other financial services.
- Rent: If you do not own the building where your store is located, you will need to pay rent to your landlord.
- Utilities: You will need to pay for electricity, water, and other utilities to keep your store and vehicles running.
- Marketing and Advertising: You will need to invest in marketing and advertising to promote your store and attract customers.
- Inventory: You will need to purchase and maintain inventory of camping cars, caravans, and other products to sell in your store.
- Vehicle Maintenance: You will need to regularly service and maintain your camping cars and caravans to ensure they are safe and functional for your customers.
- Office Supplies: You will need to purchase supplies such as paper, ink, and stationery for your store and administrative tasks.
- Travel Expenses: You may need to travel for business purposes, such as attending trade shows or visiting suppliers.
- Repairs and Maintenance: You may encounter unexpected repairs and maintenance costs for your store, vehicles, or equipment.
- Professional Memberships: You may choose to join industry associations or organizations that provide networking and educational opportunities.
- Taxes: You will need to pay various taxes, such as income tax, sales tax, and property tax, depending on your location and business structure.
This list is, of course, not exhaustive, and you'll have to adapt it according to your precise business model and size. A small camping car and caravan store might not have the same level of expenditure as a larger one, for example.
What investments are needed to start or grow a camping car and caravan store?
Creating and expanding a camping car and caravan store also requires investments which you need to factor into your financial forecast.
Capital expenditures and initial working capital items for a camping car and caravan store could include elements such as:
- Camping Cars: The cost of purchasing or leasing a fleet of camping cars to offer for rent or sale in your store. This could also include any necessary modifications or upgrades to the vehicles.
- Caravans: The cost of purchasing or leasing a variety of caravans to offer for rent or sale in your store. This could include different sizes and models to cater to a range of customers.
- Store Renovations: The cost of renovating or remodeling your store to create a welcoming and functional space for customers to browse and purchase camping cars and caravans.
- Equipment and Tools: The cost of purchasing or leasing necessary equipment and tools for your store, such as lifts, jacks, and diagnostic tools to maintain and repair camping cars and caravans.
- Inventory: The cost of purchasing or leasing a variety of camping and caravan accessories, such as tents, awnings, and kitchen supplies, to offer for sale in your store.
Again, this list is not exhaustive and will need to be adjusted according to the circumstances of your camping car and caravan store.
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 camping car and caravan store
The next step in the creation of your financial forecast for your camping car and caravan store 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 camping car and caravan store?
Now let's have a look at the main output tables of your camping car and caravan store's financial forecast.
The profit & loss forecast
The forecasted profit & loss statement will enable you to visualise your camping car and caravan store's expected growth and profitability over the next three to five years.
A financially viable P&L statement for a camping car and caravan store 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 camping car and caravan store'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 camping car and caravan store'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 camping car and caravan store:
- 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 camping car and caravan store'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 camping car and caravan store'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 camping car and caravan store's financial forecast?
Creating your camping car and caravan store's financial forecast may sound fairly daunting, but the good news is that there are several ways to go about it.
Using online financial forecasting software to build your camping car and caravan store'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.
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 camping car and caravan store 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 camping car and caravan store's financial forecast?
Creating an accurate and error-free camping car and caravan store 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 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 camping car and caravan store, 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 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 camping car and caravan store.
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 camping car and caravan store. 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 sales forecast for a business?
- Financial forecast template for a business idea
Know someone who runs or wants to start a camping car and caravan store? Share our financial projection guide with them!
Founder & CEO at The Business Plan Shop Ltd
