How to create a financial forecast for a creperie?
Creating a financial forecast for your creperie, 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 creperie 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 creperie?
Creating and maintaining an up-to-date financial forecast is the only way to steer the development of your creperie and ensure that it can be financially viable in the years to come.
A financial plan for a creperie 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 creperie 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 creperie'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 solid financial forecast?
The Business Plan Shop does the maths for you. Simply enter your revenues, costs and investments. Click save and our online tool builds a three-way forecast for you instantly.
What information is needed to build a creperie 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 creperie, 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 creperie 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 creperie, 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 creperie's financial forecast.
The sales forecast for a creperie
From experience, it usually makes sense to start your creperie's financial projection with the revenues forecast.
The inputs used to forecast your sales will include the historical trading data of your creperie (which can be used as a starting point for existing businesses) and the data collected in your market research (which both new ventures and existing businesses need to project their sales forward).
Your creperie's sales forecast can be broken down into two key estimates:
- The average price
- The number of monthly transactions
To assess these variables accurately, you will need to consider the following factors:
- The popularity of your creperie's location among tourists and locals
- The seasonality of ingredients used in your crepe recipes
- The introduction of new, unique crepe flavors to your menu
- The availability and cost of fresh, high-quality ingredients from your suppliers
- The local competition and their pricing strategies for crepes
Once you have a sales forecast in place, the next step will be to work on your overhead budget. Let’s have a look at that now.
Need inspiration for your business plan?
The Business Plan Shop has dozens of business plan templates that you can use to get a clear idea of what a complete business plan looks like.
The operating expenses for a creperie
The next step is to estimate the expenses needed to run your creperie 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 creperie's operating expenses should include the following items at a minimum:
- Staff Costs: This includes the salaries and wages of your employees, as well as any benefits and payroll taxes you may be responsible for.
- Accountancy Fees: You will need to hire an accountant to help you with bookkeeping, taxes, and financial planning for your creperie.
- Insurance Costs: Running a creperie comes with certain risks, and you will need to purchase insurance to protect your business and assets.
- Software Licences: In today's digital world, you will likely need to purchase software to help with tasks such as inventory management, scheduling, and point-of-sale systems.
- Banking Fees: You will need to open a business bank account and may incur fees for services such as wire transfers, overdraft protection, and monthly account maintenance.
- Raw Materials: As a creperie, you will need to purchase ingredients such as flour, eggs, and toppings to make your delicious crepes.
- Utilities: This includes expenses for electricity, gas, water, and any other services necessary to keep your creperie running.
- Rent or Mortgage: If you do not own the building your creperie is located in, you will need to pay rent on the space.
- Marketing and Advertising: You will need to promote your creperie to attract customers, which may include expenses for social media ads, flyers, and other promotional materials.
- Repairs and Maintenance: As with any business, your creperie will require regular maintenance and occasional repairs to keep everything in working order.
- Cleaning Supplies: Keeping your creperie clean and sanitary is crucial, and you will need to purchase cleaning supplies on a regular basis.
- Professional Development: It's important to stay up-to-date on industry trends and techniques, so you may need to invest in training or attend conferences and workshops.
- Licenses and Permits: Depending on your location, you may be required to obtain certain licenses and permits to operate your creperie legally.
- Credit Card Processing Fees: If you accept credit card payments, you will need to pay fees to the credit card processing company for each transaction.
- Uniforms: To maintain a professional and cohesive appearance, you may choose to provide your employees with uniforms, which will incur expenses.
This list is, of course, not exhaustive, and you'll have to adapt it according to your precise business model and size. A small creperie might not have the same level of expenditure as a larger one, for example.
What investments are needed to start or grow a creperie?
Your creperie 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 creperie, these could include:
- Crepe making equipment (such as griddles, batter spreaders, and spatulas)
- Refrigeration units (for storing ingredients such as fruit, cheese, and spreads)
- Furniture (tables, chairs, and stools for seating customers)
- Point of sale system (cash register, card reader, and software for tracking sales)
- Kitchen equipment (blenders, mixers, and food processors for preparing ingredients)
Again, this list will need to be adjusted according to the size and ambitions of your creperie.
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 creperie
The next step in the creation of your financial forecast for your creperie 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 creperie?
Now let's have a look at the main output tables of your creperie's financial forecast.
The projected profit & loss statement
The projected profit & loss shows how profitable your creperie is likely to be in the years to come.
For your creperie to be financially viable, your projected P&L should ideally show:
- Sales growing above inflation (the higher the better)
- Profit margins which are stable or expanding (the higher the better)
- A net profit at the end of each financial year (the higher the better)
This is for established creperies, there is some leniency for startups which will have numbers that will look a bit different than existing businesses.
The projected balance sheet
Your creperie's forecasted balance sheet enables you to assess your financial structure and working capital requirements.
It is composed of three types of elements: assets, liabilities and equity:
- Assets: represent what the business owns and uses to produce cash flows. It includes resources such as cash, equipment, and accounts receivable (money owed by clients).
- Liabilities: represent funds advanced to the business by lenders and other creditors. It includes items such as accounts payable (money owed to suppliers), taxes due and loans.
- 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 creperie'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 creperie:
- 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 creperie'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 creperie's financial plan - so that banks or investors can assess seasonal variation and ensure your business is appropriately capitalised.
Need a solid financial forecast?
The Business Plan Shop does the maths for you. Simply enter your revenues, costs and investments. Click save and our online tool builds a three-way forecast for you instantly.
Which tool should you use to create your creperie's financial forecast?
Creating your creperie'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 creperie's projections
The modern and easiest way is to use professional online financial forecasting 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 creperie 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 creperie's financial forecast?
Creating an accurate and error-free creperie 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 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 creperie, 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 creperie
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 creperie 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 creperie, we hope you found it useful. Don't hesitate to contact us if you want to share your feedback or have any questions.
Need inspiration for your business plan?
The Business Plan Shop has dozens of business plan templates that you can use to get a clear idea of what a complete business plan looks like.
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