How to create a financial forecast for a deer farm?
Creating a financial forecast for your deer farm, 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 deer farm 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 deer farm?
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 deer farm becomes handy.
Creating a deer farm 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 deer farm.
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 deer farm 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 deer farm'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 deer farm financial forecast?
A deer farm'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 deer farm, 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 deer farm 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 deer farm 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 deer farm's financial forecast.
The sales forecast for a deer farm
From experience, it usually makes sense to start your deer farm's financial projection with the revenues forecast.
The inputs used to forecast your sales will include the historical trading data of your deer farm (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 deer farm'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:
- Deer Population: The number of deer on your farm can have a direct impact on your average price and number of monthly transactions. A larger population means more deer to sell, potentially driving down the average price due to supply exceeding demand. On the other hand, a smaller population can lead to higher prices as demand may be greater than supply.
- Weather Conditions: Extreme weather conditions, such as drought or severe winter storms, can affect the health and availability of deer on your farm. This can result in a decrease in the number of monthly transactions and potentially drive up the average price due to limited supply.
- Market Trends: The demand for deer meat and products can fluctuate over time based on consumer preferences and trends. Keeping up with market research and understanding the current trends can help you anticipate changes in demand and adjust your sales forecast accordingly.
- Breeding Success: The success of your breeding program can greatly impact your sales forecast. A higher success rate can lead to a larger supply of deer, potentially driving down prices, while a lower success rate can result in limited supply and higher prices.
- Quality of Product: The quality of your deer meat and products can greatly affect your average price and number of monthly transactions. Customers are willing to pay more for high-quality, well-cared for deer, so investing in the health and well-being of your herd can lead to higher profits.
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 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 deer farm
The next step is to estimate the expenses needed to run your deer farm 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 deer farm's operating expenses should include the following items at a minimum:
- Staff costs: This includes salaries, benefits, and training for your deer farm staff, including farmhands, veterinarians, and office staff.
- Feed and forage: Deer require a specific diet and forage to stay healthy. This expense covers the cost of purchasing and storing hay, grains, and other feed for your deer.
- Veterinary expenses: Regular check-ups, vaccinations, and any necessary medical treatments for your deer will be included in this expense category.
- Facility maintenance: Keeping your deer farm facilities in good condition is crucial for the well-being of your herd. This expense covers the cost of repairs, cleaning, and general upkeep of your barns, fences, and other structures.
- Breeding costs: If you plan on breeding your deer, this expense will cover the cost of artificial insemination, pregnancy testing, and any other breeding-related expenses.
- Electricity and water: Your deer farm will need electricity and water for various purposes, such as lighting, heating, and providing water for your deer.
- Marketing and advertising: To attract customers and promote your deer farm, you may need to invest in marketing and advertising efforts, such as creating a website, attending trade shows, or placing ads in local publications.
- Insurance costs: It's important to have insurance coverage for your deer farm to protect against potential risks, such as accidents, natural disasters, and liability claims.
- Accountancy fees: As a business owner, you will need to keep track of your finances and file taxes. Hiring an accountant or bookkeeper can help with these tasks.
- Software licenses: You may need to purchase software licenses for programs such as accounting software, customer relationship management (CRM) software, or farm management software.
- Banking fees: This includes any fees associated with maintaining a checking account, credit card processing fees, and loan interest payments.
- Equipment and supplies: Your deer farm will require various equipment and supplies, such as feeders, water troughs, and medical supplies.
- Transportation costs: This expense covers the cost of transporting your deer to and from your farm, as well as any necessary transportation for supplies or equipment.
- Permits and licenses: Depending on your location, you may need to obtain permits and licenses to operate your deer farm. This expense covers the cost of obtaining and renewing these documents.
- Training and education: As a deer farm owner, it's important to stay updated on best practices and industry trends. This expense covers the cost of attending workshops, conferences, and other educational events.
This list is, of course, not exhaustive, and you'll have to adapt it according to your precise business model and size. A small deer farm might not have the same level of expenditure as a larger one, for example.
What investments are needed to start or grow a deer farm?
Creating and expanding a deer farm also requires investments which you need to factor into your financial forecast.
Capital expenditures and initial working capital items for a deer farm could include elements such as:
- Land Purchase: If you are starting a deer farm, you will need to purchase land to house your deer. This is a major capital expenditure that will likely require a significant amount of money.
- Fencing: In order to keep your deer enclosed and safe from predators, you will need to invest in good quality fencing. This can include materials such as posts, wire, and gates.
- Shelter and Infrastructure: Deer require shelter from extreme weather conditions, so you may need to build a barn or other structures to provide them with protection. You may also need to invest in water and feed troughs, as well as other infrastructure such as handling facilities.
- Transportation: If you plan on buying and selling deer, you will need to have a reliable mode of transportation. This could include a truck and trailer or other equipment to transport your animals to market or to other farms.
- Breeding Stock: If you are starting a deer farm, you will need to purchase breeding stock to get your herd started. This can be a significant capital expenditure, as quality breeding stock can be expensive.
Again, this list is not exhaustive and will need to be adjusted according to the circumstances of your deer farm.
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 deer farm
The next step in the creation of your financial forecast for your deer farm 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 deer farm?
Now let's have a look at the main output tables of your deer farm's financial forecast.
The profit & loss forecast
The forecasted profit & loss statement will enable you to visualise your deer farm's expected growth and profitability over the next three to five years.
A financially viable P&L statement for a deer farm 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 deer farm'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 deer farm. 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 cash flow forecast
Your deer farm'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 deer farm:
- 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 deer farm'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 deer farm'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 deer farm's financial forecast?
Creating your deer farm'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 deer farm'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 deer farm 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 deer farm's financial forecast?
You and your financial partners need numbers you can trust. Unless you have studied finance or accounting, creating a trustworthy and error-free deer farm financial forecast on a spreadsheet is likely to prove challenging.
Financial modelling is very technical by nature and requires a solid grasp of accounting principles to be done without errors. This means that using spreadsheet software like Excel or Google Sheets to create accurate financial forecasts is out of reach for most business owners.
Creating forecasts in Excel is also inefficient nowadays:
- Software has advanced to the point where forecasting can be done much faster and more accurately than manually on a spreadsheet.
- With artificial intelligence, the software is capable of detecting mistakes and helping decision-making.
Spreadsheets are versatile tools but they are not tailor-made for reporting. Importing your deer farm's accounting data in Excel to track actual vs. forecast is incredibly manual and tedious (and so is keeping forecasts up to date). It is much faster to use dedicated financial planning tools like The Business Plan Shop which are built specially 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 deer farm, 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 deer farm
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 deer farm.
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 deer farm. 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 template for a business idea
Know someone who runs or wants to start a deer farm? Share our financial projection guide with them!
Founder & CEO at The Business Plan Shop Ltd
