How to create a financial forecast for a fishing lodge?
Developing and maintaining an up-to-date financial forecast for your fishing lodge 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 fishing lodge 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 fishing lodge?
Creating and maintaining an up-to-date financial forecast is the only way to steer the development of your fishing lodge and ensure that it can be financially viable in the years to come.
A financial plan for a fishing lodge 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 fishing lodge 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 fishing lodge'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 used as input to build a fishing lodge financial forecast?
A fishing lodge'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 fishing lodge, 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 fishing lodge 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 fishing lodge 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 fishing lodge's financial forecast.
The sales forecast for a fishing lodge
From experience, it usually makes sense to start your fishing lodge's financial projection with the revenues forecast.
The inputs used to forecast your sales will include the historical trading data of your fishing lodge (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 fishing lodge'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:
- Weather conditions: Extreme weather conditions such as storms or heavy rain may affect the number of monthly transactions for your fishing lodge, as it may make it difficult for guests to fish or travel to your location.
- Availability of fish: The abundance or scarcity of fish in the surrounding waters can impact the average price of your fishing packages, as well as the number of monthly transactions as guests may be willing to pay more for a chance to catch a rare or prized fish.
- Tourism seasonality: The peak tourist season in your region can affect the number of monthly transactions for your fishing lodge, as well as the average price, as demand for fishing experiences may be higher during certain times of the year.
- Competitor activity: The presence of other fishing lodges in the area can impact your average price and number of monthly transactions, as competition for customers may drive prices down or attract guests to other options.
- Local regulations: Changes in local fishing regulations or restrictions may affect the number of monthly transactions for your fishing lodge, as well as the average price, as certain fish species may become off-limits or limited in catch size.
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?
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The operating expenses for a fishing lodge
Once you know what level of sales you can expect, you can start budgeting the expenses required to operate your fishing lodge 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 fishing lodge will include some of the following items:
- Staff costs: This includes the salaries, benefits, and any other expenses related to hiring and paying employees such as guides, housekeeping staff, and kitchen staff.
- Accountancy fees: You will need to hire an accountant to handle your lodge's financial records and tax filings.
- Insurance costs: It is important to have insurance coverage for your fishing lodge, including property, liability, and worker's compensation insurance.
- Software licenses: You may need to purchase licenses for software programs such as accounting, booking, and reservation systems.
- Banking fees: This includes fees for maintaining a business bank account, wire transfers, and ATM withdrawals.
- Marketing and advertising: To attract customers, you will need to invest in marketing and advertising efforts such as creating a website, printing brochures, and running social media campaigns.
- Utilities: This includes electricity, gas, water, and internet bills for your lodge.
- Maintenance and repairs: As a fishing lodge owner, you will need to regularly maintain and repair your property, including boats, cabins, and other facilities.
- Supplies: You will need to purchase supplies such as fishing gear, bait, food, cleaning products, and other necessities for your lodge.
- Permits and licenses: Depending on your location, you may need to obtain permits and licenses for your fishing lodge, such as a business license, fishing permits, and alcohol license.
- Professional services: This includes fees for legal services, consulting, and any other professional services you may need for your business.
- Taxes: As a business owner, you will need to pay various taxes, including income tax, property tax, and sales tax.
- Equipment rental: If you do not own all the necessary equipment for your lodge, you may need to rent it, such as boats, kayaks, and other recreational gear.
- Cleaning and laundry services: To ensure a clean and comfortable experience for your guests, you may need to hire a cleaning and laundry service.
- Training and development: To maintain a high level of service, you may need to invest in training and development programs for your staff.
This list will need to be tailored to the specificities of your fishing lodge, but should offer a good starting point for your budget.
What investments are needed to start or grow a fishing lodge?
Creating and expanding a fishing lodge also requires investments which you need to factor into your financial forecast.
Capital expenditures and initial working capital items for a fishing lodge could include elements such as:
- Fishing Boats: As a fishing lodge owner, you will need to invest in boats that are specifically designed for fishing trips. These boats can range from small aluminum boats to larger, more luxurious vessels depending on the type of fishing experience you want to offer to your guests.
- Fishing Gear and Equipment: In addition to boats, you will also need to purchase fishing gear and equipment such as rods, reels, bait, tackle, and other necessary supplies for your guests to use during their fishing trips. This is a crucial expense as the quality of the fishing gear can greatly impact the success and satisfaction of your guests.
- Lodge Buildings and Facilities: Your fishing lodge will need to have suitable accommodations and facilities for your guests to stay in and use during their stay. This can include cabins, lodges, dining areas, bathrooms, and other amenities such as a hot tub or sauna. These buildings and facilities will need to be properly maintained and updated over time.
- Landscaping and Outdoor Amenities: To enhance the overall experience of your fishing lodge, you may want to invest in landscaping and outdoor amenities such as a dock, picnic area, fire pit, or walking trails. These features can add to the aesthetic appeal of your lodge and provide additional recreational activities for your guests.
- Transportation Vehicles: Depending on the location of your fishing lodge, you may need to invest in transportation vehicles such as trucks, ATVs, or snowmobiles to transport guests to and from the lodge, as well as to various fishing spots. These vehicles will need to be properly maintained and replaced as needed to ensure the safety and comfort of your guests.
Again, this list is not exhaustive and will need to be adjusted according to the circumstances of your fishing lodge.
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 fishing lodge
The next step in the creation of your financial forecast for your fishing lodge 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 fishing lodge?
Now let's have a look at the main output tables of your fishing lodge's financial forecast.
The forecasted profit & loss statement
The profit & loss forecast gives you a clear picture of your business’ expected growth over the first three to five years, and whether it’s likely to be profitable or not.
A healthy fishing lodge's P&L statement should show:
- Sales growing at (minimum) or above (better) inflation
- Stable (minimum) or expanding (better) profit margins
- A healthy level of net profitability
This will of course depend on the stage of your business: numbers for an established fishing lodge will look different than for a startup.
The projected balance sheet
Your fishing lodge'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 projection
The cash flow forecast of your fishing lodge will show how much cash the business is expected to generate or consume over the next three to five years.
There are multiple ways of presenting a cash flow forecast but from experience, it is better to organise it by nature in order to clearly show these elements:
- Operating cash flow: how much cash is generated by the fishing lodge's operations
- Investing cash flow: what is the business investing to expand or maintain its equipment
- Financing cash flow: is the business raising additional funds or repaying financiers (debt repayment, dividends)
Your cash flow forecast is the most important element of your overall financial projection and that’s where you should focus your attention to ensure that your fishing lodge is adequately funded.
Note: if you are preparing a financial forecast in order to try to secure funding, you will need to include both a yearly and monthly cash flow forecast in your fishing lodge's financial plan.
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 fishing lodge's financial forecast?
Creating your fishing lodge'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 fishing lodge'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 fishing lodge 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 fishing lodge'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 fishing lodge 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 fishing lodge'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 fishing lodge, 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 fishing lodge
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 fishing lodge 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 fishing lodge, 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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