How to create a financial forecast for a football club?
Developing and maintaining an up-to-date financial forecast for your football club 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 football club 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 football club?
Creating and maintaining an up-to-date financial forecast is the only way to steer the development of your football club and ensure that it can be financially viable in the years to come.
A financial plan for a football club 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 football club 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 football club'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 football club 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 football club, 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 football club 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 football club, 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 football club's financial forecast.
The sales forecast for a football club
From experience, it is usually best to start creating your football club financial forecast by your sales forecast.
To create an accurate sales forecast for your football club, you will have to rely on the data collected in your market research, or if you're running an existing football club, 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:
- Team Performance: The performance of your football team is a major driver that can affect the average price of tickets and the number of monthly transactions. If your team is performing well, there is a higher demand for tickets, and you can charge a higher price. On the other hand, if your team is not performing well, there may be a decrease in ticket sales and a need to lower ticket prices to attract fans.
- Star Players: The presence of star players on your team can also impact the average ticket price and number of monthly transactions. If your team has well-known and highly skilled players, there may be an increase in demand for tickets and an opportunity to charge a premium price. However, if these players leave the team, it could result in a decrease in ticket sales and a need to adjust prices accordingly.
- Stadium Capacity: The capacity of your stadium is another important factor to consider in your sales forecast. If your stadium has a large seating capacity, you have the potential to sell more tickets and increase your monthly transactions. However, if your stadium has a smaller capacity, there may be limited ticket availability, and you may need to adjust prices to compensate for this.
- Competition: The level of competition within your league or region can also affect the average price and number of monthly transactions for your football club. If there are several other popular teams in the same area, it may be more challenging to attract fans and sell tickets. In this case, you may need to offer competitive pricing or promotions to entice potential customers.
- Fan Engagement: The level of engagement and loyalty from your fan base can also impact your sales forecast. If you have a strong and dedicated fan base, they are more likely to attend games and support the team, resulting in higher ticket sales and transactions. However, if there is a lack of fan engagement, it may be necessary to invest in marketing and promotional efforts to attract more fans and increase sales.
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 football club
The next step is to estimate the costs you’ll have to incur to operate your football club.
These will vary based on where your business is located, and its overall size (level of sales, personnel, etc.).
But your football club's operating expenses should normally include the following items:
- Staff costs, including salaries, bonuses, and benefits for players, coaches, and other club personnel.
- Accountancy fees for auditing and financial reporting services.
- Insurance costs for player and staff injuries, property damage, and liability coverage.
- Software licenses for management and analysis tools, as well as media and broadcasting technology.
- Banking fees for transaction and account management services.
- Stadium rental fees for home games and events.
- Travel expenses for team travel to away games and tournaments.
- Marketing and advertising costs for promoting the club and its events.
- Equipment and supply costs for training, game day, and facility maintenance.
- League fees and membership dues for participation in professional leagues and associations.
- Player transfer fees and signing bonuses.
- Legal fees for contracts, disputes, and other legal matters.
- Medical and rehabilitation expenses for injured players.
- Food and catering costs for team meals and events.
- Utilities and facility maintenance costs for training facilities and stadiums.
This list is not exhaustive by any means, and will need to be tailored to your football club's specific circumstances.
What investments are needed to start or grow a football club?
Creating and expanding a football club also requires investments which you need to factor into your financial forecast.
Capital expenditures and initial working capital items for a football club could include elements such as:
- Stadium Renovation: As a football club, you will need to regularly maintain and update your stadium to provide a safe and enjoyable experience for your fans. This can include upgrades to seating, lighting, and other facilities.
- Training Facility Upgrades: In order to keep your team at the top of their game, it's important to invest in your training facilities. This can include adding new equipment, upgrading fields, and improving amenities for players and coaches.
- Player Transfers: Bringing in new players to your team can be a significant expense for a football club. This can include transfer fees, signing bonuses, and other related costs.
- Youth Academy Development: In order to groom future talent for your team, it's important to invest in your youth academy. This can include building or upgrading facilities, hiring coaches, and providing resources for young players.
- Team Travel and Accommodation: As a football club, you will need to travel for away games and tournaments. This can include expenses for transportation, lodging, and meals for players and staff.
Again, this list is not exhaustive and will need to be adjusted according to the circumstances of your football club.
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 football club
The next step in the creation of your financial forecast for your football club 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 football club?
Now let's have a look at the main output tables of your football club's financial forecast.
The projected profit & loss statement
The projected profit & loss shows how profitable your football club is likely to be in the years to come.
For your football club 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 football clubs, there is some leniency for startups which will have numbers that will look a bit different than existing businesses.
The projected balance sheet
The projected balance sheet gives an overview of your football club'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 football club. 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 projection
The cash flow forecast of your football club 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 football club'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 football club 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 football club's financial plan.
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 football club's financial forecast?
Creating your football club's financial forecast may sound fairly daunting, but the good news is that there are several ways to go about it.
Using online financial projection software to build your football club'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 football club 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 football club'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 football club 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 football club'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 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 football club, 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 football club.
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 football club. 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 project revenues for a business?
- Financial forecast for a business idea
Know someone who runs or wants to start a football club? Share our financial projection guide with them!
Founder & CEO at The Business Plan Shop Ltd
