How to create a financial forecast for a freshwater fishing company?
Creating a financial forecast for your freshwater fishing company, 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 freshwater fishing company 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 freshwater fishing company?
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 freshwater fishing company becomes handy.
Creating a freshwater fishing company 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 freshwater fishing company.
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 freshwater fishing company 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 freshwater fishing company'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 freshwater fishing company financial forecast?
A freshwater fishing company'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 freshwater fishing company, 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 freshwater fishing company 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 freshwater fishing company 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 freshwater fishing company's financial forecast.
The sales forecast for a freshwater fishing company
From experience, it usually makes sense to start your freshwater fishing company's financial projection with the revenues forecast.
The inputs used to forecast your sales will include the historical trading data of your freshwater fishing company (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 freshwater fishing company'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: As a freshwater fishing company, you are highly dependent on favorable weather conditions for your business to thrive. Extreme weather events, such as heavy rainfall or severe storms, can impact the number of customers willing to go fishing and the average price they are willing to pay for your services.
- Fish population: The abundance of fish in your fishing location can greatly affect the number of transactions and the average price of your fishing trips. A decline in fish population due to overfishing or environmental factors can lead to a decrease in demand for your services and a potential decrease in prices.
- Regulations and restrictions: Government regulations and restrictions on fishing can also have a significant impact on your business. Changes in fishing laws or restrictions on certain types of fishing can affect the number of customers you can serve and the average price you can charge for your fishing trips.
- Competition: The presence of other freshwater fishing companies in your area can affect your business's average price and number of transactions. If there is high competition, you may have to lower your prices to attract customers, and vice versa if there is low competition.
- Economic conditions: Economic factors, such as a recession or inflation, can also impact your business's sales forecast. In a recession, customers may be less likely to spend money on recreational activities like fishing, while inflation can lead to an increase in prices for supplies and equipment, which may impact your pricing strategy.
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.
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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 freshwater fishing company
The next step is to estimate the costs you’ll have to incur to operate your freshwater fishing company.
These will vary based on where your business is located, and its overall size (level of sales, personnel, etc.).
But your freshwater fishing company's operating expenses should normally include the following items:
- Staff Costs: This includes salaries, wages, and benefits for all employees, such as fishing guides, boat captains, and administrative staff.
- Accountancy Fees: You will need to hire an accountant to handle your financial records, tax returns, and other financial matters.
- Insurance Costs: As a freshwater fishing company, you will need to have insurance to protect your business and employees from any risks or accidents that may occur. This may include liability insurance, workers' compensation insurance, and property insurance.
- Software Licences: You will need to purchase software licences for any programs or applications that you use to manage your business, such as accounting software, booking systems, and marketing tools.
- Banking Fees: You will have to pay fees for maintaining your business bank account, processing credit card payments, and other banking services.
- Marketing and Advertising Expenses: To attract customers and promote your business, you will need to spend money on marketing and advertising efforts, such as creating a website, printing brochures and business cards, and running social media campaigns.
- Boat and Equipment Maintenance: Your fishing boats and equipment will require regular maintenance and repairs to keep them in good working condition. This includes costs for fuel, oil, replacement parts, and labor.
- Permits and Licences: You will need to obtain permits and licences to operate your freshwater fishing company legally. This may include fishing licences, business permits, and other necessary permits.
- Rent or Lease Payments: If you do not own the property where your business operates, you will have to pay rent or lease payments for your office space, storage facilities, and boat dock.
- Utilities: You will have to pay for utilities, such as electricity, water, and internet, to keep your business running smoothly.
- Supplies and Inventory: You will need to purchase fishing supplies, such as bait, tackle, and safety equipment, as well as maintain an inventory of these items.
- Training and Education: To ensure that your employees are knowledgeable and skilled in freshwater fishing, you may need to provide training and education opportunities, such as workshops, seminars, and certifications.
- Office Expenses: This includes costs for office supplies, such as paper, ink, and pens, as well as other office-related expenses, such as postage, printing, and phone bills.
- Travel Expenses: You may need to travel to fishing locations, trade shows, or meetings with clients or suppliers, which will incur expenses for transportation, lodging, and meals.
- Safety and Emergency Equipment: As a freshwater fishing company, you must prioritize the safety of your customers and employees. Therefore, you may need to invest in safety and emergency equipment, such as first aid kits, life jackets, and emergency communication devices.
This list is not exhaustive by any means, and will need to be tailored to your freshwater fishing company's specific circumstances.
What investments are needed to start or grow a freshwater fishing company?
Your freshwater fishing company 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 freshwater fishing company, these could include:
- Fishing boats: As a freshwater fishing company, you will need to invest in boats specifically designed for fishing in freshwater bodies. These boats may include aluminum or fiberglass boats, bass boats, or pontoon boats. These boats will be necessary for your business to operate and generate revenue.
- Fishing equipment: Your expenditure forecast should also include the cost of fishing equipment such as rods, reels, tackle boxes, and lures. These items are essential for any fishing trip and will need to be replenished regularly due to wear and tear. Make sure to factor in the cost of these items in your forecast to ensure your business has the necessary equipment.
- Fishing gear storage: A freshwater fishing company will also need to invest in storage solutions for fishing gear. This may include storage sheds, lockers, or cabinets to keep your equipment safe and organized. These storage solutions will not only protect your gear from damage but also make it easier to access and use, saving you time and effort.
- Fishing licenses and permits: As a fishing company, you will need to obtain the necessary licenses and permits to operate legally. These may include state fishing licenses, commercial fishing permits, and boat registration fees. Make sure to include these costs in your expenditure forecast to avoid any legal issues in the future.
- Fish feed and bait: If you plan on offering guided fishing tours, you may also need to invest in fish feed and bait to attract fish to your location. These items can be expensive, so make sure to include them in your forecast and factor in the cost of replenishing them regularly.
Again, this list will need to be adjusted according to the size and ambitions of your freshwater fishing company.
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 freshwater fishing company
The next step in the creation of your financial forecast for your freshwater fishing company 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 freshwater fishing company?
Now let's have a look at the main output tables of your freshwater fishing company's financial forecast.
The profit & loss forecast
The forecasted profit & loss statement will enable you to visualise your freshwater fishing company's expected growth and profitability over the next three to five years.
A financially viable P&L statement for a freshwater fishing company 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 freshwater fishing company'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 freshwater fishing company. 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 freshwater fishing company'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 freshwater fishing company:
- 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 freshwater fishing company'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 freshwater fishing company'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 freshwater fishing company's financial forecast?
Using the right tool or solution will make the creation of your freshwater fishing company's financial forecast much easier than it sounds. Let’s explore the main options.
Using online financial forecasting software to build your freshwater fishing company'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
Outsourcing the creation of your freshwater fishing company financial forecast is another possible solution.
This will cost more than using software as you can expect as your price will have to cover the accountant’s time, software cost, and profit margin.
Price can vary greatly based on the complexity of your business. For a small business, from experience, a simple three-year financial forecast (including a balance sheet, income statement, and cash flow statement) will start at around £700 or $1,000.
Bear in mind that this is for forecasts produced at a single point in time, updating or tracking your forecast against actuals will cost extra.
If you decide to outsource your forecasting:
- Make sure the professional has direct experience in your industry and is able to challenge your assumptions constructively.
- Steer away from consultants using sectorial ratios to build their client’s financial forecasts (these projections are worthless for a small business).
Why not use a spreadsheet such as Excel or Google Sheets to build your freshwater fishing company's financial forecast?
Creating an accurate and error-free freshwater fishing company 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 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 freshwater fishing company, 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
- 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 freshwater fishing company 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 freshwater fishing company, we hope you found it useful. Don't hesitate to contact us if you want to share your feedback or have any questions.
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 forecast
- How to project sales for a business?
- Example of financial forecast for business idea
Know someone who owns or is thinking of starting a freshwater fishing company? Share our forecasting guide with them!
Founder & CEO at The Business Plan Shop Ltd
