How to create a financial forecast for a glucose syrup processing firm?
Developing and maintaining an up-to-date financial forecast for your glucose syrup processing firm 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 glucose syrup processing firm 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 glucose syrup processing firm?
Creating and maintaining an up-to-date financial forecast is the only way to steer the development of your glucose syrup processing firm and ensure that it can be financially viable in the years to come.
A financial plan for a glucose syrup processing firm 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 glucose syrup processing firm 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 glucose syrup processing firm'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 glucose syrup processing firm 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 glucose syrup processing firm, 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 glucose syrup processing firm 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 glucose syrup processing firm, 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 glucose syrup processing firm's financial forecast.
The sales forecast for a glucose syrup processing firm
From experience, it is usually best to start creating your glucose syrup processing firm financial forecast by your sales forecast.
To create an accurate sales forecast for your glucose syrup processing firm, you will have to rely on the data collected in your market research, or if you're running an existing glucose syrup processing firm, 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:
- The demand for corn, the main ingredient in glucose syrup, may affect the average price of your product. If corn prices rise due to poor harvests or high demand, you may have to increase your prices to maintain profitability. On the other hand, if there is an oversupply of corn, you may be able to negotiate lower prices and offer more competitive prices to your customers.
- The availability of alternative sweeteners, such as high-fructose corn syrup, may also impact the average price of your glucose syrup. If other sweeteners become more popular or widely available, you may need to adjust your prices to remain competitive in the market.
- Changes in regulations and taxes related to the production and sale of glucose syrup may affect your business's average price. For example, if new taxes are imposed on sweeteners or stricter regulations are put in place for production, your costs may increase and you may need to raise your prices accordingly.
- The global economy and international trade agreements can also have an impact on the average price of your product. If there are changes in trade policies or tariffs that affect the import and export of corn or other ingredients used in glucose syrup, your production costs may change and impact your pricing strategy.
- The demand for healthier or natural sweeteners may also impact the number of monthly transactions for your glucose syrup. If consumers shift towards more natural or organic sweeteners, you may see a decrease in sales. On the other hand, if there is a trend towards more indulgent or "guilty pleasure" foods, you may see an increase in demand for your product.
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 glucose syrup processing firm
Once you know what level of sales you can expect, you can start budgeting the expenses required to operate your glucose syrup processing firm 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 glucose syrup processing firm will include some of the following items:
- Staff Costs: This includes salaries, wages, and benefits for all employees working in the glucose syrup processing firm. This also includes costs for recruiting, training, and employee development.
- Accountancy Fees: As a glucose syrup processing firm, you will need to hire an accountant to manage your financial records, prepare tax returns, and provide financial advice. These services come at a cost and should be included in your operating expenses forecast.
- Insurance Costs: Running a glucose syrup processing firm comes with a certain level of risk. It's important to have insurance coverage for your business, including property insurance, liability insurance, and worker's compensation insurance.
- Software Licences: To streamline your operations and maintain accurate records, you may need to invest in software licenses for accounting, inventory management, and other business processes. These costs should be factored into your operating expenses forecast.
- Banking Fees: As a business, you will incur fees for services such as check processing, wire transfers, and merchant account fees for accepting credit card payments. These fees should be included in your operating expenses forecast.
- Raw Materials: As a glucose syrup processing firm, you will need to purchase raw materials such as corn, wheat, or rice to produce your product. These costs should be estimated and included in your operating expenses.
- Packaging Materials: You will also need to budget for packaging materials such as bottles, labels, and caps to package your glucose syrup. These costs should be included in your operating expenses.
- Utilities: Running a processing facility requires electricity, water, and other utilities. These costs should be estimated and included in your operating expenses forecast.
- Marketing and Advertising: To attract customers and promote your product, you will need to budget for marketing and advertising expenses such as print ads, online ads, and promotional materials.
- Transportation Costs: You will also need to factor in transportation costs for shipping raw materials and finished products to and from your facility.
- Rent/Lease: If you do not own the property where your processing facility is located, you will need to include rent or lease payments in your operating expenses forecast.
- Maintenance and Repairs: As with any machinery, your processing equipment will require regular maintenance and occasional repairs. These costs should be included in your operating expenses forecast.
- Taxes and Licenses: You will need to budget for business taxes and any necessary licenses or permits required to operate your glucose syrup processing firm.
- Consulting Services: As your business grows, you may need to hire consultants for specialized services such as legal advice, marketing strategy, or product development. These costs should be included in your operating expenses forecast.
- Office Supplies: Running a business requires basic office supplies such as paper, ink, and pens. These costs should be estimated and included in your operating expenses forecast.
This list will need to be tailored to the specificities of your glucose syrup processing firm, but should offer a good starting point for your budget.
What investments are needed to start or grow a glucose syrup processing firm?
Your glucose syrup processing firm 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 glucose syrup processing firm, these could include:
- Machinery and Equipment: This includes the cost of purchasing and installing specialized machinery and equipment such as mixers, centrifuges, and filtration systems for glucose syrup processing.
- Building and Infrastructure: This includes the cost of constructing or renovating a facility to house the processing plant, as well as the installation of necessary utilities like plumbing and electrical systems.
- Transportation and Storage: This includes the cost of purchasing vehicles for transporting raw materials and finished products, as well as the construction of storage facilities to house the glucose syrup before it is shipped to customers.
- Packaging and Labeling: This includes the cost of purchasing packaging materials and labeling equipment to package and label the glucose syrup for retail or wholesale distribution.
- Quality Control and Testing: This includes the cost of purchasing equipment and hiring personnel to ensure the quality and safety of the glucose syrup, such as lab testing equipment and quality control software.
Again, this list will need to be adjusted according to the size and ambitions of your glucose syrup processing firm.
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 glucose syrup processing firm
The next step in the creation of your financial forecast for your glucose syrup processing firm 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 glucose syrup processing firm?
Now let's have a look at the main output tables of your glucose syrup processing firm'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 glucose syrup processing firm'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 glucose syrup processing firm will look different than for a startup.
The projected balance sheet
The projected balance sheet gives an overview of your glucose syrup processing firm'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 glucose syrup processing firm. 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 glucose syrup processing firm 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 glucose syrup processing firm'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 glucose syrup processing firm 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 glucose syrup processing firm'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 glucose syrup processing firm's financial projections?
Building a glucose syrup processing firm financial forecast is not difficult provided that you use the right tool for the job. Let’s see what options are available below.
Using online financial forecasting software to build your glucose syrup processing firm'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 glucose syrup processing firm 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 glucose syrup processing firm's financial forecast?
Creating an accurate and error-free glucose syrup processing firm financial forecast on Excel (or any spreadsheet) is very technical and requires both a strong grasp of accounting principles and solid skills in financial modelling.
Most entrepreneurs lack the expertise required to create an accurate financial forecast using spreadsheet software like Excel or Google Sheets. As a result, it is unlikely anyone will trust your numbers.
The second reason is that it is inefficient. Building forecasts on spreadsheets was the only option in the 1990s and early 2000s, nowadays technology has advanced and software can do it much faster and much more accurately.
This is why professional forecasters all use software. With the rise of AI, software is also becoming smarter at helping us detect mistakes in our forecasts and helping us analyse the numbers to make better decisions.
Finally, like everything with spreadsheets, tracking actuals vs. forecasts and updating your forecast as the year progresses is manual, tedious, error-prone, and time-consuming. Whereas financial forecasting 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 forecast templates for inspiration
The Business Plan Shop has dozens of financial forecast examples available.
Our templates contain both a financial forecast and a written business plan which presents, in detail, the company, the team, the strategy, and the medium-term objectives.
Our templates are a great source of inspiration, whether you just want to see what a complete business plan looks like, or are looking for concrete examples of how you should model financial elements in your own forecast.
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 glucose syrup processing firm 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 glucose syrup processing firm, 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 revenues for a business?
- Financial forecast for a business idea
Know someone who owns or is thinking of starting a glucose syrup processing firm? Share our forecasting guide with them!
Founder & CEO at The Business Plan Shop Ltd
