How to create a financial forecast for a helicopter tour firm?
Creating a financial forecast for your helicopter tour firm, 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 helicopter tour firm 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 helicopter tour firm?
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 helicopter tour firm becomes handy.
Creating a helicopter tour firm 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 helicopter tour firm.
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 helicopter tour firm 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 helicopter tour firm'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 helicopter tour firm financial forecast?
A helicopter tour firm'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 helicopter tour firm, 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 helicopter tour firm 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 helicopter tour firm 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 helicopter tour firm's financial forecast.
The sales forecast for a helicopter tour firm
From experience, it usually makes sense to start your helicopter tour firm's financial projection with the revenues forecast.
The inputs used to forecast your sales will include the historical trading data of your helicopter tour firm (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 helicopter tour firm'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:
- Seasonal Demand: You can expect an increase in demand for helicopter tours during peak tourist seasons, such as summer or holidays. This may result in a higher average price per tour and an increase in the number of monthly transactions.
- Weather Conditions: Adverse weather conditions, such as heavy rain or strong winds, can lead to cancelled or postponed tours. This can impact your average price and the number of monthly transactions, as customers may be less likely to book a tour during unpredictable weather.
- Competitor Pricing: The pricing strategies of your competitors can also affect your business. If your competitors offer lower prices, you may need to adjust your average price to stay competitive. This can also impact the number of monthly transactions, as customers may choose a cheaper option.
- Fuel Costs: The cost of fuel can greatly impact your average price per tour. Fluctuations in fuel prices may require you to adjust your prices accordingly. This can also affect the number of monthly transactions, as customers may be more hesitant to book a tour if the price is too high.
- Special Events: Special events, such as music festivals or sporting events, can attract a large number of tourists to your area. This can increase demand for helicopter tours and potentially allow you to charge a higher average price. However, it may also result in more competition and affect the number of monthly transactions.
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 helicopter tour firm
The next step is to estimate the expenses needed to run your helicopter tour firm 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 helicopter tour firm's operating expenses should include the following items at a minimum:
- Fuel costs: As a helicopter tour firm, you will incur significant expenses for fuel to power your aircraft during tours.
- Staff salaries: You will need to hire pilots, tour guides, and administrative staff to operate your business, and their salaries will be a major operating expense.
- Maintenance and repair costs: Helicopters require regular maintenance and occasional repairs, which can be costly for your business.
- Marketing and advertising: In order to attract customers, you will need to invest in marketing and advertising efforts, such as creating brochures and running online ads.
- Insurance costs: As with any business, insurance is a necessary expense to protect your company and your customers in case of accidents or other incidents.
- Accounting and bookkeeping fees: You will likely need to hire an accountant or bookkeeper to manage your financial records and ensure your business is in compliance with tax laws.
- Software licenses: To operate your business efficiently, you may need to invest in software for tasks such as booking reservations and managing customer data.
- Banking fees: You will need to maintain a business bank account and may incur fees for transactions, wire transfers, and other banking services.
- Office rent and utilities: If you have a physical office for your business, you will need to cover rent and utility expenses.
- Training and certification: Your staff will need to undergo training and obtain necessary certifications to operate helicopters and provide tours, which can be a significant expense.
- Uniforms and equipment: In order to maintain a professional image, your staff may need to wear uniforms and you may need to purchase equipment such as headsets and safety gear.
- Landing fees and permits: Depending on the locations of your tours, you may need to pay landing fees and obtain permits from local authorities.
- Taxes and licenses: As a business, you will need to pay taxes and obtain necessary licenses to operate legally.
- Credit card processing fees: If you accept credit card payments from customers, you will need to pay processing fees for each transaction.
- Customer service: Providing excellent customer service is crucial for maintaining a successful business, and you may need to invest in training and resources to ensure your customers are satisfied.
This list is, of course, not exhaustive, and you'll have to adapt it according to your precise business model and size. A small helicopter tour firm might not have the same level of expenditure as a larger one, for example.
What investments are needed to start or grow a helicopter tour firm?
Once you have an idea of how much sales you could achieve and what it will cost to run your helicopter tour firm, it is time to look into the equipment required to launch or expand the activity.
For a helicopter tour firm, capital expenditures and initial working capital items could include:
- Helicopters: As a helicopter tour firm, purchasing helicopters is one of the most significant capital expenditures you will make. These aircraft are essential for providing tours and are a major fixed asset for your business.
- Hangar Space: In order to store and maintain your helicopters, you will need to invest in hangar space. This can be a significant expense, especially if you need to rent or build a hangar specifically for your firm.
- Avionics and Navigation Equipment: To ensure the safety and efficiency of your helicopter tours, you will need to invest in avionics and navigation equipment. This includes items such as GPS systems, communication devices, and weather radar.
- Safety Equipment: As a helicopter tour firm, safety should be a top priority. This means investing in safety equipment such as life rafts, emergency locator transmitters, and first aid kits. These items are essential for the safety of your customers and crew.
- Ground Support Equipment: In addition to the helicopters themselves, you will also need to invest in ground support equipment. This includes items such as fuel trucks, maintenance equipment, and passenger transport vehicles.
Again, this list will need to be adjusted according to the specificities of your helicopter tour 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 helicopter tour firm
The next step in the creation of your financial forecast for your helicopter tour 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 helicopter tour firm?
Now let's have a look at the main output tables of your helicopter tour firm's financial forecast.
The profit & loss forecast
The forecasted profit & loss statement will enable you to visualise your helicopter tour firm's expected growth and profitability over the next three to five years.
A financially viable P&L statement for a helicopter tour firm 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 helicopter tour 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 helicopter tour 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 forecast
Your helicopter tour firm'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 helicopter tour firm:
- 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 helicopter tour firm'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 helicopter tour firm'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 helicopter tour firm's financial projections?
Building a helicopter tour 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 projection software to build your helicopter tour firm'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 helicopter tour 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 helicopter tour firm's financial forecast?
Creating an accurate and error-free helicopter tour firm 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 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 helicopter tour firm, 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 helicopter tour firm
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 helicopter tour 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 helicopter tour 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 sales for a business?
- Example of financial forecast for business idea
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Founder & CEO at The Business Plan Shop Ltd
