How to create a financial forecast for a hunting and trapping company?
Creating a financial forecast for your hunting and trapping 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 hunting and trapping 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 hunting and trapping 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 hunting and trapping company becomes handy.
Creating a hunting and trapping 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 hunting and trapping 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 hunting and trapping 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 hunting and trapping 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 hunting and trapping company financial forecast?
A hunting and trapping 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 hunting and trapping 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 hunting and trapping 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 hunting and trapping 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 hunting and trapping company's financial forecast.
The sales forecast for a hunting and trapping company
From experience, it usually makes sense to start your hunting and trapping company's financial projection with the revenues forecast.
The inputs used to forecast your sales will include the historical trading data of your hunting and trapping 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 hunting and trapping 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:
- Hunting Regulations: Changes in hunting regulations can affect the number of monthly transactions for your hunting and trapping company. For example, if the regulations become more restrictive, it may decrease the number of hunters and trappers in the area, resulting in a decrease in monthly transactions.
- Weather Conditions: Extreme weather conditions, such as heavy snow or rain, can impact the number of monthly transactions for your hunting and trapping company. These conditions can make it difficult for hunters and trappers to access certain areas, resulting in a decrease in transactions.
- Wildlife Population: The population of the animals being hunted and trapped can also affect the average price and number of monthly transactions. If the population of a particular species decreases, it may increase the average price as hunters and trappers compete for limited resources. On the other hand, an increase in population can result in more opportunities for transactions.
- Competition: The presence of other hunting and trapping companies in the area can also impact your average price and number of monthly transactions. If there are a lot of competitors, it may lead to lower prices and a decrease in transactions as customers have more options to choose from.
- Economic Conditions: Economic conditions, such as a recession or economic boom, can affect the demand for hunting and trapping services. During a recession, people may have less disposable income to spend on leisure activities like hunting and trapping, resulting in a decrease in transactions. Conversely, during an economic boom, there may be an increase in demand for these services, leading to an increase in 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.
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 hunting and trapping company
The next step is to estimate the costs you’ll have to incur to operate your hunting and trapping company.
These will vary based on where your business is located, and its overall size (level of sales, personnel, etc.).
But your hunting and trapping company's operating expenses should normally include the following items:
- Staff costs: This includes salaries, wages, and benefits for employees such as hunting and trapping guides, administrative staff, and maintenance workers.
- Accountancy fees: You may need to hire an accountant to help with bookkeeping, tax preparation, and financial planning for your hunting and trapping company.
- Insurance costs: It is important to have insurance coverage for your business, including liability insurance for any accidents or injuries that may occur during hunting or trapping activities.
- Software licenses: You may need to purchase licenses for software programs that are essential for running your business, such as accounting software or customer relationship management (CRM) software.
- Banking fees: Your hunting and trapping company will have various banking needs, including fees for business bank accounts, credit card processing fees, and wire transfer fees.
- Fuel and vehicle expenses: Hunting and trapping often involves traveling to remote locations, so you will need to budget for fuel costs and vehicle maintenance for your company vehicles.
- Equipment and supplies: This includes the cost of purchasing and maintaining hunting and trapping equipment, such as guns, traps, and camouflage gear.
- Marketing and advertising: You may need to invest in marketing and advertising to promote your hunting and trapping company, such as creating a website, printing brochures, or running social media ads.
- Permits and licenses: In order to legally operate a hunting and trapping company, you will need to obtain permits and licenses, which may have associated fees.
- Rent or lease payments: If you do not own the property where your hunting and trapping business is located, you will need to budget for rent or lease payments.
- Utilities: This includes the cost of electricity, water, and other utilities for your business premises.
- Training and education: You may need to invest in training and education for yourself and your employees to stay up-to-date on hunting and trapping techniques, safety protocols, and regulations.
- Professional services: You may need to hire outside professionals for services such as legal advice, marketing consulting, or website design.
- Vehicle and equipment repairs: In addition to regular maintenance, unexpected repairs may be necessary for your company vehicles and equipment.
- Taxes: As a business owner, you will be responsible for paying various taxes, including income tax, sales tax, and property tax (if you own your business premises).
This list is not exhaustive by any means, and will need to be tailored to your hunting and trapping company's specific circumstances.
What investments are needed to start or grow a hunting and trapping company?
Creating and expanding a hunting and trapping company also requires investments which you need to factor into your financial forecast.
Capital expenditures and initial working capital items for a hunting and trapping company could include elements such as:
- Hunting and Trapping Equipment: This includes items such as rifles, traps, and other equipment used for hunting and trapping game.
- Transportation Vehicles: A hunting and trapping company may need to invest in vehicles such as trucks or ATVs to transport equipment and game.
- Land and Property: Depending on the size and scope of the company, purchasing or leasing land and property for hunting and trapping activities may be necessary.
- Storage Facilities: A hunting and trapping company may need to invest in storage facilities for equipment, game, and other supplies.
- Processing Equipment: This includes items such as butchering equipment, cold storage, and other equipment needed to process and store game meat.
Again, this list is not exhaustive and will need to be adjusted according to the circumstances of your hunting and trapping 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 hunting and trapping company
The next step in the creation of your financial forecast for your hunting and trapping 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 hunting and trapping company?
Now let's have a look at the main output tables of your hunting and trapping company'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 hunting and trapping company'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 hunting and trapping company will look different than for a startup.
The projected balance sheet
Your hunting and trapping company's projected balance sheet provides a snapshot of your business’s financial position at year-end.
It is composed of three types of elements: assets, liabilities and equity:
- Assets: represent what the business possesses including cash, equipment, and accounts receivable (money owed by clients).
- Liabilities: represent funds advanced to the business by lenders and other creditors. They include accounts payable (money owed to suppliers), taxes payable and loans from banks and financial institutions.
- 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 forecast
Your hunting and trapping 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 hunting and trapping 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 hunting and trapping 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 hunting and trapping 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 hunting and trapping company's financial forecast?
Using the right tool or solution will make the creation of your hunting and trapping company's financial forecast much easier than it sounds. Let’s explore the main options.
Using online financial forecasting software to build your hunting and trapping company'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
Outsourcing the creation of your hunting and trapping 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 hunting and trapping company's financial forecast?
Creating an accurate and error-free hunting and trapping company 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 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 hunting and trapping 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 hunting and trapping 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 hunting and trapping 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 create a sales forecast for a business?
- Financial forecast template for a business idea
Know someone who owns or is thinking of starting a hunting and trapping company? Share our forecasting guide with them!
Founder & CEO at The Business Plan Shop Ltd
