How to create a financial forecast for a laser tag gaming center?
Developing and maintaining an up-to-date financial forecast for your laser tag gaming center 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 laser tag gaming center 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 laser tag gaming center?
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 laser tag gaming center becomes handy.
Creating a laser tag gaming center 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 laser tag gaming center.
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 laser tag gaming center 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 laser tag gaming center'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 needed to build a laser tag gaming center 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 laser tag gaming center, 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 laser tag gaming center 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 laser tag gaming center, 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 laser tag gaming center's financial forecast.
The sales forecast for a laser tag gaming center
The sales forecast, also called topline projection, is normally where you will start when building your laser tag gaming center financial forecast.
Creating a coherent sales projection boils down to estimating two key drivers:
- The average price
- The number of monthly transactions
To do this, you will need to rely on historical data (for an existing business), market research data (for both new and existing laser tag gaming centers), and consider the elements below:
- Local Competition: The presence of other laser tag gaming centers in the area may affect your average price and number of monthly transactions. If there are many competitors, you may need to lower your prices to remain competitive and attract more customers.
- School Holidays: The timing of school holidays can greatly impact your business. During peak holiday seasons, such as summer break or winter break, you can expect an increase in the number of monthly transactions as more families are looking for fun activities to do together.
- Special Events: Hosting special events, such as birthday parties or corporate team building activities, can have a significant impact on your average price and number of monthly transactions. These events typically involve larger groups and may result in higher revenue for your business.
- Technology Upgrades: As technology advances, you may need to invest in new equipment or upgrades to keep your laser tag gaming center competitive. This could result in a higher average price for your services, but also attract more customers who are seeking a more modern and immersive experience.
- Seasonal Trends: Similar to school holidays, seasonal trends can also affect your business. For example, during the summer months, you may see an increase in the number of monthly transactions as more people are looking for indoor activities to escape the heat.
After the sales forecast comes the operating expenses budget, which we will now look into in more detail.
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 laser tag gaming center
The next step is to estimate the costs you’ll have to incur to operate your laser tag gaming center.
These will vary based on where your business is located, and its overall size (level of sales, personnel, etc.).
But your laser tag gaming center's operating expenses should normally include the following items:
- Staff Costs: This includes wages, salaries, and benefits for your laser tag center staff, such as game masters, front desk attendants, and maintenance workers.
- Accountancy Fees: You will need to hire an accountant to help with bookkeeping, tax preparation, and other financial tasks for your laser tag center.
- Insurance Costs: To protect your business and its assets, you will need to pay for various types of insurance, including general liability, property, and workers' compensation.
- Software Licences: You will need to purchase licenses for specialized software programs that are used for booking reservations, managing inventory, and tracking customer data.
- Banking Fees: Your laser tag center will have various banking needs, such as setting up a business bank account, processing credit card payments, and paying fees for cash management services.
- Rent: You will need to pay rent for the space where your laser tag center is located.
- Utilities: Your laser tag center will have ongoing expenses for utilities, such as electricity, water, and gas.
- Marketing and Advertising: To attract customers, you will need to invest in marketing and advertising efforts, such as digital ads, flyers, and social media campaigns.
- Equipment Maintenance: Your laser tag equipment will require regular maintenance and repairs to ensure it is in good working condition.
- Cleaning and Supplies: You will need to purchase cleaning supplies and other necessary items to keep your laser tag center clean and well-stocked.
- Security: To ensure the safety of your customers and employees, you may need to invest in security measures, such as cameras, alarms, and security personnel.
- Professional Services: You may need to hire outside professionals, such as lawyers or consultants, for specific tasks related to your laser tag center.
- Training and Development: To provide exceptional customer service and maintain a high-quality gaming experience, you may need to invest in ongoing training and development for your staff.
- Inventory: You will need to purchase and replenish inventory items, such as laser tag vests and game equipment, on a regular basis.
- Office Supplies: Your laser tag center will have ongoing expenses for office supplies, such as paper, pens, and printer ink.
This list is not exhaustive by any means, and will need to be tailored to your laser tag gaming center's specific circumstances.
What investments are needed to start or grow a laser tag gaming center?
Creating and expanding a laser tag gaming center also requires investments which you need to factor into your financial forecast.
Capital expenditures and initial working capital items for a laser tag gaming center could include elements such as:
- Laser Tag Equipment: This includes all the necessary equipment for a laser tag gaming center such as laser tag guns, vests, and sensors.
- Arena Design and Construction: The design and construction of the arena is a major capital expenditure for a laser tag gaming center, including materials, labor, and any necessary permits.
- Score Tracking System: A score tracking system is essential for a successful laser tag gaming center. This can include software, screens, and other hardware necessary to keep track of scores and game progress.
- Sound and Lighting System: A laser tag gaming center requires a high-quality sound and lighting system to create an immersive and exciting experience for players. This can include speakers, special effects lighting, and control systems.
- Furniture and Decor: The furniture and decor of a laser tag gaming center can also be a significant capital expenditure. This includes seating, tables, signage, and any other elements needed to create a comfortable and visually appealing environment for players.
Again, this list is not exhaustive and will need to be adjusted according to the circumstances of your laser tag gaming center.
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 laser tag gaming center
The next step in the creation of your financial forecast for your laser tag gaming center 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 laser tag gaming center?
Now let's have a look at the main output tables of your laser tag gaming center's financial forecast.
The profit & loss forecast
The forecasted profit & loss statement will enable you to visualise your laser tag gaming center's expected growth and profitability over the next three to five years.
A financially viable P&L statement for a laser tag gaming center 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
Your laser tag gaming center'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 projected cash flow statement
A projected cash flow statement for a laser tag gaming center is used to show how much cash the business is generating or consuming.
The cash flow forecast is usually organised by nature to show three key metrics:
- The operating cash flow: do the core business activities generate or consume cash?
- The investing cash flow: how much is the business investing in long-term assets (this is usually compared to the level of fixed assets on the balance sheet to assess whether the business is regularly maintaining and renewing its equipment)?
- The financing cash flow: is the business raising new financing or repaying financiers (debt repayment, dividends)?
Cash is king and keeping an eye on future cash flows is imperative for running a successful business. Therefore, you should pay close attention to your laser tag gaming center's cash flow forecast.
If you are trying to secure financing, note that it is customary to provide both yearly and monthly cash flow forecasts in a financial plan - so that the reader can analyze seasonal variation and ensure the laser tag gaming center 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 laser tag gaming center's financial projections?
Building a laser tag gaming center 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 laser tag gaming center'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
Outsourcing the creation of your laser tag gaming center 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 laser tag gaming center'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 laser tag gaming center 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 laser tag gaming center'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 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
- 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 laser tag gaming center.
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 laser tag gaming center. 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 create a turnover forecast for a business?
- Sample financial forecast for business idea
Know someone who runs or wants to start a laser tag gaming center? Share our financial projection guide with them!
Founder & CEO at The Business Plan Shop Ltd
