How to create a financial forecast for a matchmaking agency?
If you are serious about keeping visibility on your future cash flows, then you need to build and maintain a financial forecast for your matchmaking agency.
Putting together a matchmaking agency financial forecast may sound complex, but don’t worry, with the right tool, it’s easier than it looks, and The Business Plan Shop is here to guide you.
In this practical guide, we'll cover everything you need to know about building financial projections for your matchmaking agency.
We will start by looking at why they are key, what information is needed, what a forecast looks like once completed, and what solutions you can use to create yours.
Let's dive in!
Why create and maintain a financial forecast for a matchmaking agency?
The financial projections for your matchmaking agency act as a financial blueprint to guide its growth with confidence and ensure its long-term financial viability.
To create them, you will need to look at your business in detail - from sales to operating costs and investments - to assess how much profit it can generate in the years to come and what will be the associated cash flows.
During challenging market conditions, maintaining an up-to-date financial forecast enables early detection of potential financial shortfalls, allowing for timely adjustments or securing financing before facing a cash crisis.
Your matchmaking agency's financial forecast will also prove invaluable when seeking financing. Banks and investors will undoubtedly request a thorough examination of your financial figures, making precision and presentation essential.
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 matchmaking agency financial forecast?
A matchmaking agency's financial forecast needs to be built on the right foundation: your assumptions.
The data required to create your assumptions will depend on whether you are a new or existing matchmaking agency.
If you are creating (or updating) the forecast of an existing matchmaking agency, then your main inputs will be historical accounting data and operating metrics, and your team’s view on what to expect for the next three to five years.
If you are building financial projections for a new matchmaking agency startup, you will need to rely on market research to form your go-to-market strategy and derive your sales forecast.
For a new venture, you will also need an itemised list of resources needed for the matchmaking agency to operate, along with a list of equipment required to launch the venture (more on that below).
Now that you understand what is needed, let’s have a look at what elements will make up your matchmaking agency's financial forecast.
The sales forecast for a matchmaking agency
The sales forecast, also called topline projection, is normally where you will start when building your matchmaking agency 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 matchmaking agencies), and consider the elements below:
- Demographic Shifts: Changes in the population's age, gender, and income levels can affect the demand for matchmaking services. For example, if there is a growing number of single professionals in your area, you may see an increase in demand for your services and be able to charge higher prices.
- Competition: The number of competitors in your area can affect your average price and number of monthly transactions. If there is a new matchmaking agency opening up in your town, you may need to adjust your prices or offer additional services to stay competitive.
- Technology Advancements: As technology continues to advance, it can impact the way people find and connect with potential partners. Your agency may need to adapt to new online dating platforms or offer virtual matchmaking services to stay relevant and attract more clients.
- Economic Climate: Changes in the economy, such as a recession or economic boom, can impact the average price and number of monthly transactions for your matchmaking agency. During a recession, people may be less likely to spend money on matchmaking services, while during a boom, they may be more willing to invest in finding a partner.
- Cultural Shifts: Changes in societal norms and attitudes towards dating and relationships can also affect your business. For example, if there is a growing trend towards non-traditional relationships, you may need to adjust your services and pricing to cater to this market.
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 matchmaking agency
The next step is to estimate the expenses needed to run your matchmaking agency 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 matchmaking agency's operating expenses should include the following items at a minimum:
- Staff Costs: This includes salaries, wages, benefits, and training for your matchmaking agency's employees. You may also have to account for payroll taxes and employee benefits such as health insurance.
- Accountancy Fees: You will need to hire an accountant to help you manage your financial records and prepare tax returns for your matchmaking agency. These services can be expensive but are necessary to ensure your financial stability.
- Insurance Costs: As a matchmaking agency, you will need to have insurance to protect your business from potential risks such as liability claims, property damage, and employee injuries. Insurance premiums can vary depending on the coverage you need.
- Software Licenses: To operate efficiently, you will need to invest in software licenses for your matchmaking agency. This may include customer relationship management (CRM) software, billing and invoicing software, and other tools to help you manage your operations.
- Banking Fees: You will need to open a business bank account to manage your matchmaking agency's finances. This may include fees for monthly account maintenance, wire transfers, and other banking services.
- Marketing and Advertising: To attract clients, you will need to invest in marketing and advertising efforts. This may include creating a website, social media advertising, and attending networking events to promote your matchmaking agency.
- Office Rent: If you have a physical office, you will need to pay rent for the space. This can be a significant expense, especially in high-demand areas.
- Utilities: Your matchmaking agency will incur expenses for utilities such as electricity, water, and internet services. These are necessary for your daily operations.
- Travel Expenses: You may need to travel to meet with clients or attend industry events to promote your matchmaking agency. These travel expenses, including transportation, lodging, and meals, should be accounted for in your budget.
- Legal Fees: As a business owner, you may need to consult with a lawyer for legal advice or to draft contracts for your matchmaking agency. These services can be costly, but they are essential to protect your business.
- Training and Development: To stay competitive, your matchmaking agency will need to invest in ongoing training and development for your staff. This may include attending conferences, workshops, or online courses related to the industry.
- Office Supplies: You will need basic office supplies such as stationery, printer ink, and other materials to keep your business running smoothly.
- Telecommunications: Your matchmaking agency will need phone and internet services to communicate with clients and staff. These costs should be factored into your operating expenses.
- Taxes: As a business owner, you will need to pay taxes on your profits. This may include income tax, sales tax, and other business taxes, depending on your location.
- Professional Memberships: To stay connected with the matchmaking industry and access valuable resources, you may need to join professional organizations or associations. These memberships often come with annual fees.
This list is, of course, not exhaustive, and you'll have to adapt it according to your precise business model and size. A small matchmaking agency might not have the same level of expenditure as a larger one, for example.
What investments are needed to start or grow a matchmaking agency?
Your matchmaking agency 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 matchmaking agency, these could include:
- Office space: This includes the cost of renting or purchasing a physical location for your matchmaking agency. You may also need to consider expenses such as furniture, equipment, and utilities.
- Technology: As a matchmaking agency, you will need to invest in technology to effectively match clients and manage your database. This may include purchasing computers, software programs, and other necessary equipment.
- Professional fees: In order to legally operate as a matchmaking agency, you may need to hire a lawyer or accountant to help with legal and financial matters. These fees should be included in your expenditure forecast.
- Training and development: While this is not an operating expense, investing in training and development for your staff is important for the success of your matchmaking agency. This may include attending industry conferences, workshops, or hiring a consultant.
- Marketing materials: While marketing and advertising expenses should not be included in your expenditure forecast, you may need to invest in marketing materials such as business cards, brochures, and promotional items to promote your matchmaking agency.
Again, this list will need to be adjusted according to the size and ambitions of your matchmaking agency.
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 matchmaking agency
The next step in the creation of your financial forecast for your matchmaking agency 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 matchmaking agency?
Now let's have a look at the main output tables of your matchmaking agency's financial forecast.
The profit & loss forecast
The forecasted profit & loss statement will enable you to visualise your matchmaking agency's expected growth and profitability over the next three to five years.
A financially viable P&L statement for a matchmaking agency 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 matchmaking agency'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 matchmaking agency'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 matchmaking agency:
- 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 matchmaking agency'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 matchmaking agency'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 matchmaking agency's financial projections?
Building a matchmaking agency 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 matchmaking agency'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 matchmaking agency 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 matchmaking agency'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 matchmaking agency 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 matchmaking agency'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 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 matchmaking agency, 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 matchmaking agency
Takeaways
- A financial forecast shows expected growth, profitability, and cash generation metrics for your matchmaking agency.
- Tracking actuals vs. forecast and having an up-to-date financial forecast is key to maintaining visibility on your future cash flows.
- Using financial forecasting software is the modern way of creating and maintaining financial projections.
We hope that this guide helped you gain a clearer perspective on the steps needed to create the financial forecast for a matchmaking agency. Don't hesitate to contact us if you 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
- Financial forecast example
- How to write a matchmaking agency business plan
- How to create a turnover forecast for a business?
- Sample financial forecast for business idea
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Founder & CEO at The Business Plan Shop Ltd
