How to create a financial forecast for a pony centre?
Developing and maintaining an up-to-date financial forecast for your pony centre 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 pony centre 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 pony centre?
Creating and maintaining an up-to-date financial forecast is the only way to steer the development of your pony centre and ensure that it can be financially viable in the years to come.
A financial plan for a pony centre 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 pony centre 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 pony centre'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 used as input to build a pony centre financial forecast?
A pony centre'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 pony centre.
If you are creating (or updating) the forecast of an existing pony centre, 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 pony centre 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 pony centre 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 pony centre's financial forecast.
The sales forecast for a pony centre
The sales forecast, also called topline projection, is normally where you will start when building your pony centre 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 pony centres), and consider the elements below:
- Pony breed popularity: The popularity of certain pony breeds can greatly impact the average price of ponies at your centre. For example, if a certain breed becomes trendy or in high demand, you may be able to charge a higher price for them, ultimately increasing your average price per pony.
- Seasonal demand: The time of year can greatly affect the number of monthly transactions at your pony centre. During the summer months, when families are more likely to go on vacation and participate in outdoor activities, you may see an increase in pony rides and lessons. However, during the winter months, when the weather is colder and people are less likely to spend time outside, you may see a decrease in transactions.
- Local competition: The presence of other pony centres in your area can impact your average price and number of monthly transactions. If there are many other pony centres nearby, you may need to lower your prices or offer promotions to remain competitive. Similarly, if you are the only pony centre in the area, you may have more flexibility in setting your prices and may see a higher number of transactions.
- Economic conditions: Economic factors such as inflation, unemployment rates, and consumer spending can also affect your pony centre's sales forecast. During times of economic downturn, consumers may be less likely to spend money on leisure activities like pony rides and lessons, resulting in a decrease in transactions. Conversely, during times of economic growth, consumers may have more disposable income and be more willing to spend money at your pony centre.
- Events and promotions: Hosting special events or offering promotions can impact your average price and number of transactions. For example, a themed pony ride event or discounted lesson package may attract more customers and increase your transactions for that month. On the other hand, if you do not have any events or promotions planned, you may see a decrease in transactions.
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 pony centre
Once you know what level of sales you can expect, you can start budgeting the expenses required to operate your pony centre 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 pony centre will include some of the following items:
- Staff costs: This includes salaries, wages, and benefits for your pony centre staff, including trainers, stable hands, and administrative personnel.
- Feed and bedding: You'll need to purchase hay, grain, and other feed for your ponies, as well as bedding materials like straw or shavings.
- Veterinary expenses: Caring for ponies requires regular visits from a veterinarian, as well as expenses for vaccinations, deworming, and any necessary medical treatments.
- Farrier costs: Just like humans, ponies need regular hoof care from a farrier to keep them healthy and sound.
- Facility maintenance: Your pony centre will need to be kept clean and in good repair, which may require expenses for cleaning supplies, repairs, and maintenance services.
- Tack and equipment: You'll need to purchase saddles, bridles, halters, and other equipment for your ponies, as well as grooming supplies and other necessary tack.
- Utilities: Running a pony centre means you'll have ongoing expenses for electricity, water, and possibly gas or propane for heating.
- Marketing and advertising: In order to attract clients and promote your pony centre, you may need to spend money on advertising, website maintenance, and other marketing efforts.
- Office supplies: You'll need basic office supplies like paper, ink, and printer cartridges to keep your administrative operations running smoothly.
- Accountancy fees: To stay on top of your finances and ensure your pony centre is running profitably, you may want to hire an accountant to help with bookkeeping and financial planning.
- Insurance costs: It's important to protect your business and your ponies with adequate insurance coverage, which may include liability insurance, property insurance, and insurance for your ponies.
- Software licenses: In order to manage your bookings, client information, and other administrative tasks, you may need to purchase software and pay for ongoing licensing fees.
- Banking fees: Running a business means dealing with banking fees, including transaction fees, account maintenance fees, and potential fees for overdrafts or bounced checks.
- Professional development: As a pony centre owner, it's important to stay up-to-date on best practices and industry trends, which may require expenses for attending conferences, workshops, or other professional development opportunities.
- General liability insurance: In addition to insurance for your ponies, it's important to have general liability insurance in case of accidents or injuries that may occur on your property.
This list will need to be tailored to the specificities of your pony centre, but should offer a good starting point for your budget.
What investments are needed to start or grow a pony centre?
Your pony centre 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 pony centre, these could include:
- Stable Construction and Renovation: This includes building new stables or renovating existing ones to increase capacity or improve the overall condition of the stables. This may also include purchasing building materials, hiring contractors, and obtaining necessary permits.
- Arena and Riding Equipment: This category includes purchasing or upgrading riding equipment such as saddles, bridles, and training aids. It also includes maintaining and repairing the arena, such as replacing footing or adding new jumps.
- Transportation Equipment: As a pony centre, you may need to invest in transportation equipment such as horse trailers or trucks to transport your ponies to shows or off-site events.
- Veterinary and Medical Supplies: It's important to have a well-stocked medical kit and access to necessary veterinary supplies for the health and well-being of your ponies. This may include purchasing items such as first aid kits, medications, and bandages.
- Office and Administrative Expenses: This category includes items such as computers, printers, and office furniture that are necessary for managing the administrative tasks of your pony centre. It may also include software or other technology to help with scheduling, billing, and record-keeping.
Again, this list will need to be adjusted according to the size and ambitions of your pony centre.
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 pony centre
The next step in the creation of your financial forecast for your pony centre 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 pony centre?
Now let's have a look at the main output tables of your pony centre'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 pony centre'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 pony centre will look different than for a startup.
The projected balance sheet
Your pony centre's forecasted balance sheet enables you to assess your financial structure and working capital requirements.
It is composed of three types of elements: assets, liabilities and equity:
- Assets: represent what the business owns and uses to produce cash flows. It includes resources such as cash, equipment, and accounts receivable (money owed by clients).
- Liabilities: represent funds advanced to the business by lenders and other creditors. It includes items such as accounts payable (money owed to suppliers), taxes due and loans.
- 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 projection
The cash flow forecast of your pony centre 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 pony centre'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 pony centre 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 pony centre'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 pony centre's financial forecast?
Creating your pony centre's financial forecast may sound fairly daunting, but the good news is that there are several ways to go about it.
Using online financial forecasting software to build your pony centre's projections
The modern and easiest way is to use an online financial forecasting tool 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 projection software for free by signing up here.
Hiring a financial consultant or chartered accountant
Hiring a consultant or chartered accountant is also an efficient way to get a professional pony centre financial projection.
As you can imagine, this solution is much more expensive than using software. From experience, the creation of a simple financial forecast over three years (including a balance sheet, income statement, and cash flow statement) is likely to start around £700 or $1,000 excluding taxes.
The indicative estimate above, is for a small business, and a forecast done as a one-off. Using a financial consultant or accountant to track your actuals vs. forecast and to keep your financial forecast up to date on a monthly or quarterly basis will naturally cost a lot more.
If you choose this solution, make sure your service provider has first-hand experience in your industry, so that they may challenge your assumptions and offer insights (as opposed to just taking your figures at face value to create the forecast’s financial statements).
Why not use a spreadsheet such as Excel or Google Sheets to build your pony centre's financial forecast?
Creating an accurate and error-free pony centre 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 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 pony centre, 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
- A financial forecast shows expected growth, profitability, and cash generation metrics for your pony centre.
- 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 pony centre. 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 project sales for a business?
- Example of financial forecast for business idea
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Founder & CEO at The Business Plan Shop Ltd
