How to create a financial forecast for a quad and buggy hiking club?
If you are serious about keeping visibility on your future cash flows, then you need to build and maintain a financial forecast for your quad and buggy hiking club.
Putting together a quad and buggy hiking club 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 quad and buggy hiking club.
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 quad and buggy hiking club?
Creating and maintaining an up-to-date financial forecast is the only way to steer the development of your quad and buggy hiking club and ensure that it can be financially viable in the years to come.
A financial plan for a quad and buggy hiking club 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 quad and buggy hiking club 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 quad and buggy hiking club'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 quad and buggy hiking club financial forecast?
A quad and buggy hiking club'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 quad and buggy hiking club, 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 quad and buggy hiking club 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 quad and buggy hiking club 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 quad and buggy hiking club's financial forecast.
The sales forecast for a quad and buggy hiking club
From experience, it is usually best to start creating your quad and buggy hiking club financial forecast by your sales forecast.
To create an accurate sales forecast for your quad and buggy hiking club, you will have to rely on the data collected in your market research, or if you're running an existing quad and buggy hiking club, the historical data of the business, to estimate two key variables:
- The average price
- The number of monthly transactions
To get there, you will need to consider the following factors:
- Terrain conditions: The type of terrain that your club offers for quad and buggy hiking can affect the average price and number of monthly transactions. If your club offers a variety of terrains, such as mountainous, rocky, or sandy, it may attract more customers and allow you to charge higher prices.
- Weather: The weather can have a significant impact on the number of monthly transactions for your quad and buggy hiking club. If the weather is unfavorable, such as heavy rain or extreme heat, it may discourage customers from participating in outdoor activities and decrease your monthly transactions.
- Competitor offerings: The prices and services offered by your competitors can also affect your club's average price and number of monthly transactions. If your competitors offer similar activities at lower prices or with more attractive packages, it may impact your sales and force you to adjust your prices to stay competitive.
- Seasonal demand: The demand for quad and buggy hiking may vary depending on the season. During peak tourism seasons, such as summer or holidays, you may experience high demand and be able to charge higher prices. On the other hand, during off-seasons, your monthly transactions may decrease, and you may have to lower your prices to attract customers.
- Equipment maintenance and upgrades: The condition of your quad and buggy equipment can also affect your club's average price and number of monthly transactions. If your equipment is not well-maintained or outdated, it may discourage customers from participating or result in negative reviews, impacting your sales. Regular maintenance and upgrades can help you maintain customer satisfaction and attract new customers.
Once you have an idea of what your future sales will look like, it will be time to work on your overhead budget. Let’s see what this entails.
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 quad and buggy hiking club
Once you know what level of sales you can expect, you can start budgeting the expenses required to operate your quad and buggy hiking club 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 quad and buggy hiking club will include some of the following items:
- Staff costs: This includes salaries, benefits, and training for all club employees, such as tour guides and administrative staff.
- Accountancy fees: You will need to hire an accountant to handle the club's financial records, taxes, and other financial matters.
- Insurance costs: As a quad and buggy hiking club, you will need to have insurance to cover any accidents or injuries that may occur during tours.
- Software licenses: You will need to purchase licenses for any software you use to manage bookings, schedules, and other administrative tasks.
- Marketing and advertising: To attract customers, you will need to invest in marketing and advertising efforts, such as creating a website, printing flyers, and running social media campaigns.
- Equipment maintenance: Quad bikes and buggies require regular maintenance to ensure they are in good working condition. This includes oil changes, tire replacements, and other repairs.
- Fuel costs: As a quad and buggy hiking club, you will need to budget for fuel expenses for all your vehicles.
- Permits and licenses: Depending on your location, you may need to obtain permits and licenses to operate a quad and buggy hiking club.
- Office supplies: You will need to purchase office supplies such as paper, ink, and stationary for administrative tasks.
- Training and certifications: To ensure the safety of your customers, you may need to invest in training and certifications for your tour guides and staff.
- Rent/lease payments: If you do not own the property where your club is located, you will need to budget for rent or lease payments.
- Utilities: You will need to pay for utilities such as electricity, water, and internet for your club's office and any other facilities.
- Travel expenses: If you plan on organizing tours outside of your local area, you will need to budget for travel expenses such as gas, accommodations, and food.
- Banking fees: You will need to pay fees for banking services, such as wire transfers and credit card processing.
- Legal fees: In case of any legal matters related to your club, you may need to hire a lawyer and budget for legal fees.
This list will need to be tailored to the specificities of your quad and buggy hiking club, but should offer a good starting point for your budget.
What investments are needed to start or grow a quad and buggy hiking club?
Creating and expanding a quad and buggy hiking club also requires investments which you need to factor into your financial forecast.
Capital expenditures and initial working capital items for a quad and buggy hiking club could include elements such as:
- You will need quad and buggy vehicles for your hiking club, which are generally expensive purchases. These vehicles will be used to transport members and equipment to hiking locations.
- Trail maintenance equipment, such as rakes, shovels, and wheelbarrows, will be necessary for keeping hiking trails in good condition. These items are considered fixed assets and will be used for the long-term benefit of the club.
- Storage sheds or containers for storing equipment and supplies will be needed to keep your hiking club organized and prepared for outings. These assets will also protect your equipment from weather and potential theft.
- Safety gear for members, such as first aid kits, emergency radios, and GPS devices, is essential for any hiking club. These items will be necessary to ensure the safety and well-being of your members while on hikes.
Again, this list is not exhaustive and will need to be adjusted according to the circumstances of your quad and buggy hiking club.
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 quad and buggy hiking club
The next step in the creation of your financial forecast for your quad and buggy hiking club 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 quad and buggy hiking club?
Now let's have a look at the main output tables of your quad and buggy hiking club'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 quad and buggy hiking club'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 quad and buggy hiking club will look different than for a startup.
The projected balance sheet
Your quad and buggy hiking club'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 quad and buggy hiking club 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 quad and buggy hiking club'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 quad and buggy hiking club 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 quad and buggy hiking club'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 quad and buggy hiking club's financial forecast?
Using the right tool or solution will make the creation of your quad and buggy hiking club's financial forecast much easier than it sounds. Let’s explore the main options.
Using online financial projection software to build your quad and buggy hiking club'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 quad and buggy hiking club 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 quad and buggy hiking club'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 quad and buggy hiking club 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 quad and buggy hiking club'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
- 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 quad and buggy hiking club 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 quad and buggy hiking club, 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
- Sample financial forecast for business idea
- How to create a turnover forecast for a business?
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Founder & CEO at The Business Plan Shop Ltd
