How to create a financial forecast for a rugby club?
Creating a financial forecast for your rugby club, 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 rugby club 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 rugby club?
The financial projections for your rugby club 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 rugby club'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 needed to build a rugby club 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 rugby club, 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 rugby club 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 rugby club, 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 rugby club's financial forecast.
The sales forecast for a rugby club
The sales forecast, also called topline projection, is normally where you will start when building your rugby club 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 rugby clubs), and consider the elements below:
- Player Performance: The performance of your team on the field can directly impact the average price of tickets and number of monthly transactions. A successful and competitive team can attract more fans and increase demand for tickets, resulting in higher prices and more transactions.
- Injuries: Injuries to key players can affect the team's performance and ultimately, the average price and number of monthly transactions. If a star player is injured, fans may be less likely to attend games, resulting in lower prices and fewer transactions.
- Competition: The competition within your league or region can also impact your sales forecast. If there are other popular rugby teams in the area, it may be harder to attract fans and sell tickets, leading to lower prices and fewer transactions.
- Facilities: The quality and amenities of your stadium can also affect the average price and number of monthly transactions. A well-maintained and modern stadium can attract more fans and command higher prices, while a run-down or outdated facility may deter potential customers.
- Fan Engagement: The level of fan engagement and loyalty can also play a significant role in your sales forecast. If you have a strong and dedicated fan base, they may be more likely to attend games and support the team, resulting in higher prices and more 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 rugby club
The next step is to estimate the expenses needed to run your rugby club 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 rugby club's operating expenses should include the following items at a minimum:
- Staff Costs: This includes salaries, wages, and benefits for coaches, trainers, and administrative staff.
- Facility Rental: You will need to pay for the use of a field or indoor facility for training and games.
- Equipment and Uniforms: This includes purchasing and maintaining necessary equipment such as balls, cones, and scrum machines, as well as team uniforms and gear.
- Travel Expenses: This includes transportation costs for away games, such as flights, buses, and rental cars.
- Medical Supplies: You should budget for first aid kits, ice packs, and other medical supplies for injuries sustained during games or training.
- Marketing and Advertising: To promote your club and attract new members, you may need to spend money on advertising and marketing materials.
- League Fees: Your club will need to pay fees to participate in a league or tournament.
- Referee Fees: You may need to pay referees for officiating games.
- Insurance: It is important to have liability insurance to protect your club in case of any accidents or injuries.
- Accounting and Bookkeeping Fees: You will need to hire an accountant or bookkeeper to keep track of your club's finances and file taxes.
- Software Licenses: You may need to purchase software for managing team schedules, tracking player statistics, or managing finances.
- Banking Fees: You may incur fees for processing payments, making deposits, or using online banking services.
- Team Events: Your club may organize team bonding events or social events, which will require a budget for venue rental, food, and other expenses.
- Uniform Maintenance: As uniforms and gear get worn and torn, you may need to budget for repairs or replacements.
- Field Maintenance: You will need to maintain your field or facility, including mowing, lining, and other upkeep costs.
This list is, of course, not exhaustive, and you'll have to adapt it according to your precise business model and size. A small rugby club might not have the same level of expenditure as a larger one, for example.
What investments are needed to start or grow a rugby club?
Your rugby club 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 rugby club, these could include:
- Rugby equipment: This includes items such as balls, training gear, and protective gear for players. These are essential for the functioning of a rugby club and will need to be replaced or upgraded regularly.
- Field maintenance: Rugby clubs need to maintain their playing fields to ensure safe and playable conditions for games and practices. This may include costs for turf maintenance, irrigation systems, and field marking equipment.
- Clubhouse renovations: The clubhouse is often the heart of a rugby club and may require renovations or upgrades over time to accommodate growing membership and improve facilities for players and spectators.
- Team transportation: Rugby clubs often need to travel to different locations for games and tournaments. This may require the purchase or lease of vehicles, as well as ongoing maintenance and fuel costs.
- Gym equipment: Many rugby clubs have a gym or training facility for their players. This may require purchasing or upgrading equipment such as weights, cardio machines, and other training tools.
Again, this list will need to be adjusted according to the size and ambitions of your rugby 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 rugby club
The next step in the creation of your financial forecast for your rugby 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 rugby club?
Now let's have a look at the main output tables of your rugby club's financial forecast.
The profit & loss forecast
The forecasted profit & loss statement will enable you to visualise your rugby club's expected growth and profitability over the next three to five years.
A financially viable P&L statement for a rugby club 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
The projected balance sheet gives an overview of your rugby club's financial structure at the end of the financial year.
It is composed of three categories of items: assets, liabilities and equity:
- Assets: are what the business possesses and uses to produce cash flows. It includes resources such as cash, buildings, equipment, and accounts receivable (money owed by clients).
- Liabilities: are the debts of your rugby club. They include accounts payable (money owed to suppliers), taxes due and bank loans.
- Equity: is the combination of what has been invested by the business owners and the cumulative profits 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 rugby 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 rugby 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 rugby 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 rugby 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 rugby club's financial forecast?
Using the right tool or solution will make the creation of your rugby club's financial forecast much easier than it sounds. Let’s explore the main options.
Using online financial forecasting software to build your rugby club'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 rugby club 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 rugby club's financial forecast?
Creating an accurate and error-free rugby club 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 rugby club, 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 rugby club.
- 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 rugby club. 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 revenues for a business?
- Sample financial forecast for business idea
Know someone who runs a rugby club? Share our business guide with them!
Founder & CEO at The Business Plan Shop Ltd
