How to create a financial forecast for a seafood store?
Creating a financial forecast for your seafood store, 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 seafood store 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 seafood store?
The financial projections for your seafood store 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 seafood store'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 seafood store 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 seafood store, 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 seafood store 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 seafood store, 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 seafood store's financial forecast.
The sales forecast for a seafood store
The sales forecast, also called topline projection, is normally where you will start when building your seafood store 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 seafood stores), and consider the elements below:
- Seasonal Demand: As a seafood store owner, you may experience fluctuations in your average price and number of monthly transactions due to seasonal demand. For example, during the summer months, there may be a higher demand for seafood as people are more likely to grill and have outdoor gatherings, leading to an increase in both price and transactions. On the other hand, during the winter months, there may be a decrease in demand, resulting in lower prices and transactions.
- Availability and Quality: The availability and quality of seafood can also impact your average price and number of monthly transactions. If there is a shortage of a particular type of seafood, the price may increase due to limited supply. Similarly, if the quality of seafood is not up to par, customers may be less likely to purchase, resulting in a decrease in transactions.
- Competitors: Your competitors can also affect your average price and number of monthly transactions. If there are other seafood stores in the area offering similar products at lower prices, you may need to adjust your prices to remain competitive. This can result in a decrease in average price but may also attract more customers, leading to an increase in transactions.
- Economic Conditions: Changes in the economy can also impact your business. For example, during a recession, consumers may have less disposable income, leading to a decrease in both price and transactions. On the other hand, during a period of economic growth, consumers may have more disposable income, which can result in an increase in both price and transactions.
- Sustainability and Health Concerns: In recent years, there has been a growing concern for sustainable and healthy food options. As a seafood store owner, you may need to consider the source of your seafood and whether it aligns with these concerns. If your seafood is sustainably sourced and considered healthy, you may be able to charge a premium price and attract more customers, resulting in an increase in both price and 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 seafood store
Once you know what level of sales you can expect, you can start budgeting the expenses required to operate your seafood store 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 seafood store will include some of the following items:
- Staff costs: This includes salaries, wages, and benefits for all employees, such as cashiers, fishmongers, and kitchen staff.
- Accountancy fees: You will need to hire an accountant to help manage your finances, file taxes, and keep track of expenses.
- Insurance costs: You will need to have insurance to protect your business from potential risks, such as liability insurance for slip and fall accidents or product liability insurance for any issues with your seafood products.
- Software licenses: You may need to purchase software for things like inventory management, point-of-sale systems, and accounting software.
- Banking fees: This includes fees for credit card processing, business checking accounts, and any other banking services you may need.
- Rent: This is the cost of leasing or renting a physical location for your seafood store.
- Utilities: You will need to pay for electricity, water, and other utilities to keep your store running.
- Inventory: This is the cost of purchasing seafood products to sell in your store.
- Advertising and marketing: You will need to invest in advertising and marketing efforts to attract customers to your seafood store.
- Packaging and supplies: You will need to purchase packaging materials and supplies to package your seafood products for customers.
- Cleaning and maintenance: You will need to keep your store clean and well-maintained, which may require hiring cleaning services or purchasing cleaning supplies.
- Licenses and permits: You will need to obtain licenses and permits to operate a seafood store, and these may come with associated fees.
- Repairs and maintenance: You may need to repair or replace equipment and fixtures in your store as needed.
- Training and development: You may need to invest in training for your employees to ensure they have the necessary skills to work in a seafood store.
- Taxes: You will need to pay taxes on your business income, which can vary depending on your location and the type of business structure you have.
This list will need to be tailored to the specificities of your seafood store, but should offer a good starting point for your budget.
What investments are needed to start or grow a seafood store?
Creating and expanding a seafood store also requires investments which you need to factor into your financial forecast.
Capital expenditures and initial working capital items for a seafood store could include elements such as:
- Refrigeration equipment: This includes freezers, refrigerators, and walk-in coolers that are essential for storing and preserving seafood products. These equipment must be of high quality and meet industry standards to ensure the freshness and safety of your products.
- Display cases: As a seafood store, it is important to have attractive and functional display cases to showcase your products. These can range from refrigerated cases for raw seafood to dry cases for packaged seafood items.
- Fish cleaning station: A dedicated area for cleaning and preparing fresh fish is crucial for a seafood store. This may include sinks, cutting boards, and other equipment needed for cleaning and filleting fish.
- Point of sale system: A modern and efficient point of sale system is necessary for processing transactions, tracking inventory, and managing customer data. This can also include hardware such as cash registers, scanners, and card readers.
- Delivery vehicles: If your seafood store offers delivery services, you may need to invest in delivery vehicles such as refrigerated trucks or vans to ensure the safe transportation of your products to customers.
Again, this list is not exhaustive and will need to be adjusted according to the circumstances of your seafood store.
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 seafood store
The next step in the creation of your financial forecast for your seafood store 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 seafood store?
Now let's have a look at the main output tables of your seafood store's financial forecast.
The projected profit & loss statement
The projected profit & loss shows how profitable your seafood store is likely to be in the years to come.
For your seafood store to be financially viable, your projected P&L should ideally show:
- Sales growing above inflation (the higher the better)
- Profit margins which are stable or expanding (the higher the better)
- A net profit at the end of each financial year (the higher the better)
This is for established seafood stores, there is some leniency for startups which will have numbers that will look a bit different than existing businesses.
The projected balance sheet
Your seafood store'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 seafood store 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 seafood store'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 seafood store 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 seafood store's financial projections?
Building a seafood store 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 forecasting software to build your seafood store's projections
The modern and easiest way is to use professional online financial forecasting 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.
Hiring a financial consultant or chartered accountant
Hiring a consultant or chartered accountant is also an efficient way to get a professional seafood store 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 seafood store's financial forecast?
Creating an accurate and error-free seafood store 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 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 seafood store, 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 seafood store
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 seafood store.
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 seafood store. 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 project revenues for a business?
- Sample financial forecast for business idea
Know someone who runs or wants to start a seafood store? Share our financial projection guide with them!
Founder & CEO at The Business Plan Shop Ltd
