How to create a financial forecast for a ski 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 ski club.
Putting together a ski 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 ski 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 ski club?
In order to prosper, your business needs to have visibility on what lies ahead and the right financial resources to grow. This is where having a financial forecast for your ski club becomes handy.
Creating a ski club financial forecast forces you to take stock of where your business stands and where you want it to go.
Once you have clarity on the destination, you will need to draw up a plan to get there and assess what it means in terms of future profitability and cash flows for your ski club.
Having this clear plan in place will give you the confidence needed to move forward with your business’s development.
Having an up-to-date financial forecast for a ski club is also useful if your trading environment worsens, as the forecast enables you to adjust to your new market conditions and anticipate any potential cash shortfall.
Finally, your ski club's financial projections will also help you secure financing, as banks and investors alike will want to see accurate projections before agreeing to finance your business.
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 ski club financial forecast?
A ski club'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 ski club.
If you are creating (or updating) the forecast of an existing ski club, 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 ski club 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 ski club 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 ski club's financial forecast.
The sales forecast for a ski club
From experience, it is usually best to start creating your ski club financial forecast by your sales forecast.
To create an accurate sales forecast for your ski club, you will have to rely on the data collected in your market research, or if you're running an existing ski 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:
- Weather Conditions: You may see a decrease in the number of monthly transactions during a mild winter with less snowfall, as there may be less demand for skiing and other winter activities.
- Economic Factors: An economic recession or downturn may lead to a decrease in the average price of memberships and packages as people have less disposable income for leisure activities.
- Competition: The presence of a new ski club in the area may affect your average price as you may need to lower prices to stay competitive, or it may lead to a decrease in the number of monthly transactions if customers are drawn to the new club.
- Infrastructure: The condition of your ski slopes and facilities can impact your average price. If they are well-maintained and offer a high-quality experience, you may be able to charge a higher price. On the other hand, if there are issues with the infrastructure, it may lead to a decrease in the number of monthly transactions.
- Demographics: The age and income level of your target market can also affect your average price. For example, if your ski club caters primarily to families with young children, you may need to offer more affordable packages to attract and retain 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.
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The operating expenses for a ski club
Once you know what level of sales you can expect, you can start budgeting the expenses required to operate your ski 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 ski club will include some of the following items:
- Ski instructor salaries: As a ski club, one of your primary expenses will be your staff costs, specifically the salaries of your ski instructors. These individuals are essential to the operation of your club, as they are responsible for teaching and guiding members on the slopes.
- Lift pass fees: In order to access the ski slopes, your club will need to purchase lift passes for each member. These fees will vary depending on the specific ski resort you operate in, but they are a necessary expense for your club to provide a quality skiing experience.
- Equipment rental costs: Not all members may have their own ski equipment, so your club will need to budget for rental costs. This may include skis, boots, poles, and helmets.
- Maintenance and repair costs: Ski equipment, such as skis, boots, and bindings, will need regular maintenance and occasional repairs. This will ensure the safety of your members and the longevity of your equipment.
- Marketing and advertising expenses: In order to attract new members and promote your ski club, you may need to invest in marketing and advertising efforts. This could include creating a website, printing flyers, or running social media ads.
- Utilities: As with any business, your ski club will have utility expenses such as electricity, water, and heating. These costs will vary depending on the size of your club and the location of your facilities.
- Insurance premiums: It is important to protect your ski club and its members by having adequate insurance coverage. This may include liability insurance, property insurance, and worker's compensation insurance for your staff.
- Accounting fees: As a business, you will need to keep track of your finances and file taxes. This may require hiring an accountant or outsourcing your bookkeeping, which will incur additional fees.
- Software licenses: To manage your club's operations and communicate with members, you may need to invest in software licenses for programs such as scheduling, communication, or membership management.
- Rent or lease payments: If your ski club does not own the facilities it operates in, you will need to budget for rent or lease payments. This may also include fees for storage of equipment and supplies.
- Office supplies and equipment: Running a ski club will also require basic office supplies, such as paper, pens, and printer ink. You may also need to invest in office equipment like computers, printers, and scanners.
- Cleaning and maintenance services: To keep your facilities and equipment in top condition, you may need to hire cleaning and maintenance services on a regular basis. This may include janitorial services, snow removal, and landscaping.
- Membership fees: Your club's main source of revenue will likely come from membership fees. These fees may cover the cost of access to the slopes, equipment rental, and other club amenities.
- Food and beverage costs: If your club offers a dining or bar area, you will need to budget for food and beverage costs. This may include purchasing food and drinks, as well as hiring staff to work in the dining area.
- Banking fees: Lastly, your club will likely have banking fees associated with managing your finances, such as transaction fees, overdraft fees, and wire transfer fees.
This list will need to be tailored to the specificities of your ski club, but should offer a good starting point for your budget.
What investments are needed to start or grow a ski club?
Once you have an idea of how much sales you could achieve and what it will cost to run your ski club, it is time to look into the equipment required to launch or expand the activity.
For a ski club, capital expenditures and initial working capital items could include:
- Ski Lifts: As a ski club, you will need to invest in ski lifts to transport your members up the mountain. This will be a significant capital expenditure, but it is essential for providing a safe and enjoyable skiing experience for your members.
- Ski Equipment: Another important capital expenditure for a ski club is purchasing ski equipment. This includes items such as skis, poles, boots, helmets, and goggles. It is crucial to regularly update and maintain your equipment to ensure the safety and satisfaction of your members.
- Snow Grooming Equipment: To maintain your ski slopes, you will need to invest in snow grooming equipment such as snowcats, snowmobiles, and grooming attachments. This equipment is necessary for creating and maintaining smooth and safe skiing conditions for your members.
- Ski Lodge: If your ski club does not already have a lodge, you may need to invest in building or purchasing one. A ski lodge provides a place for your members to gather, relax, and warm up during their ski trips. It can also generate income through rental fees for non-members.
- Ski Shop: As a ski club, you may want to have a ski shop on-site for your members to purchase or rent equipment and gear. This can be a significant source of income for your club, but it will require a capital investment to stock and set up the shop.
Again, this list will need to be adjusted according to the specificities of your ski 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 ski club
The next step in the creation of your financial forecast for your ski 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 ski club?
Now let's have a look at the main output tables of your ski club's financial forecast.
The profit & loss forecast
The forecasted profit & loss statement will enable you to visualise your ski club's expected growth and profitability over the next three to five years.
A financially viable P&L statement for a ski 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 ski 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 ski 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 ski 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 ski 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 ski 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 ski 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 ski club's financial forecast?
Using the right tool or solution will make the creation of your ski club's financial forecast much easier than it sounds. Let’s explore the main options.
Using online financial forecasting software to build your ski 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.
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 ski club 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 ski club's financial forecast?
Creating an accurate and error-free ski club financial forecast on Excel (or any spreadsheet) is very technical and requires both a strong grasp of accounting principles and solid skills in financial modelling.
Most entrepreneurs lack the expertise required to create an accurate financial forecast using spreadsheet software like Excel or Google Sheets. As a result, it is unlikely anyone will trust your numbers.
The second reason is that it is inefficient. Building forecasts on spreadsheets was the only option in the 1990s and early 2000s, nowadays technology has advanced and software can do it much faster and much more accurately.
This is why professional forecasters all use software. With the rise of AI, software is also becoming smarter at helping us detect mistakes in our forecasts and helping us analyse the numbers to make better decisions.
Finally, like everything with spreadsheets, tracking actuals vs. forecasts and updating your forecast as the year progresses is manual, tedious, error-prone, and time-consuming. Whereas financial forecasting 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 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
- A financial forecast shows expected growth, profitability, and cash generation metrics for your ski 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 ski 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
- Financial forecast template for a business idea
- How to project revenues for a business?
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