How to create a financial forecast for a student residence?

Developing and maintaining an up-to-date financial forecast for your student residence 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 student residence 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 student residence?
The financial projections for your student residence 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 student residence'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 used as input to build a student residence financial forecast?
A student residence'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 student residence, 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 student residence 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 student residence 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 student residence's financial forecast.
The sales forecast for a student residence
The sales forecast, also called topline projection, is normally where you will start when building your student residence 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 student residences), and consider the elements below:
- Location: The location of your student residence can greatly impact the average price and number of monthly transactions. A residence located in a popular and convenient area for students can demand a higher price and attract more monthly transactions compared to a residence in a less desirable location.
- Student population: The number of students enrolled in nearby universities or colleges can affect the demand for your residence. A higher student population can lead to more monthly transactions and potentially allow you to charge a higher average price.
- Quality of amenities: The amenities offered at your residence can also impact the average price and number of monthly transactions. Students are often willing to pay more for a residence with desirable amenities such as a gym, study rooms, or a pool.
- Competition: The number of other student residences in the area can also affect your business. If there is a high level of competition, you may need to adjust your average price to stay competitive and attract monthly transactions.
- Public transportation: Easy access to public transportation can be a major selling point for students. If your residence is located near bus or subway stops, it may attract more monthly transactions and allow you to charge a higher average price.
After the sales forecast comes the operating expenses budget, which we will now look into in more detail.
Need a convincing business plan?
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The operating expenses for a student residence
The next step is to estimate the expenses needed to run your student residence 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 student residence's operating expenses should include the following items at a minimum:
- Staff costs: This includes salaries and wages for all staff members, including resident assistants, maintenance workers, and administrative staff.
- Accountancy fees: You will need to hire an accountant to handle financial matters and ensure that taxes are filed correctly.
- Insurance costs: It is important to have proper insurance coverage for the residence, including liability insurance and property insurance.
- Software licences: In order to efficiently manage operations, you may need to purchase software licences for tasks such as accounting, scheduling, and communication.
- Banking fees: You will likely encounter banking fees for transactions such as depositing rent payments and paying bills.
- Utilities: This includes expenses for electricity, water, gas, and other utilities necessary for running the residence.
- Maintenance and repairs: Regular maintenance and occasional repairs are necessary to keep the residence in good condition for your students.
- Cleaning supplies: You will need to purchase cleaning supplies to keep common areas and student rooms clean and sanitary.
- Marketing and advertising: To attract new students and promote your residence, you may need to invest in marketing and advertising efforts.
- Security: Safety and security measures, such as surveillance systems and security personnel, are important for the well-being of your students.
- Furniture and furnishings: You may need to purchase furniture and furnishings for common areas and student rooms.
- Food and dining: If your residence offers dining options, you will need to budget for food expenses.
- Internet and phone: In today's digital age, internet and phone services are essential for students, and you will need to cover these expenses.
- Student programming and activities: It is important to provide social and educational opportunities for your students, so budget for expenses related to programming and activities.
- Cleaning and landscaping services: If you do not have the resources to handle cleaning and landscaping yourself, budget for hiring outside services.
This list is, of course, not exhaustive, and you'll have to adapt it according to your precise business model and size. A small student residence might not have the same level of expenditure as a larger one, for example.
What investments are needed to start or grow a student residence?
Your student residence 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 student residence, these could include:
- Furniture: This includes items such as beds, desks, chairs, and dressers for student rooms. These are necessary for students to have a comfortable living and studying space.
- Appliances: Students will need access to appliances like refrigerators, microwaves, and stoves in common areas or in their individual rooms. These are essential for daily living and cooking meals.
- Technology: In today's digital age, it is important for student residences to have the necessary technology for students to study and stay connected. This can include items such as computers, printers, and WiFi equipment.
- Security Systems: Safety is a top priority in student residences. Investing in security systems such as cameras, door locks, and alarms can provide peace of mind for both students and staff.
- Renovations/Upgrades: Over time, student residences may need renovations or upgrades to maintain a safe and comfortable living environment. This can include things like new flooring, paint, or updated fixtures.
Again, this list will need to be adjusted according to the size and ambitions of your student residence.
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 student residence
The next step in the creation of your financial forecast for your student residence 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 student residence?
Now let's have a look at the main output tables of your student residence's financial forecast.
The profit & loss forecast
The forecasted profit & loss statement will enable you to visualise your student residence's expected growth and profitability over the next three to five years.

A financially viable P&L statement for a student residence 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 student residence'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 student residence. 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 forecast
Your student residence's cash flow forecast shows how much cash your business is expected to consume or generate in the years to come.

It is best practice to organise the cash flow forecast by nature to better explain where cash is used or generated by the student residence:
- Operating cash flow: shows how much cash is generated by the operating activities
- Investing cash flow: shows how much will be invested in capital expenditure to maintain or expand the business
- Financing cash flow: shows if the business is raising new capital or repaying financiers (debt repayment, dividends)
Keeping an eye on (and regularly updating) your student residence's cash flow forecast is key to ensuring that your business has sufficient liquidity to operate normally and to detect financing requirements as early as possible.
If you are trying to raise capital, you will normally be asked to provide a monthly cash flow forecast in your student residence's financial plan - so that banks or investors can assess seasonal variation and ensure your business 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 student residence's financial forecast?
Using the right tool or solution will make the creation of your student residence's financial forecast much easier than it sounds. Let’s explore the main options.
Using online financial projection software to build your student residence'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.
Hiring a financial consultant or chartered accountant
Hiring a consultant or chartered accountant is also an efficient way to get a professional student residence 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 student residence's financial forecast?
Creating an accurate and error-free student residence 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 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 student residence, 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 student residence.
- 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 student residence. 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?
- Sample financial forecast for business idea
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