How to create a financial forecast for an aquarium center?
Developing and maintaining an up-to-date financial forecast for your aquarium center is key in order to maintain visibility on your business’s future cash flows.
If you feel overwhelmed at the thought of putting together an aquarium center 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 an aquarium center?
Creating and maintaining an up-to-date financial forecast is the only way to steer the development of your aquarium center and ensure that it can be financially viable in the years to come.
A financial plan for an aquarium center 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 aquarium center 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 aquarium center'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 needed to build an aquarium center 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 an aquarium center, 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 aquarium center 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 aquarium center, 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 aquarium center's financial forecast.
The sales forecast for an aquarium center
From experience, it is usually best to start creating your aquarium center financial forecast by your sales forecast.
To create an accurate sales forecast for your aquarium center, you will have to rely on the data collected in your market research, or if you're running an existing aquarium center, 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:
- Seasonal Demand: As an aquarium center, your sales may be affected by the demand for aquarium animals and accessories during different seasons. For example, there may be a higher demand for fish and plants during the summer months when more people are setting up new aquariums.
- Competition: The presence of other aquarium centers in your area can impact your average price and number of monthly transactions. If there are several competitors offering similar products and services, you may need to adjust your prices or offer promotions to stay competitive.
- Trends in Aquarium Designs: Changes in popular aquarium designs and styles can also affect your sales. For instance, if there is a new trend of creating planted aquariums, you may see an increase in sales of plants and related products.
- Local Events: Local events such as aquarium conventions or trade shows can also impact your sales forecast. These events can attract a large number of potential customers and lead to an increase in transactions during and after the event.
- Availability of Rare Species: If your aquarium center specializes in rare or exotic species of fish or other aquatic animals, the availability of these species can greatly affect your sales. If there is a limited supply of a certain species, you may be able to charge a higher price and see an increase in transactions when they are in stock.
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 an aquarium center
Once you know what level of sales you can expect, you can start budgeting the expenses required to operate your aquarium center 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 an aquarium center will include some of the following items:
- Staff costs: This includes the salaries and benefits for all employees working at the aquarium center, including management, maintenance staff, and customer service representatives.
- Accountancy fees: You will need to hire an accountant to help you manage your finances and ensure that your books are accurate and up-to-date.
- Insurance costs: It is important to have insurance coverage for your aquarium center to protect against any potential accidents or damages.
- Software licenses: You may need to purchase software licenses for programs such as accounting, inventory management, and customer relationship management.
- Banking fees: This includes fees for maintaining a business bank account, wire transfer fees, and transaction fees for credit card payments.
- Rent/mortgage: If you do not own the building where your aquarium center is located, you will need to pay rent or a mortgage.
- Utilities: This includes expenses for electricity, water, and gas for your aquarium center.
- Marketing and advertising: You will need to allocate a budget for marketing and advertising efforts to attract customers to your aquarium center.
- Supplies and inventory: This includes the cost of purchasing fish, food, decorations, and other supplies for your aquarium center.
- Maintenance and repairs: You will need to budget for regular maintenance and any unexpected repairs for your aquarium tanks, filters, and other equipment.
- Training and development: It is important to invest in training and development for your employees to ensure they have the necessary skills to provide excellent customer service and care for the aquarium animals.
- Professional services: You may need to hire outside professionals such as lawyers or consultants for specific tasks or projects.
- Taxes and licenses: You will need to pay taxes and obtain necessary licenses and permits to operate your aquarium center.
- Office supplies: This includes expenses for paper, ink, pens, and other office supplies needed to run your aquarium center.
- Security: It is important to invest in security measures to protect your aquarium center and the animals within it.
This list will need to be tailored to the specificities of your aquarium center, but should offer a good starting point for your budget.
What investments are needed to start or grow an aquarium center?
Your aquarium center 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 an aquarium center, these could include:
- Aquarium tanks and equipment: This includes the cost of purchasing and installing tanks, filtration systems, lighting systems, and other necessary equipment for the aquarium center.
- Aquatic animals: The cost of purchasing and maintaining various species of fish, invertebrates, and other aquatic animals is a major capital expenditure for an aquarium center. This may also include the cost of special tanks or habitats for specific species.
- Aquarium decorations and supplies: To create an attractive and engaging environment for visitors, an aquarium center may invest in decorations such as artificial plants, rocks, and other underwater scenery. Additionally, supplies such as food, water treatments, and cleaning supplies are necessary for the proper care of the aquarium and its inhabitants.
- Education and interactive exhibits: Many aquarium centers offer educational programs and interactive exhibits to teach visitors about the aquatic world. These may include touch tanks, educational displays, and interactive games. The cost of developing and maintaining these exhibits is a significant capital expenditure for an aquarium center.
- Retail and gift shop inventory: Many aquarium centers have a retail or gift shop where visitors can purchase souvenirs and educational materials. The cost of purchasing and stocking inventory for these shops is a necessary capital expenditure to generate revenue for the aquarium center.
Again, this list will need to be adjusted according to the size and ambitions of your aquarium center.
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 aquarium center
The next step in the creation of your financial forecast for your aquarium center 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 an aquarium center?
Now let's have a look at the main output tables of your aquarium center's financial forecast.
The profit & loss forecast
The forecasted profit & loss statement will enable you to visualise your aquarium center's expected growth and profitability over the next three to five years.
A financially viable P&L statement for an aquarium center 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
Your aquarium center'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 cash flow forecast
Your aquarium center'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 aquarium center:
- 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 aquarium center'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 aquarium center'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 aquarium center's financial forecast?
Creating your aquarium center's financial forecast may sound fairly daunting, but the good news is that there are several ways to go about it.
Using online financial projection software to build your aquarium center'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 aquarium center 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 aquarium center's financial forecast?
Creating an accurate and error-free aquarium center 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 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 aquarium center, 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 aquarium center
Takeaways
- A financial forecast shows expected growth, profitability, and cash generation metrics for your aquarium center.
- 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 an aquarium center. 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 create a sales forecast for a business?
- Financial forecast template for a business idea
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Founder & CEO at The Business Plan Shop Ltd
