Cash Flow Forecast Guide for a Dog Walking Business Plan

If you’ve found yourself here, you’re probably starting, or looking at starting a dog walking business.

Although many people view their dog walking as a hobby and do it for fun, the reality is, if money is changing hands, it is still a business.

Now just because it’s a business, that doesn’t necessarily mean you need a cash flow forecast. 

You need one when you’re relying on your dog walking to provide for you financially – there’s a multitude of reasons why a cash flow forecast is useful to a small business, I wrote about 4 of them here. 

In this article, we’ll go over the basic components of a cash flow forecast, providing examples relative to a dog walking business along the way, and then we’ll build up a forecast at the end, step by step.

Let’s get into the basics of creating a cash flow forecast for a dog walking business or startup.

Where to start?

If you Google “cash flow statement/forecast” and head to images, things will look complex, lines upon lines of numbers, enough to put anyone off!

But in reality, once you break it down, things start to get less complex. 

In fact, a cash flow boils down to 4 main ingredients:

  1. The length of time you’ll forecast for
  2. How much your costs are
  3. How many sales you’ll make
  4. When you will receive payment

So let’s dive a bit deeper into each of these and work them out.

Length of forecast

At a minimum, you’ll need a forecast that lasts 12 months. You can go further and gain valuable insight into how and when you might grow your business, but, be aware that the further you go, the more uncertain your forecast becomes. 

The length also depends on your industry, a software company that takes longer to get to the right audience and subsequently longer to go-to-market, should have a longer forecast to allow for this. 

For a dog walking business I’d recommend going for a 1-2 year forecast, this is because it’s easily understood, can go-to-market quickly and costs remain relatively stable.

But it really depends on what you want to achieve out of your business, if you’re looking for growth, then a longer forecast will help you strategise. It can help you estimate when you’re likely to be profitable and have enough surplus cash to invest back into the business.

If you’re not too fussed about growing outside your local area, then a 12 month forecast will likely suffice.

Think about what you want to achieve from your business, and this will inform how long your forecast should be, once you’ve decided your length of forecast, you’ll need to…

List your costs

This is super important for understanding the total amount of money you’ll need when starting out, and following that, how much you’ll need monthly to keep yourself afloat.

Below is a list of some common startup costs for dog walking businesses. Remember, startup costs are one-off costs that are designed to get you off the ground – they are not recurring costs that appear monthly or annually.

Common startup costs for a dog walking business:

  • Transport for your dogs – typically a van.
  • Crates
  • Leads
  • Bowls
  • Training & Accreditation courses

Note all these down along with their estimated cost or actual cost, if you know.

For example, my startup costs for a dog walking business looks like this:

  • Van = £5000
  • Bowls (x8) = £80
  • Leads (x8) = £80
  • Toys (x8) = £40
  • Crates (x8) = £400

Costs of sales

Costs of sales are any costs that occur when you’re selling your product. For example, in a dog walking business, this could be petrol, dog treats etc.

Luckily when you’re running a dog walking business, costs of sales can stay pretty low, there’s not much to have to pay out of pocket for.

So per walking session, it costs me £0.5 per dog.

Write this down too, but remember, as your business grows, these costs will too. 

Operational Costs

Operational costs are any costs that occur to keep your business running.

So this could be:

  • Marketing
  • Insurance
  • Annual memberships
  • Licenses that need renewing

For example, my dog walking business runs these costs on either a monthly or annual basis.

  • Social media promotion = £25 (PCM)
  • Leaflets and other print media = £50 (PCM)
  • Insurance, paid annually = £73.59 (PA)
  • Accreditation = £199 (PA)
  • National Association of Pet Sitters & Dog Walkers (NARPS) membership = £25 (PA)

Now you might be tempted to leave out marketing at this stage, as it’s expensive when you add it up over the course of the year. But never forget that without customers, you won’t make money! 

Marketing can be done relatively cheap, but it is time-intensive, depending on how much time you have, you should consider which route is right for you.

Big annual costs often catch people out, so it’s good to know when these will come out so you can prepare your finances accordingly.

Forecasting your sales & when you’ll receive payments

Perhaps the trickiest part of creating a cash flow forecast is estimating your sales. The reason for this is, entrepreneurs are, by nature, optimists, it’s all too easy to overestimate how well you’ll do when you first start out.

You’re unlikely to be walking dogs at your full capacity immediately. It’s more likely to be 20%-40% of your capacity.

The timing of payments is also crucial – will you have enough to cover your costs if a customer pays late? Or what if you receive your payments from all customers on a specific date of the month? Do you need to juggle your bills to ensure you can pay them? 

Understanding when you’ll be paid is necessary for understanding if you’ll need to source more cash to run your business whilst you’re waiting to be paid.

The first step in forecasting your sales is breaking down your product offerings. 

For my dog walking business, I’ve got 3 different product offerings.

The first is a group walk. I charge this at £12 (£10+20% VAT) a walk and will run two sessions a day.

An early morning session and a late morning session. I take 4 dogs per walk.

I offer this Monday – Friday and expect that initially I’ll only be taking 2 dogs per walk for the first 3 months, until my customer base grows.

My customers pay me at the end of each day for each walk.

So for the first 3 months, I’ll be taking £48 a day, 5 days a week from the group walks.

This gives me an income of £240 a week.

In “units” (each walk is classed as a unit, the same way if you sold t-shirts, each shirt would be a unit) that is 90 units a month (20 x 4.5).

My other 2 offerings are:

1-1 walks, which I run on the weekends, charged at £25 a walk. I expect to sell 4 of these a month for the first 3 months.

My second offering is dog boarding, which I run 7 days a week, charged at £30 per dog, per night.  I expect to sell 10 of these a month for the first 3 months.

Ultimately, the sales forecast and timing of payments are perhaps the most important part of building your cash flow forecast, as they form the foundation of whether you’ll actually be able to stay afloat.

Building your forecast

So hopefully throughout this article you’ve been noting down your expected costs and sales, as well as taking note of the timing of payments – you’ll need this now!

Now for this section I’ll be building a plan in Brixx and breaking it down step by step – you can follow along by starting a free trial, (don’t worry, no credit cards!) or you can download any of our Excel & Google Sheets templates here.

Section 1: Setting up your plan

When I start a new plan in Brixx, I’m given this screen.

I’ve set my plan length to 3 years, I have VAT turned on and my currency is GBP.

It’s as simple as that – l now hit “create plan”.

Section 2: Income

Now as I stated earlier, I’ve got 3 different product offerings:

In the above screenshot, you can see my structure, the red circles indicate my cost of sales for that product offering.

The first is a group walk: at £12 (£10+20% VAT) a walk and will run two sessions a day.

An early morning and a late morning session.

I offer this Monday – Friday and expect that initially I’ll only be taking 2 dogs per walk for the first 3 months.

My customers pay me at the end of each day for each walk.

So for the first 3 months, I’ll be taking £48 a day, 5 days a week from the group walks.

This gives me an income of £240 a week.

In “units” (each walk is classed as a unit, the same way if you sold t-shirts, each shirt would be a unit) that is 90 units a month (20 x 4.5).

So I’ll enter this into my plan.

We can now save and close this. 

My other 2 offerings are:

1-1 walks, which I run on the weekends, charged at £25 a walk. I expect to sell 4 of these a month for the first 3 months.

I’ll enter this into my plan…

My second offering is dog boarding, which I run 7 days a week, charged at £30 per dog, per night.  I expect to sell 10 of these a month for the first 3 months.

Costs of sales

For a group walk and 1-1 walks, I don’t have any direct costs of sales except petrol for my van.

This is a negligible cost and as I walk locally, I only need to fill up once a month, this costs me, on average, £50 a month.

So we’ll add this as a linked cost of sale to the group walk component in Brixx.

My boarding does have some linked costs of sales. I need to provide food for the dogs. This costs £2.00 per dog, per night. 

I enter this as a cost per unit sold, meaning that as I alter my forecast to predict higher or lower sales this cost will rise and fall along with those sales.

That’s my income and cost of sales sorted, next we need to add our assets and other startup costs.

Section 3: Assets

Earlier I listed some assets that would be typical to a dog walking business, I also listed some of my costs for these:.

  • Van = £5000
  • Bowls (x8) = £80
  • Leads (x8) = £80
  • Toys (x8) = £40
  • Crates (x8) = £400

Typically assets will depreciate over time, this is where your assets lose value due to wear and tear but for items under £100 they’re not subject to depreciation as much.

For my bowls, leads and toys I’ll bundle these together under “misc items” as the cost for each of these was low and doesn’t warrant each having their own component. The total cost of all these was £200.

So let’s add these assets to our financial plan.

You can see that I’ve now got quite a hefty upfront cost on my cash flow, so perhaps I might pay for that van with a personal loan, paying back over 36 months.

In Brixx, I’ll add a new component in the funding section.

I’m entering this as a loan, for £5000 to be paid evenly over 36 months, with an annual interest rate of 7.5%.

We can see here that I’ve now got £5000 to cover the cost of the van, but I am paying £138.89 back each month.

Now we’re on to the final piece of the puzzle, which is our other startup costs, which we’ll add now.

Section 4: Other startup costs / Operational Costs

Let’s bring back my list of other/operational startup costs: 

My dog walking business runs these costs on either a monthly or annual basis.

  • Monthly social media promotion = £25 (PCM)
  • Leaflets and other print media = £50 (PCM
  • Insurance = £73.59 (PCM)
  • Accreditation = £199 (P/A)
  • NARPS membership = £25 (P/A)

I’ll go ahead and add these to my plans setting each up to either occur annually or monthly.

My cash flow now looks like this:

Now we’ve got our cash flow complete, you might want to create a nice visual chart to track your cash flow over time. Seeing your cash flow visualised helps you spot cash shortfalls much easier than rows upon rows of numbers!

Luckily Brixx does this all for me, but if you’re using a spreadsheet you can create a chart with closing bank position and months on a separate axis. 

Here’s what mine looks like:

All done, but not for good!

That’s it! Cash flow ticked off, never to be returned to. At least this is how many people view their cash flow forecast, but this shouldn’t be viewed as something you’ve got to do, it should be something you want to do!

Hopefully, we’ve made it crystal clear how useful a cash flow forecast can be to your business, returning to it bi-weekly or at least monthly is a great idea.

You can even reveal another report column in Brixx and start tracking your actual performance vs your forecast, helping you keep track of how you’re doing, spotting the source of problems quickly.

If you need further help creating a forecast, or you think you’re ready to move on to the balance sheet and profit and loss, here’s some helpful articles to get you started:

A beginners guide to the profit and loss forecast

A beginners guide to the balance sheet forecast

A beginners guide to forecasting business’ cash flow for startup

Leave a Reply

Your email address will not be published. Required fields are marked *