Do you struggle to build a budget that accurately reflects the dynamic realities of running a ski area? Do you often find that your actual expenses deviate substantially from budget? Do you find it challenging to accurately budget revenue for each profit center? Is your budget too narrow to capture the whole financial picture of a ski area operation? Is the budgeting process frustrating or daunting for you? Does budgeting take too much time? Do you take shortcuts when budgeting because you have more pressing and important things to do? Do you wish budgeting was simple yet granular, and as accurate as possible?

If you answered “yes” to any of those questions, it’s probably time to freshen up your entire budgeting mindset and model!

But first, welcome to SlopeStrategics Insights! These little Insights are designed to provide you with some actionable, useful information and ideas, and trigger some critical thinking, while also letting you know a few of the many areas in which we’re ready and willing to help you achieve peak performance if you wish to dig deeper with us.

Right. Back to budgeting. Over several decades of ski resort budgeting, we’ve learned that it is possible to craft a reliable financial plan. Does that mean it’s always perfect? Of course not. A budget is only as good as the variables put in, and the realities of the particular season and fiscal year. A budget remains a guide, but it still should be the most accurate guide possible. We’ve learned a few tricks along the way that really help dial it in.

The basic idea is to build a multi-line rollup budget model. What does that look like? It looks like budgeting granularly, department-by-department, outlet by outlet, each with its own daily revenue and expense worksheet – yes, we said daily. There’s a worksheet and calculator for FTYR salaried roles. And there’s a worksheet for daily forecasted skier visits. Calculations happen between and among all of these worksheets. Formulas then “roll up” this data into a both a detailed and summary P&L budget. Items like PTO and bonus accrual are automatically calculated. If you really want to get detailed, coefficients can be added by formula for months that have higher or lower yields than other.

A vertical analysis gives a snapshot of operating and net profit at a glance. The model builds a matching cash flow forecast. You have all the tools to track performance-to-budget.

The beauty of this model is that once the master workbook model is built, the annual operating budget process is really as simple as entering estimated yield per visit for each revenue department, updating salary and wage information for the upcoming budget year, and entering prior-year skier visits with a single-entry for forecasted increase or decrease of visitation. Voila. New year, new budget, down to the day.

There are still some items that need to be adjusted or entered manually, such as budgeted operating supplies, fuel and utility costs, etc. But by approaching it with a formula-driven rollup model, you can knock out about 85% of it in an hour. Take as much time as you choose for the rest!

Sound useful? If you have an Excel and financial wizz on your team, share this Insight with them and see what they can come up with. Or, give us a shout and we’d love to help you build your budget model. Whether your host 10,000 skier visits or 500,000, detailed & accurate budgets aren’t just for the “big guys.” We can help you achieve peak performance with a budget model that works for you.

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