Step 3: Will It Pencil Out?
Now that you have a better understanding of income potential and a feel for historical production swings in your chosen fishery, "pencil out" your proposed start-up and operating costs against different income projections.
Alaska Sea Grant has a spreadsheet that can help.
Alaska Sea Grant has developed an Excel spreadsheet designed specifically for Alaska fishing operations (Note: you need Microsoft Excel).
"Back of the envelope" cost estimating is a good business way-of-thinking. As a new entrant, run the spreadsheet to project your annual fixed and variable costs. You will also need a separate budget for first-year start up costs such as gear or safety equipment. All of these will help you talk with a lender in a more realistic way—see the Step 4: Financing page on this website.
Remember, these are only estimations; these calculations are not a substitute for long-term business planning and conversations with a skipper already in your fishery, or your lender, family, CPA and others on your business team.
Resources
Use this Excel workbook to analyze various “what-if” scenarios in your fishing business. Enter predicted fuel, bait, gear, moorage, crew, and insurance costs and see how each changes your bottom line. You can look at the impact of different loan interest rates, or targeting different salmon species, or adjusting your days at sea.
The workbook consists of 8 linked worksheets. The one titled “Main Sheet” is your final product. The other 7 sheets, automatically linked to the main sheet, are where you enter information in the input fields outlined in green. Click to enable macros when opening.
Use the series of videos produced by Greg Fisk and the University of Minnesota to learn how to work with financial spreadsheets.
Instructions for using the Pro Forma Fishing Vessel Operational Analysis workbook.