Offering more training sessions isn’t always the best way to make money
Contrary to the popular belief, offering more training sessions isn’t always the best way to make money. It can lead to an array of problems and burn out your coaches. So how can you make more money at your sports club when you can’t possibly take on more athletes? Let’s explore at least 3 ways you can do this – you may be surprised to find that you’ve been leaving money on the table.
Increase sales per family
We’re going to find you close to an extra £10k/year just in this section. One way to increase income is to focus on bringing in more money per person.
First, a little housekeeping. Do you track the amount of money you make per family? It makes sense to first make sure you’re keeping that information somewhere. If you haven’t been, get out a notebook or make a simple spreadsheet and get started now.
1. Club Success Packs
So, how can you increase the products you sell to families? Most clubs have items like water bottles, sweatbands, club t-shirts, and hats lying around on a shelf that don’t sell. With no mention of them by coaches, families get used to walking right by them each day. Why not try something new?
Try creating something you can take pre-orders for such as, “Club Success Packs”. By designing an opportunity to take orders through email or the LoveAdmin app, you can have these packs ready for families when they come back. It’s easy to order drawstring bags with your club’s logo, pack a small hand sanitizer, water bottle, hat, etc. Taking these orders ahead of time means you can sell small items and not worry about having inventory left over.
Example – A Club Success Pack is priced at £20. A club with 200 children has 50 families that want to purchase a pack. That’s an extra £1,000.
2. Club Family Calendar
Clubs often forget that they can serve the whole family. Why not create a “Club Family Calendar” with some fun opportunities for athlete & parent sessions, bring-a-sibling-to-training day, or dress like your favourite coach day? Themed days are great fun for everyone involved and you can ask for donations.
Example – An extra athlete & parent session per month is priced at £15. A club with 200 children has 20 families that sign up for the session each month. That’s an extra £300/month and £3,600/year.
3. Increase prices
We know – price increases are scary so let’s slow down and break it down. The world costs more money each year just to live. We have inflation. You are given increases in prices from our vendors. It costs you more to run your club every year without fail. So, if you don’t increase prices each year to match that cost then you’re losing money.
If you consistently raise prices 1%-3% each year, families will get used to the increases and never bat an eye over an increase of a pound or two per month. If we run numbers on that, here’s what that could mean:
Example – Current training price is £40 per month. Sports Club X has 200 athletes. Current revenue=£8,000/mo. 12-month income is £96k.
With a generous price increase of 5%, that gives Sports Club X an extra £400 per month. That’s an increase of £4,800 per year for an increase of £2 per month, per family.
A 2%-5% increase is an amount that is likely to go unnoticed for the family but will make a big impact on your bottom line, as you can see.
Want even more ideas for finding cash at your club? Here are two more:
Sell profitable sessions
This seems to be common sense advice but many clubs don’t know how much it costs to run their training sessions. It’s important for you to know the costs associated with coaches for each session as well as any other direct costs. Then, you can figure out what your profit margin is per session. That is, which sessions make the most amount of money and which ones cost you the most.
Here’s a quick and simple way to find a rough profit margin per session:
Session profit margin = total money session brings in – coaching costs/total money session brings in
Let’s say this is a monthly session. You can find your profit margin per session by first subtracting the total coaching costs (plus and any other directly attributable costs) from the total monthly income from that session. Then, divide that total again by the total amount of income from the session.
Example – £800 monthly income from the Monday 17:00-18:00 session. It costs you £200 per month to run the session. £600/£800= 75% profit margin.
Moreover, you want to concentrate on filling the sessions with the highest profit margins and then replicating those. You want to minimize the amount of time and resources you spend on the sessions with the lowest profit margins. Are your profit margins healthy? Are you making money per session or do you have any sessions that are actually losing money for your club?
Another way to increase profit margins without increasing prices is to cut expenses. Often clubs forget about giving budgets a review both at a high level and a low level.
Examining direct costs in a service-based business like a club usually means looking at salaries and wages (costs you can specifically assign to a session). However, having the least expensive wage base isn’t the goal. You want to reward your great coaches and give them the pay rises they deserve. So, what other costs affect overall profit margins?
Don’t forget about indirect costs or the things that you purchase for the good of the club. Sometimes you’re still paying for subscriptions you don’t use anymore. When was the last time you asked for a more competitive insurance premium? Do you have any miscellaneous items on your budget?
Use your coaches to brainstorm ways to cut costs. They often see things from the ground level that a club owner may overlook or not use on a day to day basis. There are often opportunities to cross-train coaches on new jobs and tasks that could free up needs to bring in a whole new person (i.e. spending hours on payroll).
There’s never been a better time than now to give your sports club’s operations an audit. There are so many ways to pull levers to produce more income. Sit down with your numbers, some patience, a positive attitude, and get started!
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