Why Sports Facilities Fail and How to Make Them Successful Instead
As a scheduling and facility management solution provider, we talk regularly with owners of small sports facilities. Unfortunately, we know there can be high turnover rate with new facilities. Many just don’t stay open more than a few years. So, how do you obtain sports facility success?
Sports facility success takes much more than a passion for sports instruction. Passion can make you a great coach, but it has little to do with being a great business owner. Being a great business owner is all about managing your resources and your cash flow.
Here are some of the biggest factors that lead to the closure of sports facilities, and how you can avoid them:
No guaranteed income
You can meet quarterly or monthly financial goals much easier if you can depend on regular revenue. That’s why it is a good idea for sports facilities to create long-term relationships with their clients. Doing so saves your clients money, makes payment more convenient for everyone involved, and guarantees regular cash flow for your business.
Failing to promote automatic membership renewal can leave you worrying about short-term cashflow and long-term viability. That means you can’t plan with confidence.
Not collecting upfront payment
Some facilities operate on an invoicing system and bill their clients only after their services. Others allow clients to reserve time at the facility for free, and expect payment at the time of their session. Both practices leave you at the risk for late cancellations and no-shows, which can drain up to 13% of your potential revenue. Or, in worst-case scenarios, you may never get paid for those services at all.
Most of your clients will understand that paying for their time upfront is a reasonable request for you to make. They’ll make the payment to ensure they get the time they’re looking for.
Relying on rentals alone
Rentals can be great for getting new clients into your facility, and they can be great when they’re sold as part of a membership with monthly payments (see #1 about guaranteeing recurring revenue).
However, rentals are the least profitable programming option for your space. In particular, renting space to instructors who want to use it for lessons can cut you out of getting the contact information for their students – that’s valuable marketing data – and it can leave you legally accountable for students who don’t have a verified facility waiver on file.
Allowing instructors to control everything about their lessons gives them a big advantage. This is doubly true if you’re not expecting the instructors to pay for the space upfront (see #2).
Plan to be successful instead
eSoft Planner was built around the sound business concepts of upfront payments and establishing recurring revenue. Sports facility owners often don’t think that they can charge more or in advance for their services because it’s not what their customers are used to.
Our software solution makes it easy for you to build your business this way and to set expectations among your customers from the beginning that this is how they do business with you. It’s best to establish consistent rules and standards that your clients will come to expect, whether you’re just starting out or have owned your sports facility for many years.