Sports Management and Finance
Being a sports manager requires an understanding of all aspects of the industry and facility you are working for. This includes the financial side of things. Being able to manage a successful fitness facility requires a sharp set of budgeting skills that have been honed to not only facilitate the survival of a business but also to ensure its growth.
To do this, the business’s finances need to represent a well-oiled machine that is characterised by a healthy cash flow, sustainability, and growth.
In this regard, facility managers and sports managers need to hold a number of financial management skills aimed at:
- Maintaining cash flow,
- Understanding the financial requirements of the facility and its undertakings,
- Understanding where available funds are best spent, as well as
- Compiling accurate, detailed reports on the financial activities of the facility.
Let’s explore each of these crucial skills in more detail.
Managing the finances of a sports club
Why does a sports administrator need a good financial management system?
For your business to be successful, not only is it vital to turn a profit but – at the same time – you need to have a healthy cash flow so that you have enough money to pay your staff members, replace sporting equipment when you need to or perform general maintenance around the sports club.
A good financial management system will help sports administrators focus on the bigger picture that they want to accomplish for their sports club. In addition, managing a sports club’s finances well will ensure that there is enough cash to meet daily financial objectives.
Budgeting Skills
Maintaining Cash Flow
Cash flow is the life blood of any business. The most successful businesses manage their cash flows as an intricate ecosystem and maintain a careful balance between funds coming into the business and funds being spent.
In terms of fitness facilities, or even personal training businesses of all sizes, budgeting correctly for the flow of cash is a continual, monthly cycle.
Cash comes in from customers or clients or, in some cases, from allocated funds. This may come in the form of membership fees, accounts received or once off-payments. It’s largely dependent on the costing model of the business.
The cycle of cash flow also necessitates that money is going out of the business since each operation comes with its own set of expenses. Consider the cost of the premises, employees, power and water, maintenance, and mortgages to name a few.
Maintaining optimal cash flow means being able to keep your finger on the pulse of everything that is coming in, as well as everything that is going out, and working to maintain a favourable ratio of profit to expenditure.
Financial Requirements for Projects and Facilities
Sporting facilities have a diverse and extensive list of requirements that are largely dependent on their type, their operations and their scale.
Gyms, for example, have different financial needs to country clubs and golf courses which in turn have demands that differ to football stadiums. It’s all relative to the type of institution and the purpose that they serve.
For each of these facilities, there are a number of costs. There are the:
- Short-term costs for daily tasks;
- Long-term costs such as maintenance, expansion, insurance, and the like; as well as
- Cost of events or activities, if you are running the type of facility that hosts or organises fitness events.
The diverse financial challenges that face fitness facilities make sports management a fairly intricate affair where budgeting is concerned. Practitioners and consultants need to be fairly adaptable while still holding a sound understanding of the financial requirements of the fitness industry as a whole, as well as their specific facility or business.
Maintaining an Economic Enterprise
Maintaining an economic enterprise means not only knowing where the business is spending its money but also understanding where it should and shouldn’t be spending it.
That doesn’t mean that both costs and corners should be cut at every turn, but rather that an understanding should be fostered of where expenses are enhancing and supporting your business and where they are simply taking away from it.
Being able to draw accurate and realistic budgets that take into account the most beneficial costs of the business, while eliminating the unnecessary ones, is an essential part of maintaining cash flow and enabling the growth and sustainability of the business
It also allows you to offer your clients added value by focusing your costs and bettering your facility.
Accurate Reporting
Being able to collate information about the gains and expenses of a facility is an essential skill for sports managers. Generally speaking, there are stakeholders involved on a financial level who expect transparency in terms of the finances of the business.
This means that sports managers need to be able to create accurate and understandable reports regarding the facility’s budget and how closely the business has stayed within its confines throughout its operations.
Here are some tips to help you plan and control your finances at your sporting facility better:
- Avoid investing too much money in fixed assets, for example, office equipment. So, if you only need one printer, don’t buy two!
- Maintain short-term working capital needs to support accounts receivable and inventory more efficiently. Make sure that you always have available funds to, for example, pay your staff members or the repair guy who you’ve called to fix a tear in the shade cloth in your sports club parking lot.
- Set sales goals. You need to be growth-oriented as opposed to being just an order taker. Instead of just accepting membership dues when people want to sign up to your sports club, go out and actively promote your club so that you can drum up sign-ups. For example, start a Facebook campaign where you can target an audience of people who live and work around your sports club and make signing up for your club irresistible.
- Operate your business more efficiently by keeping sales as well as general and administrative expenses low. Do you find that your box of printer paper isn’t lasting a week when you’ve only budgeted for one box a month? Why not encourage people to recycle paper for their personal printing and only use new paper when they are printing for a client.
- Perform tax planning. If not planned for correctly, the taxman can take a whopping chunk out of your earnings in penalties if you don’t declare your tax correctly. Avoid this by hiring a tax consultant who will make sure that you have the taxes for your sports club covered.
These are some tips that you, as a sports administrator, can follow to manage your finances correctly.
If you want to become a world-class sports administrator sign up for Trifocus Fitness Academy’s Sports Administration Course. Course modules include:
- Apply administrative skills and knowledge to a sporting environment
- Apply professional values and ethics to your chosen sports club
- Explain what the term ‘sports-related’ multi-disciplinary team means
Contact Trifocus Fitness Academy
Want to learn more? Take an online sports management course through the Trifocus Fitness Academy. Enrol today by visiting our website where you can also find detailed information about our extensive collection of internationally accredited fitness courses.