How to Outlast Your Competition in a Sports Business
A common statistic asserted by economists and entrepreneurs alike is that the key to a successful business is just surviving the first two years… and then, somehow, you’ll be fine. While it is true that ninety-five percent of businesses fail in the first couple years, that is a dangerous oversight. Starting out right is absolutely critical but it is also short-sighted to have such a limited goal. The truth is, even if a business makes it past year two, only about four percent of businesses make it to ten years – and that is an overall statistic. It can be even harder for sports-based businesses. I’ve seen so many open their doors, only to close them again less than two years later.
So I take a different view on business-building – based on advice an uncle once gave me. He said I should plan twenty years in advance. Taking such a long view of the future for your business means you are outmaneuvering your competition and staying ahead of changes – thus, your business will often outlive others. In other words, to truly be successful, you have to be playing the long game with a plan that includes location, overhead, supplies, customer retention, budgeting, and more, starting from Day 1.
- Location. Location. Location. Before you even open shop, choosing the right location is critical. Know where your competition is and never set up shop next door. It only divides earnings and clientele, with the added risk of creating a price war. Rather, find somewhere that has a demand for the services your business offers. If the location is conveniently close to your home, that is a bonus. If it isn’t, and commuting is too expensive, finding residence nearby will be worth the initial cost in moving. I have moved many times over the course of my career, and I haven’t regretted those choices.
Leverage ways to lower your overhead.
- Be located outdoors. When considering location, remember that sports facilities do not necessarily have to operate indoors. In fact, throughout the world, most sports do not practice nor play indoors. By choosing an outdoor location, you can drastically reduce facility costs. Sure, there will be times you’ll need to cancel due to extreme weather but that shouldn’t be so often to deter you from this cost-saving option. At Global Futbol Training we have a saying: Train like you play. You usually play games outdoors, so train outdoors.
- Buy equipment in bulk. If you can afford the larger order, buy equipment you’ll need in bulk. You can get a lower price, saving you thousands in the long run over making numerous small orders.
Set your prices correctly. The recipe for a successful sports business really hinges upon the number of dedicated customers. You can advertise all you want but if you don’t deliver on quality – or you don’t get people in the door in the first place – you’ll be shuttering your business in a matter of months. A huge component of this is the price tag of your services. Clients weigh the cost to benefit ratio, and if they do not feel the services are worth the expense, they will either be only briefly involved or forgo your business entirely.
Fortunately, there are ways to make your prices both more enticing and show excellent value:
- Consider a tiered system. This is where the longer a player commits to being a client, the lower their cost per session. Smaller installments over a longer period of time motivates customers to be with you long term while providing you steady, reliable income to keep growing your business.
- Offer group training. By offering classes or clinics to numerous players simultaneously, you can set the price per student at a low, attractive price but still make money due to the volume of participants. This is also a good way to introduce new, potentially long-term players (clients) to your methods and, hopefully, get them interested in a deeper commitment.
Be accessible on social media and your website. Social media has become an influential mainstay in business. In order to reach the broadest audience, it is important to be plugged into sites such as Facebook and Twitter. In my opinion, Facebook has a more national reach and Twitter is more international. Without using some social media and having a website, your business will seem outdated and unapproachable. In fact, nowadays, a business without a website cannot be taken seriously by potential customers. Players want to do research and learn about you long before they approach you as a new client. So create an easy to remember URL, one that explains the business or shares its title. And maintain a site that is simple to use and clean. It doesn’t need to be pricey. In fact, the less expensive – while still functional – the better.
A good website will also allow you to find your avatar. An avatar is your ideal customer, that is, the highest percentage demographic that visits your pages. I recommend that you learn about them in order to relate to them and build a relationship. This will boost both the reputation of your business in social circles and your credibility in the marketplace.
And, above all, respond to inquiries from both potential clients and current clients as quickly as possible. This will give them confidence that you do care about them. Because people share so much on the web these days, especially on social media, if you are unresponsive or very slow to respond, people will notice and others will find out. That negativity can kill your business. Players will simply find someplace else to train.
Gaining and retaining players. Along with a good website and responding quickly to inquiries and questions, gaining players rides a lot on positive word-of-mouth and good branding. After doing something like a small giveaway to launch your business, work hard with the few interested players you get so their positive experience spreads quickly and gains you new clients.
Secondly, building relationship with your players and building trust with their parents (where applicable) is key to retaining players. When they buy a package of lessons, make sure you finish the training as fast as you reasonably can. If it takes too long, people begin to drop off. They will cancel just because they are tired, sick or want to take a day off. More importantly, the longer it takes, the more likely they are to feel that they aren’t making measurable progress. Measurable progress is how you build trust and relationship.
And finally, consistency is by far one of the most important parts of retaining clients. But you also need some spontaneity. Combining spontaneity and regularity has important psychological effects on clients. Repetition breeds familiarity, while the unusual keeps an atmosphere fresh and memorable, making players look forward to their next session. Find the best combination of the two to retain the highest number of customers.
GROWING YOUR BUSINESS
Correctly handle taxes. A critical resource for all business owners is having a Certified Public Accountant (CPA). It can be very tempting to forgo an expense like this – especially when your business is new – but don’t. Tax laws and requirements change annually and a good CPA can save you thousands of dollars. Once, I had a CPA that caused me to owe $20,000 to the IRS. I immediately hired a new CPA who was able to discover the paperwork problem and remove the charges. That stressful lesson taught me how it can be a very expensive mistake to hire the wrong person or, possibly worse, no one at all. I recommend you research the best fit for you and get recommendations from other business owners. Conduct interviews with potential CPAs and find someone who has both the experience and the sincere care for you and your business. It will be well worth the time, energy, and money spent.
Have adequate insurance. Insurance is an asset every business owner must process. Although it can seem like a big budget expense, it is a necessary caution that shields you from the unexpected. No person can plan for every eventuality. You need a policy that will cover both you and your players in the event of injury or even death. Again, I suggest you research insurance policies for the best match for your business. Don’t simply go by price. Weigh price against the amount and type of coverage and make sure both match what you really need. An ounce of prevention, in this case, protection, is worth a pound of cure.
Be a smart spender. There are expenses in every business and choosing wisely how you spend can mean the difference between success and failure. Remember that when you’re starting out, your income is small. You need to mitigate spending accordingly. I’ll draw on advice from a notable expert here. The Profit, a television show on CNBC, covers the exploits of Marcus Lemonis. He is a business savvy person that aids failing businesses by investing money and insight, many of which have common problems.
Problems such as:
- Spending far more than necessary on shipping.
- Gambling on buying equipment without knowing if players will even like or use it or how durable it is.
- Not buying in bulk.
- Not negotiating purchases or spending adequate time shopping around.
To fix these…
- Rather than spending on shipping, shop locally.
- Only buy things you already know players will actually use (and won’t just break quickly) by doing research first.
- Leverage discounts for larger orders.
- Don’t just settle for the first offer, find the best deal.
Embrace diversity while maintaining uniformity. When you’re ready to begin adding employees, consider diversity. Diversity in the workforce creates a welcoming, inclusive company. Of course, it is also imperative that all employees have some traits in common. In a sports business, they need to be personable, knowledgeable, skilled, and excellent teachers with plenty of patience. On top of those, professionalism and reliability are essential. Workers should be polite and respectful at all times. Don’t permit excessive tardiness or absenteeism. Any failures in areas such as these can lose you the confidence – and thus the business – of your players. Choose employees wisely.
Go with what works – even if it isn’t your favorite or what you thought players would love. If one method, product, or service outdoes the others, try to place it in a wider marketplace and get it out to more potential new clients. Don’t be afraid to switch up your original gameplan if other methods are more effective. A good way to pinpoint what works, and what doesn’t, is customer reviews. After all, catering to clients is the most effective way to boost business.
Building a successful business boils down to having a strategy for the future – the long future. And as you grow, remember why you started the business in the first place. Believe in yourself and your vision.
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