REVENUE STREAMS OF A 5-A-SIDE FACILITY
Once the costs have been identified, it is possible to move to the revenue side.
Generally, the sources of greatest income are the following:
- Rental of pitches for members and non-members, team registration in tournaments and leagues, which is the main source of income.
- Rental of rooms for events such as meetings, events, promotions and parties.
- Football schools/academies for children or personalized training sessions for adults included the summer camps.
- Sale of clothing and accessories
- Bar/restaurant activities.
Being the size and costs of the land, of the required staff and the devaluation of the equipment uncompressible, the goal of the owner is to maximize the use of the facility to achieve maximum income.
5-a-side is a team sport, and the activities are mainly concentrated in the evening hours, that is when players are off-work and available to meet and play. It happens then to have empty fields for most of the day while the peak of users occurs in the range between 18-22, times in which one would not have enough fields to meet the demand.
To try to reverse this cycle, the wise manager must act upstream, trying to spread the activities throughout the day in order to distribute the presence of consumers heterogeneously.
Being able to reach different types of customers and diversify the offer for the regular customers is the winning strategy.
In the morning, for instance, why not offering pick-up games for those who don’t work till late, or whose occupation is flexible (taxi-drivers, hospital workers, ..)?
Or again, why not introduce specific soccer training sessions (attack, defense, goalkeepers..) at lunch time, targeted to the facility usual customers, but that they can take advantage of when they are alone?
In the afternoon, one of the most interesting tools – adopted for this purpose by almost all successful clubs – is the introduction of kids academies.
Opening a soccer school for children brings several advantages. In addition to keeping the club active even in the hours when the usual customers are not available, it allows to have fixed monthly revenues and to create additional revenues streams. The kids will bring their parents to the facility, that are potential clients not only for the bar or the shop, but for the other facility programs as well, like Corporate Leagues or Pick-up games.
If the manager’s business model is to be an operator only, he can contact one of the many independent companies that can run a kids academy and that look for a place to run their business. He will have smaller incomes but more peace of mind.
If the manager wants, on the other hand, to run is own academy, he might buy a license from an established soccer team that has academy programs to franchise.
Some of our clients in Europe and Africa have licensed the OM Ludiq Camp program and are doing very well, but at the expenses of increased staff and dedication.
Managing the peak-hours is a totally different business. Leagues and social bookings must be carefully planned to avoid clashes.
As for the academy, there are many organizers that may take care of the leagues if you want more peace of mind, but in this case you will lose 50% of the potential income from this source. This might not be an issue if you have a very well conceived bar/restaurant and a real pro-shop with top sport equipment to sell and professional vendors.
Social booking are the source of income with less hassles, but you have to cater for no-shows for approximately 15% of your reservations and be prepared to offer casual players to replace those who are missing from time to time.
In anglo-saxon markets (US included) the percentage of social booking on the total fields occupation may get as low as 30% of the available slots.
In latin markets this percentage increases to 70%. In total, fields related activities count for 60%-70% of the total club’s revenues.
Bar/restaurant income, as well, is higher in anglo-saxons market for the incidence of beer consumption; it is normally around 20% in regular clubs.
By definition, beer and sport drinks brands are considered endemic sponsors for 5-a-side soccer and may eventually help to support the investment cost of the facility.
The shop is a minor source of income for most clubs, not more than 5%-7% of the total turnover. With one exception, the Nike Orange Futbol club in Rome, Italy.
This facility has succeeded to raise the income percentage of its shop operation to 30% of the total, by putting the shop at the very entrance of the club. Infact, when you enter the club you actually enter the shop, a real call-to-action for most clients. Many brands have, in recent years, completely reverser their shop’s layout to increase merchandising sales. Hard Rock Cafè is an example.
Last but not least, the memberships. This is a dream-income for the 5-a-side operators. Nobody, except, again, the Nike Futbolclub in Rome, Italy has ever succeed to ask a membership fee that gives free access to soccer, and discount on the bar and shop.
We will analyze this business model in our next article.