Over the weekend I was chatting with a gym owner who had a parent asking to see the breakdown of her fees. I know what some of you are saying right now… “You don’t ask Walmart to see the breakdown of that gallon of milk!” For a few years, I said the same thing. When I saw that response on another Facebook group years ago, I thought, “That person is right. You don’t!” 


But that analogy doesn’t work for our parents. Here’s why:


The milk companies don’t publish their prices on their website for consumers. Even if they did, any reasonable person would understand why milk needs to be marked up.


  1. The cost of the milk itself
  2. The credit card fees incurred by the company supplying the milk
  3. The cost of transporting the milk to the store in a semi
  4. The cost of the driver who is offloading the milk
  5. The cost of the person stocking the milk
  6. The cost of the person at Walmart cleaning the glass, checking expiration dates, mopping floors, etc. 
  7. The cost of the cashier (or machine) processing the purchase
  8. The cost of the credit card fees when 90% of people use their cards to purchase milk. 
  9. Your bag if you put milk in a bag (I don’t know…some people do…and yes, when I owned a restaurant, we had every penny of your meal broken down to include plastic forks, sauce packets, bags, cups, lids, and straws. It’s the only way to profit from food!)


When we’re talking about goods sold, this is pretty common, and no one is typically questioning it. The reason they’re questioning your fees is that you’re not educating them on what goes into a competition. Once you do that, your parents will see the markup and understand you’re not buying your new car with their competition fees. 


When I asked this gym owner to break down the fees for me so I could help her provide a reasonable answer to the parent, I saw there was a bit of a problem in her system. She didn’t have the dollar-for-dollar breakdown. It was an overall estimate rounded to the nearest hundred. 


She might be very good at estimating after all these years, but not all gym owners get that lucky, In fact, many of them run into major issues. They estimated wrong. They didn’t do their homework on their future expenses and got solid quotes in writing from choreographers and music producers. They overspent. They didn’t get as many athletes as their optimistic budget forecasted. I did several of these in my first few years as a gym owner. Not only can this ruin your business, but it can make it really hard to justify expenses to parents. Losing money one year often means you’re charging more the next. The parents aren’t seeing the difference season over season, though. They’re simply seeing their cost increase and your service remains the same. 


So is it any wonder that parents are asking for a breakdown? If their fees are going up and you haven’t provided some element of justification, they’re going to give pushback. 


I have a trusted parent who has been part of my program for a few years who reviews all my packets before they go out to the general public. She always helps by providing some basic copyediting, as well as questions a new parent might ask. She also warns me when she thinks something might need more explanation or justification. This year she sent me her thoughts on the packet and pointed out that I may get some parents questioning the slight fee increase. She noted that this year we traveled to Dallas and Branson, whereas the fees went up about $150 for next season, and we’re only traveling to Branson.


I was grateful for the heads-up. She’s right. I increased my fees, but I didn’t fully sell people on why they were increasing. “Inflation” isn’t the wrong answer, but it’s a hard pill for parents struggling to afford this sport. You can absolutely justify your expenses that way, but if you can sell them on how you’re improving the program next year, it will be a win-win for everyone. 


Not only had tuition increased in my recreational programs (which in itself was a good answer), but we were, in fact, improving next year’s experience with some changes to our tumbling classes for all star athletes.


Without educating your parents, you’ll get those pessimists who assume the extra dollars are going into your new backyard BBQ area at your house.


You see, there is a difference between profit and markup. When I spoke to the gym owner this weekend, she felt she couldn’t be transparent with the parent because she would be accused of being greedy. However, when she broke down her fees for me, she wasn’t greedy at all. She was simply marking up her fees to cover her cost. Consider the following:


  1. Do you pay a staff member (or yourself) to enter all athletes in RegChamp or whatever Varsity uses for every event? 
  2. Do you have a staff member available to help if a parent has trouble with a USASF membership or Athlinq registration? 
  3. Do you have someone who goes above and beyond sharing the standard competition schedule provided by the event producer? For example, Melanie spends an hour breaking down arrival times, gathering times, warm-up times, performance times, and awards. She carefully notes hair changes for all programs and the information for the team reps at each event. I then spend 20 minutes reviewing it before it goes out in a pretty document that’s easy for parents to understand.
  4. Do you have someone spending time with your choreographer, music producer, and stunt clinicians? 
  5. How about all that time you spend submitting skills to confirm legalities and reviewing the rules outside of practice?
  6. Do you host scoresheet meetings for parents and athletes? If so, I bet you’re spending tons of time reading through your comments and comparing them to the last event so you can make a solid practice plan for the future.
  7. Do you invest time into hiring a great photographer for the program and then scheduling each athlete and team?
  8. What about planning the banquet, Christmas parties, and other team bonding events? 


All of this takes time. It takes an admin, director, or owner to accomplish, and it goes far beyond what your recreational programs require. I’ve had a couple of parents over the past 12 years ask about our markups on competitive fees. I explained that their tuition covers our instruction at practice just like a recreational athlete would. The markup on your competitive fees covers all the stuff listed above that is specific to this program only. It also includes coaches’ travel, per diem, parking, etc.


When I explain that, I’ve never had a parent complain or say we were greedy. They simply had no idea what goes into a competitive season. 


You are not free. Your time should not be free. You absolutely must mark up your products to simply break even.


My first year ordering uniforms was in 2011. I made a big mistake financially. Luckily, I only had about 17 cheerleaders, so my big mistake cost me just $230. I put together this great package with a uniform, socks, shoes, bow, and warm-ups. I felt the price was already high, so I didn’t mark it up. I didn’t even allow any money for my own time. Then, a parent asked me if they could pay with a credit card. So, I bought a card swiper and downloaded the Square app. Easy.


But when I ordered the uniforms, I realized I was short a little over $200. Not only did I not pay myself for the dozen hours invested in communication and design with the companies, admin work placing orders, and time fitting the athletes, but I also didn’t account for the credit card fees or shipping.


I was too embarrassed to go back to the parents. I was so nervous to tell Justin. At this point, my business paid me, but not much. In the end, I learned a valuable lesson. Had I built a budget and marked up the uniforms, I could have afforded a mistake and still broken even. 


When you mark up your fees to account for all your expenses, you are not doing anything different than any other business. You’re also not getting rich off competition fees.


Now profit…that’s a little different. Tomorrow I’ll tell you why profit is important and how you can profit this upcoming season (and why profit is not greedy!)