Hello everyone and welcome to another episode of the next generation people and profits podcast. I’m your host, Dan cotton. And before we get into the episode, please make sure that you have liked this podcast. If you enjoyed the content you subscribe so you don’t miss any other great future podcasts. And if you know any owners or business owners, or cheering gymnastics owners that would benefit from listening to some of these episodes. Make sure you share the podcast with them. Help us grow our audience, help us spread our message and help us take more owners and connect to their passion to profits.
All right, so one of the most common questions we get from cheer gym owners is how to develop their competition schedule. And this is actually a really important question because there are a number of factors that go into creating your competition schedule, and none of them should be taken lightly. So we have three, well really four recommend four steps to doing this. And number one is Determine your budget first and stay within that budget with zero exceptions. Number two is determine what you want to get out of your competition season. And then number three is research competitions, travel costs, food and lodging. And then lastly, you set your schedule. So parents are always hounding us for the competition schedule like in my gym, it is literally the day of tryouts that they want to know what the competition schedule is, which most companies haven’t even released to their competition schedules at that point in time. And we certainly don’t know anything like what it’s going to cost per athlete or anything like that. And so, it honestly gets very annoying, because they have no idea how much work actually goes into determining the competition schedule. You know, they just think well, it’s really easy. Just pick the competitions and we go to them. And there’s so much that needs to occur to set the competition schedule correctly. And it’s not as easy as just going to a website and picking out comps. At least if you’re gonna do it well and make sure you get a great experience out of your season. So, number one, first and foremost, you absolutely positively have to set your budget and follow it okay. No exceptions. You need to know what is my competition schedule budget, and then you need to stick to that budget and do not allow yourself to go outside of it.
It is really really easy to add a one off competition here and a one off competition there because well it’s only $50 A kid it’s only you know $1,000 A team whatever it is some some pricing. That seems like a really, really great deal. And then the next thing you know you’ve gone over budget. And that’s something you never want to do because it’s just it’s eating into your profit margins, and it’s negatively impacting your ability to stay in business. So back in our first three years of owning the gym, we didn’t really do this very well. We kind of did it wrong and we had basically made an error in calculations when we were looking at our budget. And we had put too many competitions on the schedule for what we charged. Now we were at a break even point a break even point with we weren’t actually losing money. So we technically stayed within the budget, but the problem was is that if this was at a time where we were not doing as good of a job, making sure that every single athlete was paying and we were collecting on every single athlete. We also had some athletes that were pseudo scholarships, which I I’ll do another episode on why you should never ever scholarship so we had a number of factors in there that made it that we were short funds. We didn’t have enough money coming in for competition schedule, you know, you think Oh, well, I’m just gonna I’m gonna comp this kid’s tuition or I’ll take care of your comp fees as a like you’re helping someone out and you’re just hurting yourself and you’re hurting all your other clients because you’re making them pay more money. So anyways, back to the story. So within our first three years, I can’t remember what year was I think it was the second or the third year that we were owning our gym before we had really dialed things in as a business, and we were we budgeted wrong and we were headed to our last competition of the season. And this was back when it was like, you know, look at the bank account and see what’s in it. We weren’t using profit first. We weren’t using any of the other budgeting plans that can really helped set you up for success. And we needed to pay for the competition within the next five days. It was the next weekend. And we didn’t have any money that was set to come in and we did not have enough money in the bank account. And we needed to we had no money to pay for it. And that was a really horrible position to be in because our option was figure it out. Or tell our families that we aren’t going to this competition, which is just another problem because then they’re gonna say, well, we want refunds.
We want to know, you know, what are you going to give us back and we certainly couldn’t afford to give them anything back because we weren’t bringing in enough money. So we ended up having to leverage some assets and get a short term loan, which Be very careful if you’re ever doing that. We were able to get it through my bank that I’ve done various loans through so we got a decent rate. We were fine. But we absolutely we talked to people because we were like how do we get a loan quickly and you know, you’re doing the Google searching and some of the stuff has gotten better, but there are all sorts of very predatory awful people out there. That offer loans that are a no win for you. Yes, you get the money, but the interest you’re gonna pay, you’re gonna pay double triple what they’re actually going to give you over the course of time so you don’t ever want to get into bed with those kinds of people. You know, it’s like that payday loan style model, where you just you lose a whole bunch of money. So don’t do that. Just go through your reputable bank. If you have assets, you can, generally speaking get lines of credit and things like that on Endor loans on those assets. So would I ever recommend doing that though? No, you need to make sure you have your budget set. That’s never happened again. That was a horrible experience. And we were like nope, never again, we will never do that again. And we’ve set our budget and we’ve stayed within it and we charge accordingly and we’ve done the right thing. So how do you determine your budget? Well, take your total per athlete charge, remove your profit margin, which should be 10 to 20%. And then look at the cost of competitions and determine what you can do. So you can make a spreadsheet and you can set it all up and then you know you divide it out and you bargain hunt. So what this would look like is if you charge I’m just going to use arbitrary numbers that are really easy and easy for me to do math in my head. So if you charge $1,000 per athlete for competition fees per year, you take your 10% profit margin out of that which is $100 that means you have $900 to spend on competition fees per athlete. Now this is assuming every single athlete pays which they should be doing. So you have $900 per athlete to divide up to your competitions.
Now, depending on where you compete, this is where you you need to look at different bargains you need to look at different companies. You know, there are some companies out there that will let you do you know a certain number of competitions for a flat rate. You know, you pay this amount and pay $350 And you get to go to five events of your choosing or and I’m making things up here. You have companies that charge less that are just you know more around that $99 and athlete mark. Then you have companies out there that charge $185 An athlete which is starting to get into that kind of crazy preposterous zone. But at the same time we know that these venues and these things are very, very expensive. So again, we got to think of what were telling people we want and where we want our money to go because there are ways to save costs now obviously big companies they’re looking at profit margins as well. So they’re in it to make a profit too. But you that’s how you pick your competition schedule and you literally go okay this competition cost this much this competition cost this much, and then you divide it out and make sure you stay within or even under your budget. It’s always nice to have a little breathing room and a 10% profit margin, I’ll be honest, is too small, it really should be more around 20%. So if you’re charging 1000 You should be budgeting around 800. And that’s where you should be at now. Some IEPs and things like that you can stretch $800 really far and go to a ton of events out where I’m at out in the Pacific Northwest. I don’t have any options, right I do. I have varsity only they bought every company that company that existed out here and no one else is here except for one company that just recently started up and they had an owner get arrested for inappropriate things with children and then they rebranded and just not sure it’s a company that I’m ready to jump in with yet. So and those are my only options. That’s literally what I got. And they’re not even that much cheaper than varsity. They’re a little bit cheaper but not a ton. So you’ve got to look at what you have available and what you can afford, okay, and you’ve got to stay within budget. You’ve got to stay within budget. You’ve got to stay within budget.
Now how do you do that when you are at the beginning of your season, and you don’t actually know the competition’s costs because they haven’t released the fees? Well, you do that by kind of guesstimating and what you’re going to do is you’re going to look at what that company charged the season before and then you’re going to add 20% because most companies are not going to go over a 20% jump and that’s going to let you know ballpark Am I within my budget. And then you can release a tentative competition schedule. We always release a tentative competition schedule at the beginning of the year. We say we still have more research to do we still have to wait for prices to come out but this is the tentative schedule. After that, you need to determine what you want to get out of your competition season. Do you want to go to All Star worlds or do you want to go to summit or do you not want to go to USASF worlds? Do you want to go to the Bahamas Do you just want to do competing in cheerleading locally. Determining these things is very much going to dictate what events you go to. We have a worlds team and we must go to Worlds bids events to ensure they continue to be a worlds team. Now I know that the new world All Star Federation has started up and they’re starting their own worlds. And that creates a whole different level of complexity because they haven’t really released a ton of details on how you get there. Right but there’s a lot of flux in the industry right now. But you need to figure out what you want to get out of your season every single year. And you also need to figure out how much you want to ask your parents to pay for things because if you are a smaller gym and you require your parents to fly to six different competitions and stay in hotels that’s a lot of extra money.
Of X extra money and stay in hotels. That is going to be a lot of extra money. So you need to factor that in and make sure that you are taking care of your families and you’re not adding additional costs that you don’t need to add to what they do. So make sure you’ve researched that make sure you know what you want to get out of your season what your goal is and then you’re going after that goal. And then lastly is research your competitions, your travel costs, your food options, your lodging options, etc and pick the best one for you and your families. compile all that info and then you set your schedule. Now there’s a lot into the researching the competitions. What are the travel costs, what are the food options, because you may have a competition that is really cheap and easy to get to but there’s nowhere to stay nearby and or there’s nowhere to eat nearby that’s really inconvenient or maybe it’s not in a safe part of town. And you don’t want to take your family’s there like there are so many aspects into what you need to research before you decide that a competition is the right fit for you. Now us we go to the city of Portland for events. Portland is not a super safe place. The area around where the competition is is not super safe. But we’re used to it because we’re from Portland so people drive in Portland all the time. So it’s a little bit more comfortable for us but we’ve had people come from out of town who are like I will never go back to an event in Portland because I don’t feel safe in that city. So you want to research those things. You also want to look at the travel costs. What do flights cost to get to the location you want to go to? We were doing this this year we actually looked at changing our nationals event to one in California which you would think going from Oregon to California would be pretty cheap. Well, as we researched, we found out that unfortunately the event fell on some spring break timeframes and some other things and flights were astronomical. They were almost $200 more expensive to fly round trip to California than it was to fly round trip to NCAA nationals in Dallas. So that created a conundrum for us. We needed to figure out what was the best fit for our families and what were they going to want to do the most. Now again, I know there’s people out there who are not on Team varsity, and that’s totally fine. I don’t have any issue with it. I’m not on any team. I’m on Team I run a competitive cheerleading program and if I don’t take kids to competitions, I don’t have a competitive cheerleading program and it’s gonna take me a little bit of time to educate my parents on new events, but there also have to be new events to educate them on.
So take your time and make sure you’ve thought through these different options. And when you look at lodging options and you look at food costs and you look at hotels and all those different things. You also have to be factoring in How did things work with your staff. You know, what are you able to afford for them? Are you able to are you charging additional for coaches fees for competition which you can or you can wrap it all up into one but if you’re going to do that then you need to also budget that. Take that out of your overall budget of what you’re charging the athletes these are ways that people get themselves into jams really quick, they go oh well I charge competition fees. And it includes everything. It includes the coach travel, the coach pay and all that stuff. I don’t I don’t break that out differently. And then bam, next thing you know you have hosed yourself and you have set yourself up not for success because you’ve budgeted within that number but not factoring in what a hotel is cost. What does food per diem cost? What the staff pay cost, and now you’re $5,000 over budget. So you want to be really careful with those things and make sure you’ve thought through each individual element of budgeting for your competition season. So moving forward, one of the things you can do is you can obviously get help from next gen we are really good at guiding our clients through this in our one on one coaching calls and helping them set their schedules and giving them the pros and cons of different events because we’ve been to a lot of them. So it’s always nice to have another opinion on these things. But take your time when you’re processing this take your time when you’re setting your competition schedule. Remember that although your parents are asking for it and they’re demanding it you don’t need to rush okay. Yes, they want to know but a lot of times it’s just because they want to know and some open and honest communication of like this is why you don’t know because of XY and Z I’m working on these things and I will have it to you when I have it to you will help. Just because people are demanding something doesn’t mean you have to give it to them right away. It creates urgency and when we make decisions feeling like we’re we have to make them urgently sometimes we don’t always make the best decision decision. So as you move forward, if you haven’t determined your competition schedule yet or you’re reevaluating your competition schedule because of some recent events and cheerleading and you want to change things up. Follow this plan. Start with your budget, which you’ve probably already set, start with your budget and go from there. Keep the budget front of mine. Thank you for joining us for this episode. of the next generation gym owners people and profit. We already set start with your budget and go from there.
That budget is really what is going to set you up for success. If you’re going over budget, you’re not going to have a successful season is not setting your business up for success. So stay focused on the budget if you stay within budget, the rest of the things will generally work themselves out as long as you obviously are deciding on a competition schedule and you’re going to competitions and delivering a product on what you promise you’re going to deliver to your families. Thank you for listening to this episode. I really appreciate you taking the time. We love having you here. Remember like share, subscribe, leave us a review. If you love the content. Share this with somebody else. If you’re looking for another great podcast check out the Jason Larkins let’s talk to your podcast and make sure you have liked the NG Cheron gymnastics owners Facebook page on or you joined it on Facebook and you’ve checked out our website. nextgenowners.com We’ll catch you on the next one.
