Let’s face it, the majority of Club Directors and Club Owners got into junior volleyball for the gym life, not the business life. However, one can argue that a junior volleyball club is successful or not before the first volleyball is rolled out. One key factor that determines the overall success and longevity of a volleyball club is knowing the business of managing a volleyball club.
Let’s look at why it’s important to have business experience or a business person to make decisions for your volleyball club:
1. Holistic Vision of a Club’s Objectives
A business savvy person understands that every facet of running a volleyball club is connected, and one program, or one decision can impact the entire club. Therefore, a successful club needs a business-minded person who understands the significance an important decision will have on the greater good of the club, and be able to make educated decisions, rather than decisions on-the-fly. The educated decisions are oftentimes made by combining the financial analyzation with the assessment of the club’s long term goals.
If you or your businessperson is also coaching a team, it’s important to have the long term goals and vision of the club as the top priority, rather than allow the needs of their team to be a reason that a club wide decision is made. Understand the club’s competitive advantage that will set it apart from other clubs in the area, and determine if it is sustainable in order to parlay into a profitable club. From that point, your club’s objectives should be sustaining your competitive advantage to ward off competitors.
2. Short and Long Term Financial Plan
The first step is to construct a pro forma income statement. By constructing a pro forma income statement along with your volleyball partners, you are forced to think through, prospectively, every aspect of your volleyball club. This exercise will require that you translate your business into hard numbers to determine if you can generate positive cash flow. Among other things, this will help you price your services so that you cover all of your expenses. How will you market your business? How will you cash flow your business during the off season? How much can you afford to pay your staff and coaches? Where will you practice and what will your rent be? By going through this exercise, many prospective club owners are surprised to learn how expensive a club can be to run. It is much better to know this ahead of time as opposed to after you have formed your club.
A businessperson will be able to make decisions related to debt and expenses, specifically how much a volleyball club can take on, especially when it comes to investing in a facility. The long term goals and vision of the club are the number one priority, so these decisions will be thought through and calculated. There should always be an understanding and a reason a business decision is made, along with transparency so that everyone buys in.
3. Resolution for the Bad and the Ugly
There are parts of running a volleyball club that no one signs up for, however they should be anticipated and planned for, then handled professionally. Red flags come up related to staffing, parent complaints, legal issues, labor laws, taxes, payroll, etc. All of the unexpected financial and operational hiccups are items that can be directed toward a businessperson on your staff. The volleyball side of the business should not be affected if those handling the training and gym environment are able to focus their efforts there, while the businessperson handles the behind the scenes operations.
When COVID-19 hit our industry, club’s had to shut their doors. Leases and contracts were renegotiated, abatement was necessary, money needed to be moved around and a businessperson was critical more than ever. Some clubs did not make it through this tough time, while others came out stronger. No one could have predicted the pandemic, but those with a businessperson in their corner were more prepared for the hard decisions.
4. Success Leads to More Success
Once your volleyball club has established a sustainable competitive advantage it becomes a race to attain scale. A businessperson can (1) identify how to grow your business so that your fixed costs represent a smaller percentage of your overall income statement, and (2) offer a lot of different services and then cross sell them. For example, if you run successful camps, your campers are more likely to join your club and vice versa. Once you have surpassed your break even point, each successive sales dollar generates marginally more profit. You are attempting to create a virtuous cycle where your growing profits permit you to hire better coaches and staff, run better camps, afford nicer facilities and so on. Success leads to more success. You are building the walls around your business higher and higher making your business impervious to your competitors.
The club’s that are attaining longevity have one common factor: a businessperson driving the short and long term business goals. JVA is dedicated to helping gym rats become business rats. You can learn skills by using the Club Management Guide, accessing our many webinars and resources. You can bring someone on staff who can do these tasks for you. Rather than make decisions on the fly, hire someone with a solid business education and background who can translate the finances, while you focus on the product and services. You can engage someone you know who is business savvy to mentor you. If you have a Board of Directors, seat people on your board who have experience in different facets of running a business.
Begin today to set up your club for long term success.
This article was a collaboration with Paul Schiffer (Academy Volleyball Cleveland Director) and Tim Kuzma (former Munciana Volleyball Business Director). Both clubs are members of the JVA.
