It takes a lot of the same grit and determination as it does to train athletes to perform on the court as it does for Club Directors and Administrators to perform in a financial situation. Sometimes we can get caught up focusing so much on the kids, that the club financial management is an afterthought.

Here are 6 keys to assessing and managing  your club’s finances:

Align your finances with your club’s goals and vision

As club directors we naturally want to compete with our best competitors. However, it’s easy to fall into a hole of over-stretching yourself and over competing to the point that it doesn’t fit the goals and vision of your club. The backbone of financial stability is staying true to who you are, being realistic vs. competitive, and understanding your club’s constraints.

At the end of every season take some time to review your club, where you currently are and where you want to be. Create a roadmap of how to systematically put your club where you want to be. Understand your staff and what you’re capable of. How did you do, what to you need to change and what can you do going forward.

Approach the process with the right mindset

Whether your club has 140 teams, 70 teams or 8 teams, try to keep it as simple as possible. Financial management entails analyzing the past and managing the present. Evaluate your system of transactions (cash, credit cards, checks, the money coming in and out) and come up with an efficient and organized manner to record those in order to project your budget for the next 3-12 months. Preparing a budget can take as long as two to four weeks, and is not something that can be knocked out in 5 hours. Begin by breaking it into segments, and then go back and review the budget and make adjustments before finalizing.

Start small and then review and grow your data. If you’re a new club, getting the data for your budget will take some personal experience, ie: previous employment at another club or sports entity, or similar line of work, otherwise you can begin with an educated estimation. Take a team budget or tournament budget and work your way up. Understand and remember who you are, what you’re doing and what your goals are. How many teams are you fielding, what are the travel requirements and strategy, practice times, practice cost, coach salaries, etc., that can be plugged into a spreadsheet.

Create the Right Budgeting Team

Find the people in your club that know the key sections of your business and have the expertise to assist with projecting the budgets from a forecasting prospective. Ex: Accountant, Store/Pro Shop Manager, Camp Director, Tournament Director, Marketing Coordinator, etc. Pull in the experts where you have experts.

Forecast Effectively

Projecting your budget is not meant to track every penny. Start at a macro level and gradually narrow it down. We’re a cyclical organization, certain times of the year clubs are very cash rich, receiving fees up front, and you need to manage it. Clubs can run a very large profit at certain times of the year. If you don’t manage the weekly and monthly cash flow of your business, you can hit two months where you’re in the red, and need a line of credit or have to take out a loan. If you know this in advance, you can approach a bank a few months ahead of time with a planned out structure of finances, and it can be a much easier task.

In June and July, before tryouts start and revenue starts coming in, you may hit a point where your cash flow dips in the red. If you forecast it ahead of time you are able to evaluate how your club can generate more revenue, cut some expenses, or go to the bank for a line of credit to help float your payroll for a month or two until the cash flow starts to pick back up in August or September. Hopefully you can project that, plan for it, and then cash flow doesn’t dip into the red.

Include Critical Items

The Chart of Accounts should track your reports. The information you put in will be what you are able to track and report later on.  Tournaments can have a separate budget that feeds into the larger budget: courts, Officials, Event Staff, electricity. Include variable costs and try to get as close as you can: uniform costs, tournament fees, etc. Establishing your Chart of Accounts may be an evolution of two or three seasons to look at your reporting and make adjustments to align with your club’s revenue and expenses, and understanding the money coming in and the money coming out.

Conduct Regular Reviews

Go back and revisit every month to see if you’re way above or way below the projection.  Remember, you’re making educated revenue estimates. Don’t feel bad about guessing a little bit. Stay conservative and underestimate and overproduce rather than overestimate and underproduce. By taking the time to review and make adjustments, your budget will become more and more accurate.

Budgeting is estimating the financial position of your organization.  If you’re a club that’s been in existence you have a decent financial reporting structure you can go back and look at previous years to see how you’ve performed up until this point. For the most part it’s looking at the next 3 months, 6 months, 12 months to project how your club will perform. It allows you to set goals and then measure against them. If you don’t know what you’re shooting for, it’s hard to know how your club is performing.

Additional budgeting resources

View a Sample Budget

Budgeting Mistakes

This article was a collaboration with Steve Sack (MI Elite), Lexi Patton and Jason Kozak (VA Elite) and Briana Schunzel, JVA Director of Marketing and Education.