WAG Does your competitive team operate at a loss?

[Aussie_coach]

Competition programs that run at a loss, don’t nessesarily run at a loss because they make money for the gym in other ways. Those teams are often the drawcard, when new clients see what the Team kids are doing they want to join the club, the younger gymnast stick to their rec classes in the hope to be selected for the team at some stage, parents watch the comp kids and see what the gym can produce and keep bringing their kids.

 

[Aero]

I'm revisiting this thread because I thought about something today. Let's say we have a gym with an average sized rec program that can subsidize the team program if need be, and the gym also has an Xcel track and a JO track, both of which currently make a small profit aside from rec. Let's also say that the gym does not have any gymnasts over Level 7 yet. At what point do you think the team is most likely to cease making a profit on its own and will then need to begin being subsidized by the rec program?

• Do you think it would start at a certain level? For instance, when the gym starts getting Level 10s, which will require more coaching hours.
• Do you think it would happen when the team begins to attend more long distance meets? Do the travel expenses make a huge impact on this?
• Do you think the team program would finally start to lose money when the gym adds an elite program? The highly specific nature of training elites requires a large amount of money and investment, so when does it become enough to start draining money enough to put you at a loss?

There are a ton of moving parts for sure, but I'm wondering if there is a common "straw that broke the camel's back" moment or scenario when the gym would have to start routing funds from the rec program, or raise tuition, etc.

Another great question: what can the gym do to prevent the team program from falling into the red?

Also, feel free to keep voting in the poll!

However, our HC is very upfront that she is not operating the gym to make a profit and she is very happy to break even which we do through very successful rec. classes. She's not really operating with a business model in mind, she doesn't even pay herself. Though if I were running the show I would quickly bump up tuition rates for team kids so they were more in line with what other gyms charge.

@coachmolly, that does not sound like a very good place to work! How can you run a stable business, while also keeping your customers and staff happy, when you don't have any business plan at all?!

 

[raenndrops]

I'm revisiting this thread because I thought about something today. Let's say we have a gym with an average sized rec program that can subsidize the team program if need be, and the gym also has an Xcel track and a JO track, both of which currently make a small profit aside from rec. Let's also say that the gym does not have any gymnasts over Level 7 yet. At what point do you think the team is most likely to cease making a profit on its own and will then need to begin being subsidized by the rec program?

• Do you think it would start at a certain level? For instance, when the gym starts getting Level 10s, which will require more coaching hours.
• Do you think it would happen when the team begins to attend more long distance meets? Do the travel expenses make a huge impact on this?
• Do you think the team program would finally start to lose money when the gym adds an elite program? The highly specific nature of training elites requires a large amount of money and investment, so when does it become enough to start draining money enough to put you at a loss?

There are a ton of moving parts for sure, but I'm wondering if there is a common "straw that broke the camel's back" moment or scenario when the gym would have to start routing funds from the rec program, or raise tuition, etc.

Another great question: what can the gym do to prevent the team program from falling into the red?

Also, feel free to keep voting in the poll!


@coachmolly, that does not sound like a very good place to work! How can you run a stable business, while also keeping your customers and staff happy, when you don't have any business plan at all?!

I think it would probably start at higher levels when the gymnasts are there more hours with higher level coaches (who generally get paid more per hour based on their skill set and experience) ... in addition to the fact that higher levels more often go to more long distance meets (to get a variety of experience against quality opponents). If I were in that position, I would make sure the coaches fees for the meets were enough to cover the costs of the travel meets. I would also probably look into raising tuition.

We have L3 - L8 (training L9) and Xcel Gold and Platinum. They all go to the same meets and the only long-distance meet is Y Nationals (which some girls opt out of if it is too far away).
They all practice 7.5 hours a week ... 42 weeks a year.
When we last raised tuition a few years ago, we bumped it from $75 to $80 a month. These last few years, we have had 45-50 girls compete each season. Before then, our concession stands at home meets had been enough to keep the team at a slight profit without increasing tuition... of course, we also had fewer girls on team then and fewer team girls meant fewer team coaches.
This summer, we have needed extra coaches because we have added 20 new team girls and havent really lost anyone yet... that wont happen until August, lol.

 

[profmom]

I don't know as much as the insiders, but I'd say most gyms with high level team members operate on a pyramid model with the base supporting the much smaller number of athletes at the top. These may be upper optionals, simply because the numbers get smaller as you go up the ranks and it's impractical to group athletes of widely varying skill levels together for workouts (our boys' team has a small workout group for upper optionals), or younger kids in programs like TOPS or Future Stars that require both extra training and coach travel to events with small numbers of athletes. I do think the more athletes you can retain, as long as you have a reasonable fee structure, the more you can keep the team in the black, but you don't necessarily want ratios to be profitable when you're training top level athletes, nor do you want to choose events and meets for these folks solely with an eye toward breaking even. One of our L10 guys was seen at a travel meet this year and got heavily recruited by a very good club as a result. No way the gym didn't lose money sending the coach to that meet with only six athletes, but the visibility for this athlete and the program were probably a net plus.

You want to have a business model that won't price your top athletes' families out of the sport, so you probably don't want them paying the real cost of training plus travel to meets/events. Some gyms address this partially through booster club fundraising to cover the travel expenses, but there is still the simple hourly cost of training in smaller groups. My impression is that if you cost it out in terms of training fees with a coach-athlete ratio in mind, the cost of training actually tends to go down or stay the same rather than up as an athlete advances (i.e., the L4 might pay $350/month for a 12 hour per week schedule to work out in a group of 10, whereas the L9 is paying $450/month to work out for 20 hours a week in a group of 6).

 

[Taxidriver]

I don’t know the ins and outs of how much the team operates at a loss but I do know this when you work out the hourly rate rec pays 3x as much per hour as those at the lowest level of squad up to 6 x as much as those on the highest hours as in squad the more hours you train your hourly rate is reduced.

 

[Taxidriver]

Forgot to say without the hourly rate being reduced the more hours the gymnast is on I think some gymnasts would be prices out when reaching the higher levels and wouldn’t be able to afford the additional training hours.