elements of a basic economic challenge
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Elements of a Basic Economic Challenge
Scarce resources Time Money
Alternative Uses of those Resources
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Common Resources
Land
Labor
Capital
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Land
FarmlandParklandOpen SpaceWaterAir MineralsFossil FuelsReceptacle for waste products
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Labor
Time
Muscle Power
Brainpower
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Capital
BuildingsMachineryEquipmentRoadsBridgesTunnels
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Components in Economic Decision Making
What goods and services?How are they produced?For whom are they produced?How extensively are resources used?
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Questions every economy must answer…
What should be produced?How many should be produced?What methods should be used?How should the goods be distributed?
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Two Kinds of Economies
Command economy
Market economy
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Characteristics of a Pure Market Economy
Economic freedomEconomic incentivesCompetitionPrivate ownershipLimited government
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Demand Curve
PriceDemandRelationship between price and demandPrice goes down, demand goes up
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Supply Curve
QuantityPriceRelationship between quantity and pricePositive relationship = price increases so does quantity supplied
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Equilibrium Price
If the demand increases, the demand curve would shift up and right, and the equilibrium price would increase.If the demand decreases, the demand curve would shift down and left, and the equilibrium price would decrease
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A Comparison of Four Types of Market Structures
Market Number of firms
Control over price
Type of product
Entry Competition
Pure competition
Very large None Standardized Very easy Price-based
Monopolistic competition
Large Small Differentiated Fairly easy Non-price
Oligopoly Few dominant firms
Fair amount of control
Standardized or differentiated
Difficult
Non-price competition for differentiated products
Monopoly One Large One Blocked to other firms
Non-existant
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Bonds
Bearer Bonds
Registered Bonds
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Inflation
Demand-pull
Cost-push
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What is Economics Then?
MacroeconomicsMicroeconomicsEconomies of scaleLaw of Diminishing ReturnsLaw of Increasing Costs
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Concerns of Unions
Job securityWagesJob safetyMedical benefitsInsurance benefitsPension plans
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Key Labor Laws
National Labor Relations ActNorris-LaGuardia ActTaft-Hartley ActLandrum-Griffin Act
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Common Contract Issues
PayFringe benefitsBonusesWorking conditionsJob security
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Organization Handbook Components
Statement of objectivesOrganization historyOrganization chartJob descriptionsPersonnel policies and proceduresTerms and conditions of employmentHolidays and vacationsEmployee benefits and services
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Common Types of Organizational Structures
Primitive Structure or Agency StructureFunctional StructureProduct StructureTerritorial StructureCustomer StructureMixed Structure
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Primitive StructureSmall Town USA
“A” Baseball FranchiseOrganizational Chart
Founder
Employees
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Internal Factors Influencing Structure Development
Size
Product Diversity
Employee Characteristics
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Chain of CommandLevels of Management
First-line or sometimes called the front line
Middle
Top
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Pointers to Assure Effective Delegation of Authority
Be sure delegates are willing to accept authorityBe sure the delegates understand what is expected of themBe sure the delegates are qualifiedEstablish policies to guide decisionsSpecify deadlinesEstablish an evaluation processReward delegates who get things doneAdmit that others can do a task
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Commonly Encountered Resistance to Delegation
Proper job information not receivedLack proper trainingLack self-confidence & fear failureNot provided proper equipment or toolsNot certain the extent of authority providedNot confidence there is anything to gain by accepting the authorityFind it easier for the manager to make the decisionsNot paid for this responsibility
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Organizing for Financial Management
For-profitNot-for-profitSole ProprietorshipGeneral PartnershipLimited PartnershipLimited Liability PartnershipLimited Liability CorporationS CorporationC Corporation
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Common Reasons for Starting a Business …
Be own bossFinancial IndependenceCreative FreedomFully use own skills and knowledge
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Questions to Answer for Identifying the Niche …
What business am I interested in starting?What services or products will I sell?Is my idea practical?Will my idea fill a need?What is my competition?What is my business’s advantage over existing firms?Can I deliver a better quality service?Can I create a demand for my business?
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Pre-business Checklist
What skills and experience do I bring to the business?What will be my legal structure?How will my company’s business records be maintained?What equipment or supplies will I needed?How will I compensate myself?What financing will I need?Where will my business be located?What will I name my business?
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Financial Accountability &Reporting
Existence and OccurrenceCompletenessRights and ObligationsValuation and AllocationPresentation and Disclosure
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Internal Control
It is a process.It is affected by the people of the organization.It provides reasonable assurance regarding the achievement of objectivesIt is geared to the achievement of the organization’s objectives.
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Components of a Control Procedure …
Control EnvironmentRisk AssessmentControl ActivitiesInformation and CommunicationMonitoring
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Key Questions the Financial Manager needs to Answer
What long-term investments should the organization consider?What lines of business will the organization be in?What sorts of facilities, machinery, and equipment will the organization need?Where will the organization secure the long-term financing to pay for investment?Will the organization bring additional investors?Will the organization borrow the funds needed?How will the organization manage everyday financial activities?
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Financial Reports
Balance sheetStatement of cash flowsCommon-size statementsCommon-size balance sheetsCommon-sized income statements
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Auditing
Internal auditing or control
External Auditing
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The Internal Control Process:
Key Objectives
Efficiency and effectiveness of operationsReliability and completeness of financial and management informationCompliance with applicable laws and regulations
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Internal control consists of …
Management oversight and the control cultureRisk managementControl activitiesInformation and communicationMonitoring activities
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Characteristics of Performance Information
UnderstandabilityRelevanceReliabilityComparabilityCost beneficial
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What is financial planning?
It is the foundation upon which an organization can be a successful future.It is much easier for decisions to be made to be made in a proactive manner when a plan is in place.Risks are reduced and the organization’s competitiveness is increased.Financial planning is an integral part of any strategic plan.
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Financial planning can help provide solutions …
Funding capital projectsDeveloping new products and servicesRetiring products and servicesSelling assetsPurchasing assetsProtecting assetsRelocating an organizationTax liabilities
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Financial Staff’s Activities
Forecasting and planningMajor investment and financial decisionsCoordination and controlDealing with the financial marketsRisk management
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Cash Planning
The process of determining the amount of cash needed at a particular point in the budget year by gathering data from both internal and external sources.
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Cash
Cash is any medium of exchange that a bank will accept at face value.Cash Flow is the difference between the number of dollars that came in and the number that went out.Operating cash flow tells the manager whether cash inflow will meet the daily cash outflow.Cash flow budget records estimates of cash receipts (cash in) and disbursements (cash out) resulting in an estimate of the cash surplus or deficit.
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Profit
Profit is the sum remaining after all costs, direct and indirect, are deducted from the revenue of an organization.
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Profit
Profit is the sum remaining after all costs, direct and indirect, are deducted from the revenue of an organization.Revenue is the amount charged to customers for goods or services sold to them. There are alternative terms used to identify revenue including sales, fees earned, rent earned, or fares earned.
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Common Measures of Profitability
Profit margins on SalesReturn on Total AssetsReturn on Common EquityReturn on Investments
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Margin
Margin is the difference between the cost and the selling price of goods produced and services rendered.Profit margin is a profitability measure that defines the relationship between sales and net income.
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Capital Budgeting
Capital budgeting deals with investment decisions involving fixed assets. It is an outline of planned investments in fixed assets. Further, it is a process of analyzing projects and deciding which ones to include in the capital budget.A fixed or permanent asset is one that is long-lived.
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Budget
The budget is a part of the foundation upon which an organization justifies its mission. It is an estimate of revenue and expenses for a given period of time, usually 1-2 years. Further, the budget is a restatement of the organization’s objectives in financial terms.
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Common Budget Types
Line itemProgramPerformanceZero-basedEntrepreneurial
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Budgeting Process
Collecting dataAnalyzing the dataIdentifying the data collectedPreparing the budget documentImplementing the approved budget
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Sources of Revenue
Membership feesTicket salesAdmissions feesFood concessionsCorporate sponsorshipsLicensing agreementsBeverage concession
Lease agreementsParking concessionMerchandise salesLuxury suitesClub/Premium seatingPremium restaurant agreements
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Sample Expenditures
SalariesEmployee benefitsInsurance premiumsGuaranteesLease agreementsVehicle rentalsTelephoneElectricityComputer maintenance
Water & SewageNatural gasOffice suppliesPostageDuplicationPrintingAdvertisingTaxesScholarships
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Purchasing Process
The selection process
Needs assessment
Procurement
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Purchasing process ensures purchases will …
Meet the program needsProvide qualityBe acquired following proper proceduresBe properly accounted forBe maintained for future safe use
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Common Components of a Purchasing Program
StandardizeQualityPrompt paymentEarly-bird orderingProfessional and personal relationships with vendorsBusinesslike approach
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Factors to be considered in developing a needs assessment
Available space & facilitiesDesired activitiesSafety & health of the participantsNumber of participantsCost Length of seasonGeographical locationFitinventory
Staff & supervisionInstructor/coachContinual learningStorageAge of participantsGender of participantsSkill of participantsPhysical & mental abilitiesType of organizationPrioritizing
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Guidelines for selecting equipment and supplies …
Determine purchasing powerBegin & maintain a wish listDetermine organization needsDetermine quality desiredWithin budgetMaintenance friendlyReputable company
Old or newBased on program goalsDetermine priority needPersons with disabilitiesSafety standardsReview a variety of vendorsConsider guaranteeUsability of equipmentCompanies service record
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Guidelines for purchasing equipment and supplies …
Purchases meet organization’s requirementsPurchases have management approvalPurchasing should be done in advance of needSpecifications clearLow cost with quality
Reputable business firmCentral purchasing can save dollarsAll request must have purchase requisitionsConsider local firmsObtain competitive bidsAll purchase should be accompanied with a purchase order
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Purchase order should contain the following …
Name and contact information for person submitting requestName and contact information of the vendorDateAccount numberDepartmentAmount
QuantityUnitDescriptionUnit priceSpecial terms: date for delivery, substitutions, discountRequestor’s signatureSupervisor’s signature
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Evaluating Equipment before purchase consider …
Safety recordSpecial considerationsDoes product meet program needs?What is the warranty?Who is the manufacturer?
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The Procurement Process
Need establishedManagement consultationInitial request submittedRequest reviewedFunds availablePreparation of specifications
Receipt of bidsComparison of bidsRecommendation of appropriate bid for purchasePurchase order to supplierFollow-up, receipt of goodsPayment authorized
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Typical Bid Process
Writing specifications for approved item(s) to be purchasedReceive bidsEvaluate bids to ensure all specifications have been metChoose vendor(s)Submit the purchase orderReceive the equipmentPay invoice after equipment or supplies are verified
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Writing Specifications
Incomplete Worth BW8 Powercell Baseball Bat or equivalent(does not specify length requested and allows vendor to make judgment on substitution)
Complete(without substitutions)
Worth BW8 Powercell Baseball Bat, 35” Length, 32 ounce weight, 2 5/8” diameter – No substitutions or alternatives
Complete(with substitutions)
Worth BW8 Powercell Baseball Bat, 35” Length, 32 ounce weight, 2 5/8” diameter OrEaston LK8 Magnum Bat, 35” Length, 32 ounces weight, 2 5/8” diameterOrLouisville Slugger “YB-17” Baseball Bat, 35” Length, 32 ounce weight, 2 5/8” diameter
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To: FlagHouse Physical Education & Recreation 601 FlagHouse Drive Hasbrouck Hts., NJ 07604-3116
Ship/Bill To: Julia Ann Hypes Dept. of Health, Physical Education and Sport Sciences Morehead State University 201 Laughlin Health Building Morehead, KY 40351
Purchase Order Number 014325 Account Number 10-15320-201 Date June 4, 2003
QUANTITY ITEM UNITS DESCRIPTION UNITPRICE
TOTAL
5 G11655 Ea. Wilson Impact Rubber Basketball Size 7
14.00 70.00
10 G5786 Ea. Rawlings “RWW” Leather Basketball Size 6
56.00 560.00
3 G5976 Pr. Thera-Brand Dumbbell Roller
20.00 60.00
10 G11970 Doz. Spalding Top Flight Series X-Out Golf Balls
10.00 100.00
Subtotal 790.00Shipping $40.00
Balance Due $830.00
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Public Revenue Streams
Tax abatementGrantsHard Taxes
Local income tax Real estate Personal property General sales
Soft Taxes Car rental Hotel-motel player
Restaurant Sin
Cigarettes Alcohol Gambling Prostitution
Taxi
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Private Funding Sources
Cash donationsIn-kind contributionsNaming rightsConcessionaire exclusivity agreementsFood serving rightsBeverage serving rightsPremium restaurant rightsSponsorship packages
Life insurance packagesLease agreementsLuxury suitesPremium seatingPersonal seat licensesParking feesAdvertising rightsVendor/contractor equityBequests and trustsReal estate gifts
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10 Common Types of Broadcast Media
•ABC, CBS, NBC, FOX, Westinghouse Broadcasting, and Public Broadcasting Service, •Ultra High Frequency (UHF) Channels, •Superstations (namely, WGN in Chicago, and WTBS in Atlanta), •Cable Channels (i.e., TNT in Atlanta, and USA Network in New York City),•Sports Channels (i.e., Entertainment and Sports Programming Network [ESPN], Sportsvision and Sports Channels in Chicago, St. Louis, Ohio, and Orlando, Prime Network in Houston, Prism in Philadelphia, and Sunshine Network in Orlando, •Independent Producers, •Local TV Stations (local Very High Frequency [VHF]), •Cable Franchises, •Pay-For-View, and •Local AM and FM Radio.
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Essentials in Financial Planning
The mission, goals, and objectives for the overall planAn analysis of the organization’s current financial situationAn analysis of revenue projections versus expense projectionsAn analysis of capital projections throughout the financial period of the planSpecific information regarding the intended financial state at the end of the time period
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Mechanisms for Financing Debt
Bonds Full-faith and credit obligations Non-guaranteed
Revenue bonds Tax increment bonds Certificates of participation
Taxable bonds Asset-backed securitizations
Special bonding authorities
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Luxury Seats in Sport FacilitiesLeague # suites 2001 # Teams Annual Lease PriceMLB 2,286 30 $ 85,000NBA 2,533 29 $113,000NFL 4,294 31 $100,000NHL 2,813 30 $ 77,000Total 11,926 120 $ 93,750 average priceSource: Modified from Howard and Crompton, 2004, 265, 266. Note: NBA/NHL Shared Arena annual lease price = $199,000.
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Sampling of the Number of Club Seats at Various Venues and the prices charged by Teams for their Occupancy Team Facility Number of Price Range/year
Club SeatsLakers (NBA) Staples Ctr 4,500 $12,995 to 14,995/seasonTrailBlazers (NBA) Rose Garden 2,500 $7,500 to 11,500/seasonNuggets (NBA) Pepsi Ctr 1,854 $65 to 100/gameKnicks (NBA) Madison Square 3,000 $175 to 1,350/gameCoyotes (NHL) American West 1,651 $72/game;$3,250/seasonBengals (NFL) Paul Brown 7,700 $995 to 1,900/seasonBucs (NFL) Raymond James 12,000 $950 to 2,500/seasonRavens (NFL) PSINet 3,196 $108 to 298/gameIndians (MLB) Jacobs Field 2,064 $32/game; $1,905/seasonRockies (MLB) Coors Field 4,400 $30 to 32/gameRangers (MLB) Arlington 5,700 $2,00 to 3,000/seasonSource: Modified from Howard and Crompton, 2004, 270
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PSLs Average Cost by LeagueLeague Average Price RangeMLB $3,615 –14,600NBA $ 900 - 5,000NFL $ 600 – 3,350NHL $ 750 - 4,000
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Groups Benefiting from a Sponsorship
The business interest of the sponsoring corporationThe business interests of the event and participantsSponsor’s direct customersCustomer who buys the product or entertainment
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Element in Developing a Sponsorship Philosophy
The exchange processPhilanthropyAdvertising cost and valueReturn on investmentMarket reaserch
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Sponsorship Objectives
Achieving sales objectivesGenerating media benefitsSecuring entitlementSecuring naming rightsIncreasing public awareness of the company, the product, or both
Altering/reinforcing public perception of the companyIdentifying company with a market segmentInvolving company in the communityBuilding good will among decision makersCreating an advantage over competitorsGaining unique opportunities in terms of hospitality and entertainment
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Examples of Athletic Platform
The teamThe sportThe eventThe athleteProfessional athleticsCollegiate athleticsInterscholastic athleticsRecreational athletics
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Components of a Sponsorship Proposal or
Agreement
Objectives of the sponsorshipProfile and background of sponsoreePromotional opportunities availableLevels of sponsorshipSponsor benefitsFee structurePayment scheduleContract lengthContract renewal optionsEvaluation methodology
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Questions for the planner to ask before drafting
proposal
How would you describe the organization?What is the event to be sponsored?What impact do you have on the local community?What is the purpose of your event?How will the organization involve the community?Will the event allow sponsors to reach their consumers?Is the event based on a similar successful event?Why is the event unique?
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Levels of Sponsorship
Exclusive sponsorshipPrimary sponsorshipSubsidiary sponsorshipOfficial supplier
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Customizing the Package
Official statusSponsorship feeTitle rightsTelevision exposurePublic relations and media exposureLogo usesignage
Advertising rightsHospitality rightsPoint-of-sale promotionsDirect-mail listsProduct samplingLegal liabilitiesFuture options
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Sponsor Benefits
Season ticketsAdvertisement in yearbook, program, or media guideScoreboard/PA exposureSpecial event nightsArena signageSpecial items (VIP room, luxury suite, club seats, parking passes)
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Sponsorship Pricing
Cost-plus
Competitive market
Relative-value
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Review the following before establishing a price
…
Degree of primary consumer match with company’s target marketSize of the primary consumer basePotential media publicitySales opportunity, psychological associationExposure opportunity
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Why Licensing?
Consumer demand for logoed apparel has provided sport programs to financially benefit through licensing. In addition to financial gains, exposure for the program is created through the availability of logoed products in the marketplace.
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Trademark Classifications
Class 6 – metal goodsClass 16 – paper goods and printed materialsClass 18 – leather goodsClass 21 – housewares and glassClass 24 – fabrics (pennants and banners)Class 25 - clothing
Class 26 – fancy goods (patches for clothing buttons)Class 28 – toys and sporting goodsClass 41 – education and entertainment servicesTM = Trademark notification® = Federally registered mark© = Copyright notification
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In-house or Outsourced
Scope of the licensing programPotential for the sale of the productBudgetAvailability of specialized expertise
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Licensing Agreement Components
Parties involvedDescriptive marksDetails of marksExclusive or non-exclusiveProduct sample includedCompliance review schedule
RoyaltyRoyalty auditsRoyalty exemptionsPayment scheduleInternational distributionContract lengthContract renewal options
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Typical Financial Arrangements with a
Franchise
The franchisor allowing the franchisee to see its name or brandThe franchisor exercising continuing control over the franchiseeThe franchisor providing assistance to the franchiseeThe franchisee making periodical payments to the franchisor
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Questions to ask before buying a franchise …
Are you willing and able to take on the responsibilities of managing your own business?Will you enjoy the franchise?Are you willing to completely follow the franchise system?Do you have a history of success in dealing and interacting with people?
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Questions continued
Can you afford the franchise?Have you carefully studied the legal documents?Does the franchise you are considering have a track record of success?Are the franchisees generally happy and successful?Do you like the franchise’s staff whom you will be working with?
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Financing a Sport Franchise
Public sources Government bonds Tax dollars
Sales Hotel-motel Utility Car rental Taxi Liquor, cigarettes,
gambling Road Capital improvement
Private sources Food serving rights Beverage serving rights Premier restaurant
rights Luxury suites Club seats Parking rights Merchandise sales Sponsorship contracts Licensing agreements Land & money gifts
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Product of a Box Office
Seating plansTicket systemTicketing softwareOutsourcing ticketingOnline ticketingPricing structureCredit card service
Group salesDiscounted pricesAdvanced salesSales incentive plansTickets General admission Reserved
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Types of Tickets
General admissionReservedSeason ticketMini-season plansIndividual eventComplimentaryPressStudentRain check
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Typical Seating
Seating configurationDiscounting ticket pricesOn sale dateGroup salesTickets to be heldUsher seatsObstructed seatsHouse seatsObstructed view seatsWhen to release house seats
Seats required for performersVIP seatsPress passesComplimentary ticketsLatecomer seatsWaiting line policyComplimentary tickets unclaimedUnpaid reservations unclaimedStanding room
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Retail Operations
Sporting events Beverage Fast food Parking Premium Restaurants Merchandise sales
Non-sporting events Rentals Downhill ski facilities&
services
Equestrian services Golf facilities &
services Marina services Shuttle bus service Theater productions Movie theaters Vending machine
services Aquatics facilities &
services Hotel/motel services
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Major Concessionaires
AramarkCompassFine Hosts CorporationGlobal SpectrumSodexhoSportservice CorporationVolume Services Ameria
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Food Concession Guidelines
Employee appearanceTraining goalsMaintenance goalsOperation goalsRegulationsInspectionsPatron comforts
Safety certificationSanitationGuest relationsProfessional signs & pricingDecorations Food handlers guidelines
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Effective Alcohol Sales
Develop an alcohol management planDevelop procedures to stop outside alcohol from entering venueEstablish crowd control procedures for alcohol managementInstall signage to enlighten patrons about responsible drinkingEstablish a strong ejection policyDo not promote or advertise drinking during the event
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Continued Sales Strategy
Make sure security personnel are aware of crowd demographicsAll staff should complete alcohol management schoolEstablish consumption policiesTailgating only permitted in parking lots under strict supervision of security personnelEstablish non-alcohol sections within the venueDevelop a designated-driver program
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Strategies for a successfulParking Concession
Purchase adequate liability insuranceProvide adequate surfacing for the proposed trafficEnsure safe entrance and exit areasProvide adequate lightingPlan for immediate snow and ice removal
Establish an emergency plan for the spaceEnsure that adequate supervision and security is availableProvide for the safety of the pedestriansPlan a graphic systemProvide an adequate number of cashiers and attendants
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Parking Controls
Sensors or loops buried in each entrance lineA single pass laneA cashier or checker watching the sellers and authorizing passesSpot checks on sellers
Different colored tickets for different events, days, or hoursCash registers,TV monitorsClean graphics and signs indicating special entrances
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Questions for Finding a Retail Niche
How is my store special and unique?What groups of people would most benefit by what I offer?How have I physically set up my store to be user-friendly in a concerted effort to serve this group of people?Is my advertising targeted to the customers I desire to serve?What products do I like?
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Steps to Becoming a Good Buyer
Be specific in defining needsUnderstand the optionsTell the supplierAim for a win-win situationImpose deadlines and conditions
Seek assistanceEducate the seller about your special needsLook for after-sale serviceYell for help when necessary
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Four Ms in Retail
Merchandising
Markups
Marketing
Methodology
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Keys to Effective Store Layout
Maximizing the space
Controlling & directing traffic flow
Maximizing exposure
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Common Mistakes Made by Retailers
No business planNo marketing planNo sales planNo advisory planNo cash reserve or real cash flow
Ignoring the numbersNot being automatedNot knowing your customerIgnoring employeesBeing a lone ranger
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Minimizing the Damage
Lock it upPlay traffic copWatch who cleans after the employee store closesEncourage employeesKeep an eye on the future
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Successful Retail Stores Accomplish the following
Found in prominent locationsOffer personalized serviceOffer competitive pricingPrint catalogues for employeesMerchandise their goods/products
Consider themselves retail outletsSell innovative goods/productsConcentrate on apparel and accessoriesStock regularly needed suppliesSell licensed merchandise
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Critical Areas for Customers
Identify the customersDifferentiate the customers from one anotherInteract with the customersCustomize items for the customers
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Identifying Customers
Use drip irrigationVerify & update customer dataTake inventory of all customer dataLocate customer-identifying information
Devise strategies for collecting more dataVerify information at least every two years
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Customer Date Gathered
NameMailing addressBusiness phoneHome phoneFax numberE-mail Position & titleAccount numberFrequencies of purchasesBilling & invoice recordsWarranty recordsCoupon redemption
Credit card numberBirthdaysAnniversariesSpouses or significant other’s nameChildren’s namesBuying historyPreferencesSales force recordsRepair & service recordsLoyalty user-cardCustomer commentsList swaps
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Customer Task List
Determine first how many customers are knownDevise programs to increase the number of customers knownEstablish a common format for identifying customersDetermine how to link customer with purchasesMake it easy to capture customer data
Allow customers to enter & update informationDevelop a system to ensure the contact information is currentTrack all referred to and referred by parameters for all prospects & customersConsider programs to increase referrals by current customers
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Ranking Customers
Prioritize efforts & gain most advantage with most valuable customersTailor behavior toward each customers needsDevelop a customer profitability and valuation modelCategorize customers by their differing needs
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How-to Interact with Customers
Direct sales callsE-mail and electronic data interchangeFax messagesMailPoint-of-purchaseTelephoneWebsite
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Why Sport Teams Lose Fans
Not importantCost outweighs enjoymentDirty facilitiesBoring food servicePoor seatingInconvenient parkingNo luxury seatingNo picnic areas
No non-smoking areasNo non-drinking areasNo place to change the young childrenSouvenirs too expensiveNo other entertainment but the game itselfTeam is not excitingTeam fails to win consistentlyNo opportunities to meet the players
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Increasing the Audience
Pre-event entertainmentYouth games at half-timeSpecial group promotionsSpecial rates for groupsGiveawaysScheduling doubleheadersUse of pep band at eventsFace-painting contestTeam color night
Reduced ticket feesShoot-out contests at half-timeEvent busesSpecial daysStudent athletes visiting schools as role modelsClip-out couponsRadio giveaways to listeners
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Customer Needs over the Internet
Security
Support
Information
privacy
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What Sets Customers Off
Long delaysService or sales problemsUncaring or sloppy attitudeWasted timeFailure to listenFeeling that you are a number and not an important customer
Failure to follow customer’s instructionsBroken promisesFinancial losses = poor serviceInability to provide needed answersImpolite salespersons
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Outsourcing
Outsourcing is where a third-party service provider hosts a family of integrated applications and infrastructure services.A key element of outsourcing revolves around the transfer of control over the outsourced process.
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Why outsource?
Reduction in operating costsIncrease in controlling operation costsChanging management focus to core business functionsAccessing world class expertise and capabilitiesRedirecting resources toward activities which have a greater return on investmentImprove production and eliminate backlogsAccessing information and professional solutions to non-business core functions
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What could be outsourced?
Accounting and bookkeeping servicesFinancial servicesPension record keeping servicesAuditing and taxation servicesData entry and processing
E-mail systemSoftware developmentWebsiteHead huntingConcessionsSafety and securityRisk managementParking
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Advantages of Outsourcing
Volume purchasingConcessionaire can return more revenue to the facilityCapital outlays for equipment avoidedManagement, staff, purchasing, maintenance, inventory, storage, and vendor relations are eliminatedThe vendor takes the financial risks
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Disadvantages of Outsourcing
Losing some or all control of the operationVendor failing to recognize needsCustomer dissatisfied with merchandise or services offeredScheduling part-time employeesPurchasing perishable foodstuffs or imported souvenirsDetermining what stands are open on a given dayDeciding whether or not the sanitation policies are enforcedDetermining who is stealing money, food, or merchandise
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Advantages of In-House Operations
Management has complete controlManagement controls pricingThe quality of product or service is controlledThere is greater potential for generating revenue
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Components for Concessionaire Agreement
Date submittedName, address, phone, fax, and e-mailPrincipal contactHistorical background of companyFull description of business philosophyFull description of financial objectives
CommissionEquipment to be providedInsurance coverageFull description of personnel training programAdvertising and promotional efforts
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Contract Components
Type of merchandise or service to be providedLicense to products or provide a serviceWhere products are producedOption to renew contractTermination clauseCommission clauseInsuranceIndemnificationRight to remove merchandiseMaintenance clause
Establish company-vendor committeeStore or service hoursSecurityVending machine contractMonthly management meetingExclusions from the contractDefinition of gross versus netAudit controlsBuyout provisions
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Typical Concession Contracts
Commission
Management Fee
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Fund Raising
Fund raising is the art of soliciting money for charitable organizations, schools, college/universities, political parties, as well as other worthy organizations and projects.
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Fundraising is …
Anything that increases revenue streams including, but not limited to:
Deferred giving Donations Grants Merchandising Licensing Promotions Naming events Sponsorships Special events
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Case Statement
A case statement is a clear, concise, and compelling explanation why the organization merits the support of its members and others.It explains the rationale and objectives of the fund raising program.It is the basis for proposals, which will be submitted to corporations, foundations, and individuals.
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Steps for Gathering Information for the Critical
Review
Develop a questionnaire to interview the various stakeholdersDevelop a list of stakeholdersCritique the mission and beliefs statements and compare to other like organizationsExamine the goals and objectives of the organization and other similar organizationsSurvey other case statements from similar organizations and communities
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Key Ingredients in the Case Statement
Description of the compelling needDescription why the organization is uniquely suited to implement the projectThe purpose and mission of the organization which enables it to implement successfully this projectHow and why the organization was startedWhat is the organization doing today in this area that would further support this projectWhere will the organization be five years from now.
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Basic Elements of a Fund Raising Program
Management structureVolunteer requirements establishedVolunteer recruitmentIdentification of giving opportunities
Overall goal and goals by sourceCultivation and solicitation strategiesPublic relationsProspects at the end of the funneltimetable
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Guidelines for Fund Raising Plan
Must be program specificMust establish a prospect listAccounting system must be establishedDevise an acknowledgement & follow-up systemEstablish a timetableMust have not-for-profit tax status
Establish a board of directorsShort- and long-term plan developedPrioritized goalsSimple organizational structureInvolve an attorney and CPAChoose cost-effective projectsTrain staff & volunteers
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Fund Raising Issues
Definable financial needCan fund raising meet needsIs this the best whyProject worthy of supportAdequate and competent leadershipCross-section of volunteers
Support organization in existencePositive reputationCost of raising dollarsDownside risksTime and resource requirementsLegal issuesFinancial & political climate conducive to success
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Components of a Fund Raising Program
WhatWhereWhyWhenBy whomCategories or vehicles for givingFeasibility
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Common Models of Fund Raising
Contributor campaignsGrant seekingMajor/planned giving programsProduct salesMembership campaignsSpecial eventsCapital campaigns
Person-to-person solicitationSingle-person cultivationTelemarketingDirect mail solicitationContests of chanceAnnual campaignsMemorial requests
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Benefits to Contributors
Preferred parkingComplimentary ticketsReduced ticket pricesSpecial seatingVIP lounge membership cardPress guideOther publicationsMention and recognition in game programsTravel with teamSpecial apparelA private booth for home contestsNamed scholarship
Free golfFree or reduce membership to health and wellness centerSpecial event ticket priorityDinner & banquet seating priorityPlaquesInvitations to special eventsPeriodic newsletterAuto decalAway game ticket priorityAccess to press boxNamed scholarshipNamed room
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Common Types of Major Gifts
BequestsTrustsLife incomeLife insuranceOutright gift
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Role of Staff/Board for Grants
Board Members Set annual goals Identifies grantmakers Cultivates grantors Influence to gain
access/appointments Asks for gift
Staff Develops & administers
plan Conducts research on
grantmakers Organizes cultivation
process Writes proposal Provides information for
visits Accompanies board
member and provides information regarding visit
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Role of Board/Staff for Major Gifts
Board member Sets annual goal Identifies prospects Cultivates prospect Uses influence to gain
access Asks for gift
Staff Develops & administers
plan Conducts research on
grantmakers Organizes cultivation
process Writes proposal Provides information for
visits Accompanies board
member and provides information regarding visit
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Role of Board/Staff for Special Events
Board member Set annual goal Serves on event
committees Recruits & solicits
sponsorships Attends event &
recruits attendees/sells tickets
Staff Develops &
Administers plan Provides staff support
to event committee Provides research on
sponsorship prospects Provides staff support
during the event
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Role of Booster Club Board
Help develop fund raising planEnsure the case statement is strongHelp develop strategies for cultivationEvaluate expectation of giving from boardSolicit gifts at various levelsInvolve other board members
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How Board Members Participate
Make a personal contributionUnderstand the fund raising planUnderstand and endorse the caseRaise money from outside sources
Identify prospects Cultivate prospects Ask for gifts
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Why Committees?
Provides for representationProvides for valuable inputEstablishes policy and proceduresIncreases communicationAllows employee involvement in decision making
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Advantages of Committees
UnificationRepresentationMotivationCoordinationConsolidationcommunication
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Disadvantages of Committees
Increased costsExtra time needed to complete taskCompromise decisionsLeadership strugglesUnbalanced representation
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Types of Committees
Standing committees Nomination Awards Finance Human Resource Audit Constitution or by laws
Special committees or ad hoc
Administrative Project committees
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Structure of a Committee Meeting
Call to orderRoll callMinutes of previous meetingState the purpose of the meetingState briefly the program (agenda) for the meetingDiscuss and resolve agenda itemsNew businessAdjourn meeting
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Sample Agenda
Call to orderWelcome and introductionsRoll call or attendanceApproval of the agendaReview and acceptance of minutes from last meetingTreasurers reportOther reports
Action items and discussionDiscussion itemsOld businessNew businessAdjournment
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Chairperson’s Duties
Planning the meeting and establishing the agendaConducting the meetingMaintaining records and informationGetting action on items on the agendaEvaluation of committees
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Secretary’s Duties
Take minutesTake attendancePrepare minutes for approvalMaintain a file for the minutesCollect committee reportsCollect staff reports
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Treasurer’s Duties
Prepare monthly financial reportsSign checks (i.e., payroll, expenses, etc.)Invest surplus dollarsMaintain checks and balancesPrepare a financial report to the board monthly
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Components of an Orientation Program
Emphasize the importance of being a committee memberExplain duties of members and officersReview committee’s authorityReview committee’s chargeReview organization’s policies, practices, and proceduresReview constitution and by-lawsProvide a list of all members and contact informationReview previous minutes
Review committee’s projectsReview schedule of meetings, locations, dates, and timesReview all current assignments of individual committee membersReview previous membershipCriteria for selecting new membersIdentify staff and their rolesReview short- and long-range strategic plan
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Components of a Grant Workbook
Developing & evaluating proposal ideas, how-toProposal listRedefining proposal ideas to find more funding sourcesExpanded and redefined proposal listNeeds assessmentDocumenting needPrivate funding source research toolsHow to contact private funding source
UniquenessCase statementAdvocates, how to use theAdvocate listAdvisory committees, how to develop community supportAdvisory committee listGovernment funding sourcesList government funding programs with deadlinesSample letters of proposal
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Brainstorming Technique
Appoint a neutral group leader or employ an outside facilitatorAppoint a recorderSet a time limit – 10 minutesState one question or problemAs each group to generate answers to the problem
Encourage group members to piggyback on each other’s answersRecord and post all answers, combining those that are similar.
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Reviewing Project from Different Perspectives
Subject areas
Constituencies group
Type of grant
Project location
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Needs Assessment Approaches
Key informantCase studiesCommunity forumSocial indicatorssurvey
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Typical Proposal Sequence
Cover letterTitle pageExecutive summaryIntroductionProblem/needGoals and objectives
MethodsAssessment or evaluation of the projectFuture fundingDisseminationBudgetattachments
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Common Writing Tips
Follow the guidelines exactlyFill in all the blanksDouble check all computationsRepeat anything they ask forYour writing style must reflect what the funding source wantsBegin each section with a strong motivating lead sentenceVocabulary – shorter words are generally better than long, complex wordsStyle –easily skimmableUse short sentences
Use an active voice and describe emotions and feelingsUse humorAsk the funding source a question and answer itUse contractionsUse short paragraphs – five to seven linesVisual attractiveness – use underlining, bullets, bold headings, pictures, charts and graphs
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Trends Affecting Not-for-Profits
Leadership’s roleValue-return on investmentResponsivenessTechnology useChange loopsRevenue sourcesGenerational issues
WorkforceOutsourcing &co-souringGovernanceCompetition & alliancesConsolidation & mergersGlobalizationImage building
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What is a Booster Club?
A booster club is a not-for-profit entity organized to raise funds for a sport or other organization.It is generally an organization operated by volunteers and, in some cases, a few paid staff.
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Typical Components of a Constitution or by laws
Officers terms
Board Terms Criteria for
membership
Committees Standing Ad Hoc
Board meetingsMembership categoriesPurposeDissolution
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Typical Officers
President
Vice president
Secretary
Treasurer
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Volunteer Characteristics
25% rule20% ruleVolunteers have feelingsVolunteers have needsVolunteers have specific interestsVolunteers have specific competenciesVolunteers are individuals
Volunteers are not professionalsVolunteers are not paid staffVolunteers desire to be of assistanceVolunteers have the potential to be excellent recruitersVolunteers can be educated to assume a variety of rolesVolunteers are able to grow in professional competency
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Recruiting Methods for Volunteers
Making the event or activity funFinding out what the volunteer(s) respond toInvolving the volunteer and familyMaking it easy, attractive, and interesting to volunteerMaking the volunteer responsible for something
Treating the volunteer with respectAsking for referralsPlanning social events for the volunteersPaying for a volunteer’s trainingPlacing volunteers’ photographs on bulletin boards
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Before Recruiting Begins
Train recruitersDevelop job descriptionsIdentify potential volunteersMatch people with jobsObtain approvals
Annual plansEstablish recruiting techniques
Grow your own volunteers Appointment from within Referrals Friendship groups Family involvement Benefit packages Peripheral groups Use of media to
communicate volunteer opportunities
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Retaining Volunteers
by making The event or activity
attractive to belong Certain the event is
well organized People feel needed
and appreciated Sure there is a
friendly atmosphere A special effort to call
volunteers
Certain the volunteer understands duties
Sure to get volunteers input
A special effort to recognize or reward volunteers
The event or activity fun
Certain that everyone receives an appropriate thank you
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Volunteer Orientation Models
Large group sessions
Small group sessions
Personal, one-on-one orientation sessions
Personal, one-on-one mentoring
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Orientation Agenda
Philosophical & conceptual framework of the organizationContent of the various organization’s programsGovernance of the organizationOrganization of the various organization’s programsHistory of the organizationPolicies & procedures of the organization
Bylaws and the proper conduct of businessEthics issuesBenefits of volunteering and special privilegesIdentification of key people in the organizationTelephone numbers of key peopleRealistic job previews
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Elements of Supervision
Establishing criteria of success, standards of performance, and programs objectives such as the job description and annual plan of workMeasuring actual volunteer performance with respect to these stated criteria of success through observation, conferences, and evaluationMaking corrections, as needed, through managerial action.
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Common Solutions to Conflict Management
Retraining
Reassignment
Redesign
Dismissal
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Factors causing Conflict
Lack of agreement about program goalsIll-defined & unmeasurable objectivesAbsence of a preconceived planExcluded from the planning processInaccessibility of leadersDistortion of information accidentally or deliberatelyLack of trust
Hidden agendasIneffective listeningA belief in absolutesA belief that only two sides of an issue exist and that one must be right and the other wrongIndividual differencesMisunderstandings about territory, policy, authority, and role expectations
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Common Types of Awards
Group recognitionIndividual RecognitionInformal recognitionPublic & media recognitionFormal recognition
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Possible Areas of Liability
BuildingsMotor vehiclesProgram activitiesEmployee conductBusiness general liabilityPerformance guaranteesFinancial securityFringes for employees as prescribed by law
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Insurance Coverages Available
Professional teams, athletes and eventsAmateur athletes and eventsCollege and high teams and athletesAthletic associationsAccident and injury coverageSport venuesPromotions & special eventsGeneral public liabilityLiability coverage protecting employees, directors, and officers
Sports campsTransportation insuranceCatastrophic injuryDisabilityYouth & adult teams and leaguesHealth, fitness, sport clubsVehicle insuranceProtection of finances and operations
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Components of a Comprehensive Insurance
Program
Should include , but not limited to: Property
Fire, flood, hurricane, tornado, and/or earthquake Business income Commercial liability Machinery and equipment Employment practice liability Special liability Bonding Crime insurance Employee benefits
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Basic Liability Areas Insurance Companies Review to Determine
Insurability
SecurityMaintenanceHousekeepingEmergency servicesParking and traffic controlConcessions Chemical usage & storage
Staff training & preparednessFiscal operationsStaff supervisionActivity planningEquipment used in building & grounds maintenance and sport equipment
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Checklist for Securing Insurance
- Never assume you are covered;- Always check your insurance coverage;- Check insurance policy at least twice a year for changes and to be sure you still have adequate coverage;- File a report on an incident as soon as it happens and submit a proper claim to the insurance company;- Anyone involved in an activity outside their job jurisdiction or areas of control may seek tosecure more personal liability coverage;- Be aware of potential hazards and report them to the necessary people or group;- Secure a short-term group accident policy to cover special activities when risk is forseeable;- Analyze the liability aspects of your program or area and ensure adequatecoverage in these areas;- Have release forms; they may solve small liability problems because the participantsacknowledge the risk they are assuming and their voluntary participation in the program, but donot rely on them to solve any negligent actions and have participants in events obtain medicals.
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Considerations Before Selecting Deductible
Access student-athlete’s or patron’s primary insurance firstSelect a higher deductibleReview physical activity involved and gender, lower for contact activities and lower for non-contact activitiesCoordinate all medical care through HMO or a special arrangement with local hospitalConsider placing a physician on a stipendEstablish a referral policy to maximize in-house medical services
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Selecting Appropriate Insurance Program
Select a competent independent insurance consultantKnow insurance vendors and the various types of products availableSecure a number of quotesSeek adequate coverageIdentify risksInsure the correct risksAlways reduce insurance costs by establishing a risk management plan and preventing or reducing risksUnderstand the basic policy and exclusions
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Elements in Effective Financial Governance
Defining the roles & responsibilities of the board of directors & senior management in the risk management processDeveloping appropriate checks and balances for effective oversight & control of risk developmentEstablishing policy & control guidelinesDesigning risk measurement & reporting procedures
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Checklist for risk management
Is there a risk management policy?Does the policy clearly define the underlying business rationale?Is the hedge orientation towards a “market view” or a defined strategy?Does the policy include approval levels?Is there an oversight function?
Is there a clear reporting to senior management about business risks?Do proper expertise & systems reside in-house to identify & identify risk?Is there risk management expertise within the organization?Are management reports reviewed by senior management?Does the Board periodically review performance?
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Sport Entity Risk Management Concerns
Property loss Stationary, mobile, & leased
Employee safety & health Accident prevention Industrial hygiene
Personnel Workers compensation Pension plans Key personnel loss Contractual employees Insurance
Life, disability, & health
Liability control General, vehicle, & product
Environmental protection Storage, pollution control, &
waste disposal
Emergency planning Crowd control, fire,
bombing, & spectator health emergencies
Financial risk Interest rate risk Credit risk Currency risk Liquidity risk Theft of product Theft or money Market risk
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Property Insurance Checklist
Identify & value buildings, equipment, and landIdentify & value property leased from othersIdentify & value property leased to othersIdentify location & value of stationary inventory (average cost)Identify and value inventory being transported (average cost)
Identify & value property under constructionIdentify & value owned or leased vehiclesIdentify special perils to which property is exposed
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Liability Loss Sources
Bodily or personal injury to employee, customers, or guestsProperty damage to real or personal property of othersIntentional injury to people or their reputations, including illegal accusations or restraint of alleged shopliftersWrongful hiring, sexual harassment, or invasion of privacy or employees or job applicantsVicarious liability
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Potential Methods for Dealing with Potential Losses
Risk avoidanceRisk assumptionRisk transfer through insuranceRisk transfer other than insuranceSelf-insuranceLoss preventionLoss reduction
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Assuming risk =
Loss costs are small and will be funded by current cash flowLoss exposure are retained and funded with a cash reserveLoss exposures are retained & recognized in an unfunded reserve accountA self-insured plan is in operation
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Common Loss Reduction Activities
Automatic fire sprinkler systemFire walls and doorsTraining replacement personnelRegular training of all personnel
Evacuation plansCrowd control plansDisaster plansSecurity plans