5 Hidden Costs to Starting a Sports Facility

Running a sports facility is more than meets the eye. It certainly can be a dream come true for a passionate coach or sports fan, but you better be prepared for all the hidden costs before jumping into facility ownership.

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Put yourself in this scenario:

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Your dreams are beginning to take shape. You’ve purchased the land, finalized the lease, or put the finishing touches on the renovations -  but wait… insurance, property taxes, internet, heat, and the list goes on and on… 😣

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To avoid getting caught off guard by these expenses, we’ve put together a list of the five biggest hidden costs to owning your own sports facility:

1) Equipment ⚾

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Sure, you’ve priced out everything from netting to balls, and even the cost per use of running an expensive piece of equipment like a HitTrax. But what you might not have considered is the day-to-day cost of maintaining the equipment. 

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Let me explain.

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Your big purchases have high maintenance costs, ie. hundreds of dollars in zip ties to extend the life of your cages and the eventual investment of entire new netting. Now those pesky small purchases, the balls, buckets, lids, chairs, stools, etc, anything that is getting daily use - those are bound to break down and need to be replaced. Or worse, they’ll get stolen (or “go missing” 🤦) 

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Yes, even in a wholesome and safe community, equipment will go missing. Working with hundreds of sports facilities at Swift, we routinely hear from our baseball facility owners that they budget hundreds of dollars a month for new baseballs simply because they’ll go missing (or get damaged quickly). Two facility owners share a helpful budgeting tip for baseballs below 😅

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The same is true for tennis, basketball, hockey, or really any sport that has small easily misplaced equipment that also takes a beating in the day-to-day operations.

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A clever trick to keep balls from going “missing” is to stamp them with your facility's logo. While this might not put a full stop to these growing legs and running out of your facility, it might make kids think twice before shoving them in their bags. Even if they do, there is a subtle marketing component to be gained here as one facility owner pointed out:

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Other owners have mentioned a check-out system with equipment at the front desk where members will leave their membership cards to sign out a bucket, a bat, etc. - giving the front desk staff a chance to check equipment for damage or missing items before the participant leaves.

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If you’d like to connect with other facility owners, Swift is proud to be the recommended software provider by this Facebook group's admin and creators, which includes 3,200+ members. Join here to learn more about facility ownership.

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2) Insurance 🗄️

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Depending on your location and setup of the facility, you may be required to set up multiple types of insurance. We typically see our facilities purchase blanket coverage in case a parent or athlete is injured.

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In states like Florida, you might also need to purchase environmental insurance for your property in case of a natural disaster, not something at the top of your mind when starting an indoor facility.

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While insurance adds an extra layer of protection for your business, ensuring athletes sign a liability waiver is one of the most important steps you can take to protect your business from high premiums.

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Using software like Swift can automate the waiver signing process by ensuring every athlete coming through your doors has a signed waiver on file. If you need a liability waiver you can check out our free liability waiver template to protect your business.

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3) Energy, HVAC & other utilities 🔌

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You might be lucky enough to take over a current facility where you have a good gauge on the month-to-month utility expenses. But as a new facility, and even more so a new build, you’ll be surprised how quickly these figures can skyrocket.

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It’s not just for lack of good mathematics. It’s also a procedural problem. Kids leaving the lights on in the bathroom, a staff member forgetting to turn off the fan before leaving for the night, or running the heat over a long weekend. These innocent mistakes can end up costing you thousands of dollars over a year.

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Negotiating the best deal for all utilities from internet to hydro may be an initial headache but your bank account will be thanking you in the future.

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Further, to avoid lights staying on overnight or other equipment inflating your utility bills, consider purchasing remote-controlled power outlets/light bulbs. You can purchase hundreds of these on Amazon at pretty affordable prices. They will give you some peace of mind when you can turn off all equipment and lights from the comfort of your home - saving you your hard-earned cash.

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4) Credit card processing fees 💳

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Regardless of the point-of-sale device or online booking system you are using, a small chunk of your revenue will be taken immediately out of your pocket because of credit card processing fees

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These fees can vary from card to card, with American Express usually taking the largest chunk. More modern solutions like Square and Stripe charge the same rate for all major credit cards but can vary depending on the type of transaction being processed. Subscriptions or recurring monthly charges (ex: for memberships) can tend to have larger processing fees than one-off payments.

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When all is said and done, the fees average out to somewhere in the 2.5-3.5% range. If you don’t take this expense into consideration when building out your sports facility's cash flow, you could end up cutting deep into your profits.

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Just to hit this point home, on a per-transaction basis this percentage can seem insignificant. But as a business owner generating hundreds of thousands in revenue, a small change of 1% can be significant.

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Let’s break it down:

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One way to migrate lofty processing fees is by taking cash or cheque payments from large team rentals by using online invoicing. Teams, who generally are blocking off large chunks of time at your facility, are likely accustomed to quarterly or even yearly payments as they align with their player fees.

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For a single large team invoice of $10,000 by using Swift’s online invoicing you’ll save yourself hundreds of dollars.

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You can also consider accepting direct deposit or ACH as a payment option which has much lower fees (in the range of 0.5-1%). Especially for subscription-based payments (ie. memberships), demographics in certain locales might actually prefer ACH over credit cards.

5) The extras 💸

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Getting your facility off the ground and running is just step one. As you continue to grow your clientele, so will your budget for extra amenities and well… problems 🫢

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As we’ve discussed, equipment will break, the heat will be left on, and you’ll get dinged on your online payments… but then there’s also the budget for cleaning supplies, security, snow removal, garbage disposal, etc.

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Many of these “extras” are quite cheap or even free upfront when you’re a new business owner. Why hire someone to plow your entrance walkway when you have the time to do it? Now as you grow and you want to spend your time coaching or doing higher ROI activities, you might outsource these activities. Maybe paying a local high-school kid to come and clean the bathrooms weekly, or pay for a professional cleaning service.

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To prepare for these “extras”, and invest in the growth of your business you should consider putting aside extra cash each month. You can dip into this fund as new problems arise, or utilize the cash for a quick investment in new technology.

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One thing we all learned as small business owners from COVID-19 is the benefit of an emergency fund. I remember the facility I was managing at the time spending thousands of dollars out of nowhere on disinfectant spray, disposable masks, and professional cleaning services so that we could keep our doors open.

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Fingers crossed we won’t ever experience another global pandemic, but we can be better equipped for even minor inconveniences like a broken light.

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Be Prepared for the Unexpected 🫡

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There you have it, 5 hidden costs to running a sports facility. We hope this article will make you more informed and ultimately understand the benefits of spending a little upfront time planning out ways to save your business money.

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Before you leave, we have one bonus tip for you:

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✨ BONUS: Facility Management Software Fees ✨

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Okay, before we go we’d hate to leave this one out. At Swift, we talk to sports facility owners daily. Time and again they complain about their scheduling and management software coming bloated with features, hidden fees, and long contracts.

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As a new facility owner, you might get seduced by software that offers a “$0 subscription fee” only to become perplexed when your revenue is falling thousands of dollars short of what you expected. That’s because they’re taking north of 3.5% in fees on top of close to $3 per card transaction. This means that even as your business grows your software fees keep growing exceptionally. While the promise of “We only make money when you do” is catchy, in practice it turns into “We make money every time you do.” Not a pretty picture 🤦

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While you can alleviate some burden of these payment fees by passing them onto the customer, there are serious implications to consider. For example, in some parts of the US, it is illegal to pass on processing fees, and in others, there is a maximum percentage allowed. From a brand image standpoint, you may deter some customs from booking online if the fees are passed on. There is a real psychological component to purchasing a $30 service only to find out it is $33.96 (3.9% processing + $2.79 card fee) before tax is even applied.

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Let’s illustrate this hidden cost by using a facility that strictly generates revenue off of membership to keep things simple:

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You read that right. You are paying a total of $20,736 for software.

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That’s why at Swift we offer simple and transparent pricing with plans starting at $179/mo accompanied by no annual contracts, a 30-day money-back guarantee, and software built specifically for the demands of sports facilities. 

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Let’s do that same breakdown as above for Swift to illustrate the cost-saving benefit.

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With Swift, your total on software comes to $15,468 saving you a ridiculous $5,268 in your first year alone.

If you're ready to save thousands of dollars per year and hours of your time, book a demo today with a member of our team.