Have you ever had to put your own money in to running a club team or sports program? Do you ever feel you get hit with random expenses you weren’t expecting?
Nobody wants to pay more than they expect. But if you don’t pay attention to the fine print, this is exactly what can happen to your travel team.
Every season, teams spend hundreds of dollars on items they had no idea they were being charged for. Coaches and administrators get upset. Parents start to lose trust. This is not good for anybody.
We are not implying that these hidden expenses are a mistake. But they fly under the radar and sneak up on you when it comes time to pay your bills.
As you put together your team’s budget for the year, be sure that you account for these three hidden expenses. One of your budgeting goals is to be accurate so you must consider these sneaky surprises. This will help ensure that at the end of the year you are not in the hole and in financial stress. The players and parents get exactly what they expected. Your program benefits from hitting your numbers and building trust.
Credit Card Fees
You know that when you buy items with a credit card, the card companies are going to take their piece of the pie.
But often overlooked is when you are taking credit cards for payments and then have to give away a piece. With the card fees, processor fees, etc. you could be looking at a 3-4% loss in revenue. This can add up.
Consider our program. We have about 100 kids in the program. If they are all buying something for $100 that means about $4.00 is going to the card company on each sale. With 100 kids that turns in to $400 that we have to consider.
Whether you are adding it to the top line or putting it in your expenses, make sure you factor this in to your budget.
Consider this: it is less convenient but you can require payment by cash or check. It is more work (and trust on your part) but it can save money on fees.
Hotel taxes and Resort Fees
Every hotel is going to charge sales tax. This is a no brainer.
But did you know that there is also hotel tax? Or that hotel tax can change even in the same city? Did you know that on top of taxes some hotels also charge a resort fee?
They add up…FAST! And if you aren’t ready for them they will leave you much poorer in the pocket book.
Sales tax plus hotel tax (and other taxes) can sometimes get to 19% depending on where you are staying. Resort fees can go as high as $25 per night. But often, these taxes and fees are not included in the room cost in advertising. Be sure you dig in and understand all the hidden expenses.
Here’s an example if you book 5 rooms for 3 nights in Las Vegas. If the rooms are $100 each the base cost is $1,500. But then you have to add in taxes and the resort fees. At 15% the taxes are $225. If resort fees are $10 per night that is another $150. The hidden fees end up at $375.
Your actual room cost is $125 per night. A big difference from advertised pricing and something you need to get in to your budget.
Here’s an article on Resort Fees from the Huffington Post. You should definitely read these bonus tips on building a relationship with hotels. Click here for that article.
When A Player Does Not Pay
Sometimes, hopefully rarely, you will have a player decide they are not going to pay their bills. This one is tough because it is a lot of money but is also a relationship with a family.
We always recommend having someone in charge of bill collecting. We also recommend putting in measures to keep this from happening.
Yet, if a “no pay” happens, you must prepare. Especially if you are a new program or team. If you don’t have the funding to cover this situation it could put you out of business. The last thing you want to do is go back to a bunch of families and ask for more. They have already committed to a price. Changing the deal is bad business.
To prevent this, add a contingency item to your expenses. Calculate the amount based on the cost of a player not participating. Also factor in the amount of extra work it may take to find a replacement.
For example, if you put four players in a hotel room that costs $120 per night, then each would contribute $30 per night. But if a player “no pays” you will be $30 short per night. You can do this with all expenses.
Then there is the cost of trying to replace that player. These costs may not be obvious but they should accounted for. They include the time you spend finding, contacting and setting up a new player. This is time you could be making money at your regular job. Do not discount the value of your time! It is the most important resource you have.
When you get to a final “no pay” number, add it to the total expenses.
Hopefully you won’t need the extra money. If you don’t, save the extra money for next time. You won’t need to factor it in the following year. But if it does happen, you are prepared.
The Best Budget
By paying attention to hidden expenses like credit card fees, hotel taxes and non-payments, you can dial in your expenses and produce the most accurate budget possible.
We know that things always come up and no budget is perfect. But by seeking out these details, you can get much closer to the real numbers. This will give your families a better experience. And will give you peace of mind.
But That’s Not All
Certainly these are not all the hidden expenses in travel sports. Do you know of other hidden expenses that can sneak up on you?
I would love it if you shared them with everyone! They would be a great addition and you will be helping others in the same situation.