Carnival cancellation and ramifications for IOC

Shocking news out of Brazil, they have cancelled the Carnival celebration this year. 

I can't but imagine that this will be a very unpopular decision with the locals. With the amount of money that has been allocated, spent and consumed on hosting large international competitions, they must be feeling pretty angry. This last summer is preparation for the World Cup there were protests against the massive spending on stadiums in remote areas that will probably not be used again. Add to this the fact that Brazil has struggled to upkeep their own economy and infrastructure and there is a recipe for disenchantment. 

I wonder what this means for the IOC, FIFA and others; they have chosen locations that have not been able to handle the large price tag and development that accompanies the events. Russia spent billions of dollars on hosting the games that will never be recouped. Brazil had the opportunity of hosting the two largest events in subsequent years, but even that task is too daunting. 

The bids for the events amount to billions, but where does the money come from and at what cost? The money is not about erecting facilities for the events, it has to include roadways, parking, electrical and sanitation infrastructure on top of the facility construction. If these additional investments are overlooked the results are obvious; the locals have to foot the additional spending on resources they won't be able to use and their sacrifices are generally not appreciated by their government or others. 

The end result is what is happening now, the government is stretched so thin they don't have the capacity to fund their own national events. And who does this effect? Certainly not the IOC, who will have their games, but the locals who will be left to pick up the pieces and hope that they will be able to pay back the debt some day. 

Thinking long term, what are these large bodies going to do? They want to expand the reach of their games and include new host counties, but the cost of economic disaster can't be worth it. Their will start to be increasing opposition to the games and who is chosen to host. In order to maintain and increase the goodwill they have lost, they are going to have to find a way to make hosting the games more sustainable. I, for one, hope they do. 

http://www.businessinsider.com/brazil-canceled-carnival-2016-1

Data use in the fitness industry

As industries are using data, analytics, models and aggregating information to better understand their customers, is the fitness industry next?

 

Can data help the fitness industry be more profitable and create better value for their consumers? Many argue yes. By reviewing journals and customer information, managers can make better decisions regarding their client base. We know that the majority of members choose a gym based on the location to their home and work. Knowing this, how can you market to appeal to a greater segment? Or, perhaps you have already done this and now you want to know how close to the club your members live or work. Looking through demographic information can help you understand that question.

 

What other possibilities exist for using data in the fitness centers? Things like equipment use, traffic, packages, and retail sales are all potential items. As are personal metrics like visits, goals, weight lost of performance metrics improved. Having a data base to enter this information and then showing the members how successful they have been is a great way to improve engagement.

 

Utilizing data to make decisions is here to stay. If you haven't thought about what you can look at in your gym, now is the time to start.

 

 

http://www.athleticbusiness.com/apps-software/data-mining-the-health-and-fitness-industry.html?eid=277204494&bid=1283932

Rams stadium impact

The ongoing discussion of football stadium economic debate continues. On one hand the stadium owners claim that they generate additional revenue to the region and that ticket taxes, or payments per ticket sold, effectively contribute to the local coffers.

On the other hand, there are economists and local officials who say that the numbers do not accurately portray the true state of affairs. They say that the revenue that stadiums are claiming is actually coming from local money that would have stayed in the area anyway. They also argue that while the stadiums bring people in, it can cause traffic issues and local residents to leave.

No matter what side of the fence you are on, it is clear that the large stadiums and accompanying amenities are here to stay. As stadiums continue to expand there will surely be more studies that seek to better understand the financial relationship between stadiums and communities.

http://www.athleticbusiness.com/stadium-arena/some-economists-downplay-impact-of-new-rams-stadium.html?eid=277204494&bid=1278202

Fitness social media use

When you own a business, or even if you work in a client services role within a business, it is important to stay up to date of technology. The impact of technology is dramatically changing a lot of industries and those that are able to understand and capitalize on those changes stand a better chance of being successful.

 

These two fitness professionals were able to explode their business and generate a lot of revenue by simply utilizing Instagram as a means to share content and connect with like-minded people who then became clients. This simple strategy helped them to build a complete business model around their profiles.

 

The simplicity of this plan means that most people who interact with others have the potential to generate income by becoming more proficient on social media. Take the time to learn about the brand you want to have and the clientele you want to have, then execute it.

 

http://www.athleticbusiness.com/web-social/building-body-and-brand-instagram-impacts-fitness-industry.html?eid=277204494&bid=1261796

 

Stadium revenue

Great little article out of Pittsburgh that is looking at the revenue generated from the three sports venues to the city. The study shows that the direct financial impact has been 102 million dollars over 5 years. But does that tell the full story?

 

As is usually the case with numbers, economics and projections, the answer is not really. The study was commissioned by the city to assess to revenue generated from the facilities. The study did not address a return of investment of the city’s direct contribution to the projects or the opportunity costs of the facilities.

 

When the picture is enlarged, it tells a different story. The direct impact is 102 million. But the facilities are subsidized by tax dollars. The real estate that they sit on is tax exempt, so there is no property tax being collected, the opportunity costs of previously existing structures or other tax paying entities is also not discussed. So, what is the actual net financial impact to the city for these facilities? We don’t  have that answer. 

 

The point to remember with numbers is that they can be used to reinforce one perspective, which seldom gives the global picture. Ask questions and dig deeper to get the real answers.

 

http://www.athleticbusiness.com/stadium-arena/revenue-from-sports-venues-flood-city-coffers.html

Fitness member survey

A new survey of the fitness industry was released looking at what factors customers cared about in regards to their fitness center. The survey was of current members at some franchise chains, but the results look like they are probably representative as a whole. 

 

Gym members are always concerned about price and perceived value. The quality of the equipment, the cleanliness of the facility and the expertise of the staff are important to members. If you own, work in, or consult with gyms, then these areas are important to focus on. Equipment upkeep and cleaning are what a lot of members are concerned about in their gym. Training the staff to understand this is an important process for customer retention.

 

What is missing, is whether this is true for niche gyms and studios. Does the clientele of those gyms care about the same things, or are their concerns different?

http://www.iclubs.com/news/health-club-customer-satisfaction-report-released.html

 

Small business accounting

I have been working with my wife’s business to get a handle on financials and her business is similar to so many other small business; the owners have a skill and know what they want to do, but don’t always understand using financial information to guide decisions. 

 

In an effort to be more helpful, I have been reading books on accounting and finance to brush up on my understanding. The good news is that the concepts are pretty straight forward, the bad news is that they are time consuming and the resources in a community may be hard to take advantage of as a small business owner with limited time and money.

 

The most important concept is making sure that the enterprise is profitable (more money coming in than going out). Keeping this principle in mind makes things a lot easier. There are various ways to make this happen such as increasing revenues, decreasing expenses, or a combination thereof. In order to make this process more manageable you have to know where your money is coming from and where it is going. Using software or reviewing your bank account weekly can help identify the trends. Once you have a process to identify this, you can start creating categories to file your revenues and expenses under. These can be rent, loan payments, customer invoices (accounts receivable), credit from suppliers (accounts payable), etc. Marking how much is brought in or paid out in each category will then improve your budgeting and decision making ability.

 

Once your system can collect the information you need, you can start to put it into action. How quickly do you collect money from customers? Immediately through point of sale or delayed through invoicing? How much time are you given to pay your bills to creditors? Immediately? 30 days? Longer? How much does it cost your business for each service or good that you sell? What is the profit margin? How many services/goods do you need to sell in order to pay your bills?

 

Taking the time to look at what your business is doing and analyze the data can be a daunting task, but the ramifications of not doing it is far worse. As a small business owner, you need to bring enough money in to pay bills and contribute to your family. Working with a professional or learning on your own to make better decisions based on the numbers is a great way to ensure long term success.

 

It can be expensive to work with certain professionals, and you may not have the cash necessary to do it, but look for other opportunities in your area; the Chamber of Commerce may offer classes or consultants that can help out for little or no charge. If there is a college, you may be able to forge a relationship with the professors to get students to help you out for class credit. Or, the bank may offer educational programs to help get you started. No matter what avenue you choose, learning to make decisions based on financial numbers and goal setting can help keep your business operational.

 

 

 

 

Facility naming rights

When it comes to attracting naming rights for your facility, there are a lot of factors influence the final price. The most obvious is the size of the sports team or franchise. The larger the team and the organizing body the greater the potential audience, and by extension, potential customers. So, larger, professional teams and franchises will get the top dollar for their naming rights. Some other factors are the market size, facility, and timing.

 

The market size is another one that makes a lot of sense. A larger market will potentially attract more fans and more people will see the signage and the supplemental activating advertisements than a smaller market. A newer facility is worth more than an older one in terms of naming rights. The newer the facility the more amenities and focus on technology that can be used to improve activation of marketing promotions. The market timing is interesting. Depending on when you solicit bids for naming rights has an effect on what you can get. When the business or the economy is doing well they are more willing to invest in naming rights and competition may be higher which increases the final contract.

 

http://www.forbes.com/sites/prishe/2015/06/21/8204/?utm_source=followingweekly&utm_medium=email&utm_campaign=20150622

Starting a fitness business

If you are interest in being an owner of a fitness facility, or other business for that matter, take the time to work out the costs. This owner spent 3 years researching his plan and spent $145,000 before construction!

 

Owning a gym costs a lot of money to get up and running, partly because the equipment is so expensive. There are deals out there and financing is available, but it will still not be cheap.

 

I wrote a proposal recently for a small fitness studio with few amenities and my estimate is $140,000, and that does not include construction costs. The point is that owning a gym will take a lot of start up money and in order to be successful you need to do thorough research.

 

http://www.iclubs.com/featured-writer-blogs/wanna-open-a-fitness-club-here-s-what-it-takes.html

 

Management tips

If you are a manager, or aspire to be one, then you need to invest in yourself. Constantly learning and seeking to improve will help you reach your full potential. Entrepreneur put together a list of tips for managers. It is a quick read and worth the time.

 

Some themes emerged throughout the 32 pieces of advice from small business owners and can help you lead your own team:

1.       Hire good people, communicate clearly and empower them to perform at the highest level. When you have great people on staff who are encouraged to be their best, they will be. Just make sure that they know what they are aiming for.

2.       Watch your dollars. Business is about making money and controlling expenses. Make sure you understand where your business stands.

3.       Respect. In order to get respect, you need to give respect; to your employees, customers, suppliers, etc. When you respect others, they will return it.

 

While these are the themes, there are many other pearls and nuggets of wisdom that can aid you in achieving greatness.

 

Take a minute and read the article. Be prepared to be inspired!

 

http://www.entrepreneur.com/article/234199

 

 

Lawsuits against fitness centers

The following article highlights the importance of both facility maintenance and participation waivers.


The individuals in the article were hurt on the premises of a fitness center and sued the facility for their injuries. Both fitness centers had the participants sign a waiver shielding the center from liability. The outcome of both cases was to rule in favor of the participants and that the fitness center was liable for their injuries.


Part of the problem with the waiver is that it is too broad to protect the fitness center. The waivers need to be much more specific when discussing the inherent risks of physical activity. The other reminders is that a waiver does not waive the duty to provide a safe environment. Make sure that their is a written procedure regarding equipment checks and facility cleaning and that any issues are documented accurately. When something is worn, take steps to address it in the form of fixing it, removing it from use or a sign warning of dangerous conditions.


Your waiver may protect you if it is properly worded and the participants are aware of the risks involved with their participation. Showing that equipment is checked and the facility is cleaned will also demonstrate your willingness to ensure participant safety. Don't wait for something to happen before you address it. Perform routine checks on the facility and the equipment.


http://www.athleticbusiness.com/civil-actions/examining-membership-agreement-language-in-ymca-lawsuit.html?topic=3,300&eid=277204494&bid=1067635

Porter's 5 factors

I recently read Michael Porter’s 1979 HBR article on Competitive forces. It serves a great reminder of all the factors that can affect the business, and that a strong business takes into account the relationship of all those factors.

 

In quick summary the 5 factor model encompasses threat of new entrants, bargaining power of customers, threat of substitute products or services, bargaining power of suppliers and the current state of the industry including competitors. A pull or push from any of these directions can throw the business out of alignment. In order to hedge against the uncertain future, the business needs to constantly monitor to their environment.

 

Ongoing success lies in understanding the current state and planning for the future. This can be done in any number of ways. As Porter points out this can be done by creating strong relationships with buyers, entering a new technology partnership and differentiating the product through marketing. However, these are just possibilities, any number of areas can be effective for increasing or sustaining market share. Each possibility means that the current and future landscape needs to be assessed and understood when formulating the specific strategy.

 

A failure to accurate assess the landscape in any of the factors can lead to a loss of business or position. In the current business climate with so many niche companies not taking the time to survey the competition in close fields can lead to a deterioration of the existing customer base. A lack of attention to suppliers and buyers can mean that costs creep up and profits erode, or that the product is not in line with current trends.

 

The interactions on a company are many and understanding each of these factors can lead to ongoing business success.

Ivory tower marketing

If you are having trouble with your marketing plan it may be that you are not in touch with your target audience. If you do not engage in ongoing communication with your customer base, how can you meet their needs?

 

Running your marketing plan without getting to know your customers is not the most effective way to reach them. Sure, it may work in the short term, but it will not generate the interest and ongoing loyalty that is vital to growth and success. You may be one of the best in your fields, but if you lack the relationships with your customers then they will not purchase from you. Getting out and interacting with target audience where they are can help you gain a deeper understanding of their habits. What are the similarities in their purchases? Do they shop at similar places? Do they move in similar social circles? Where can you engage with them?

 

The best way to get to know your customers is to talk with them. If you show an interest in them they will respond in kind. They will know that you care about them as a person and do not look at them as a customer and just a source of income.

 

If you run your marketing from an office and rely on your perceptions of what your target audience wants, it can be seen as fake. People know when they are being talked at rather than being talked with. Marketing should be a conversation with your audience based on listening to what they want and need and offering solutions. If you are telling your potential customers what you think they want you could be missing the boat completely.

 

Take the time to interact with your base and really get to know them. Taking the time to nurture relationships will pay dividends in the long run through effective marketing, brand loyalty and referrals of new customers.

Negotiating

Global Finance issued a chapter on 'Negotiating, Valuing and Structuring Winning Deals' through its partner, Merrill DataSite.


The chapter was written from the perspective of experts in the field of negotiating Merger and Acquisitions deals and discusses their key insights into making the process successful.


The main takeaways are perform due diligence, listen, maintain open communication and keep the end in sight.


Prior to negotiating, it is important to research the issues, understand positions and have an idea of who you're dealing with. Getting to know the other side prior to the meeting can give you an idea of their history and motives. This knowledge can give you an advantage in knowing what is important to them. You also need to know what is important to you; what will you compromise on, what won't you? Knowing this beforehand can set the framework for the ongoing conversations.


The key to a successful, mutually beneficial, negotiation is rapport and building a relationship. Take the time to know the other side and listen to them when they talk. You may learn what they are really after, what they are concerned about and what their vision for the end result is. Align your motives with yours and the chance for hard ball decreases.


Maintaining an open line of communication is vital in negotiating. It is not beneficial to shut the other side out and try to our maneuver them. While this may work in the short term, it will damage the long term relationships of those involved. If you don't know the answer to something, or the topic is outside your specialty, look at asking others and form an honest opinion of the information.


The main goal of negotiating is to reach a conclusion. Each side may have a different end goal in mind, but negotiating is a way for both parties to be happy. understanding that both sides want to resolve the issues at hand and reach a deal can keep things in perspective.


The next time you are negotiating try these tactics. Try to remain calm and present your case and listen to the other party before making any final decisions. Working together often leads to greater solutions.

Growing a customer base

The ability of a business to develop a strong customer base will determine the value. The businesses that have more accessible, readily engaged customers were more likely to perform well in mergers and acquisitions. Now, this is considering those businesses that were bought by others, but the lessons can be transferred to others.

The brand recognition and brand value has been less important in the past few years than the ability of that business to have a strong customer base. The more these customers and potential customers can be converted into sales leads to the growth of the business.

In order to be a successful company, identify the customer you want to reach and determine what their needs/wants are. Then create a product that meets their needs, communicate with that customer and engage with them by demonstrating your desire to meet those needs. The customer will reward with the basics of business: sales. Business comes back to relationships. The better you establish and grow a relationship over time will result in a strong, stable customer base.

https://hbr.org/2015/04/why-strong-customer-relationships-trump-powerful-brands

Business planning

If you are interested in starting a company, congratulations! Owning a business is a dream of many, but unfortunately a lot of business do not succeed. Turn the odds in your favor by taking the time to read this, and many other, articles on planning for your business.


It takes a lot of thought, research, hard work and relying on others to get your business started. When we started my wife's business, we did not realize how many little things have to be taken care of. Take the time to really analyze your idea and whether or not it can be successful in the area you are thinking of. If not, what will make it more successful? If you take a step back and look objectively at your idea, it can reveal new opportunities and morph into something that you hadn't thought of before.


The more you plan and prepare beforehand, the better positioned you will be to be successful. The next step is the ongoing evaluation of your business. This is another part that takes a lot of time to think about, but is critical to your success. You have to review your books to understand what your revenue and expenses are. You probably have a website and a marketing plan so you need to know how effective they are in achieving their goals (engagement, likes, shares, purchases, appointments, etc). You also have to deal with taxes and what is the best way of handling them.


All of these tedious behind the scenes details do not seem glamorous, but are crucial if you want to succeed. The more you understand the better you'll be.


http://www.athleticbusiness.com/fitness-training/optimism-meets-reality-when-opening-a-health-club.html?topic=3,300&eid=277204494&bid=1043599

MLB valuations

If you have ever wondered how professional franchises are valued; this article will give you some insight. There are a number of factors that are reflected in valuations, but the main one is broadcast rights. As this article points out, baseball is very lucrative at the local television level and can draw viewer interest and sponsorship dollars.

Of interesting note, is the fact that baseball franchises have been increasing in price above the stock market. Sports have been considered recession proof, and it would appear that there is some truth to that.

http://www.nbcnews.com/business/business-news/audience-aging-shrinking-baseball-more-valuable-ever-n336496

 

Recruiting = Success

Money may not be able to buy happiness or Championships, but it can get you into the NCAA tournament.

 

Over the past few years, those who spend more on recruiting have more berths than those with smaller budgets. Big spending does not guarantee success once he tournament starts and some successful teams have small budgets.

The rising cost of recruiting dollars is used to fund Nationwide trips with University planes and transportation. Larger schools have the advantage because their budgets are larger and it can allow them to access all parts of the Nation. Smaller schools have to utilize a different approach, by travelling regionally and possibly using one trip to see more than one recruit. Instead of going after the top tier players in their sport, they may focus on players they have a chance of recruiting who can benefit their program.

 

Obviously, there are numerous factors that go into the success of each team, it is just interesting to see how recruiting dollars are reflected in attendance.

 

http://www.athleticbusiness.com/college/recruiting-dollars-equal-ncaa-tournament-invitations-br.html?topic=1,300&eid=277204494&bid=1032112

 

How effective is social media?

If you use social media for marketing, do you know how effective it is? Chances are, it is not as effective as you want it to be.

 

The main goal of business is to create sales and generate revenue. Your marketing plan should be set up do just that. Most consumers expect that businesses will have a easily navigable website and social media presence, but putting a lot of marketing dollars toward that may not be the best use for those dollars. 

 

Any marketing plan and campaign should be evaluated for effectiveness. Knowing how many sales or new customers are created for each campaign is vital to see where your consumers are coming from. When posting content and ads via social media, the same applies: how many potential customers did it reach, of those, how many were converted into actual customers, how many new customers were created and how much did they spend. Knowing the answers to these questions will help to evaluate the effectiveness of your various campaigns.

 

Social media is an easy way to reach your current customers and creating content can be effective in setting your brand apart, but be wary about thinking that it is the golden marketing ticket. Only by evaluating the effectiveness of your platforms can you truly tell how beneficial they are in generating revenue. And revenue is what pays bills.

 

https://hbr.org/2015/03/is-social-media-actually-helping-your-companys-bottom-line

 

When Little League becomes Big Business

The Little League World Champions will have to forfeit their title after an investigation discovered that the team was drawing players from outside its geographic boundaries.

 

Presumably, in order to field a stronger team, players from different districts were recruited to play for the team. This decision has meant the loss of a title to the youngsters who actually played the game to achieve it.

 

When did Little League become such a big business? Or, when did youth sports in general become such big business? From a sports medicine standpoint we want to encourage young individuals to play many different sports form a young age in order to instill healthy habits and foster a lifetime love of activity. Now, athletes are being pushed to specialize at a young age, they are not playing other sports so they don’t fall behind their peers and they are facing a lot of pressure to succeed at a young age. If they do succeed they get compared to adults and people wonder how great they will be when they make the pros. Unfortunately, a very small percentage of individuals go on to play professionally. Perhaps some of the reasons for not continuing are a hitting an early ceiling. If you play one sport and work on only that sport you reach a point where it becomes harder to improve. If you peak early you will great as a youth, but mediocre as a high schooler. It may be that playing that one sport used to be fun, until it wasn’t. The pressures just weren’t worth it any more so they walk away.

 

From a business standpoint, parents have money they are willing to spend on equipment, club dues, coaches, camps and training. Each of these areas wants a slice of the economic pie and the justification is that they are willing to pay for it. We all want our children to be successful and do the best they can, but we also need to recognize that they are still children and need support, guidance and encouragement from parents.

 

With the amount of money being spent on youth sports, you can bet this will not the last violation in order to succeed. Let’s just hope that the ones who do succeed, do so for the right reasons.

 

http://www.athleticbusiness.com/recreation/little-league-champs-stripped-of-national-title.html?topic=4,100&eid=277204494&bid=1011296