Most sports facilities offer private, one-on-one training, whether it’s in the form of sports-specific lessons for kids, speed training for serious athletes, or personal training for adults trying to get in shape. However, the way these lessons are regulated and paid for varies a lot from facility to facility.
Your own practices probably depend on your business size and the importance of private training to your bottom line. Facilities that generate most of their money from classes or leagues may give their instructors free rein to schedule lessons during facility off-hours, letting them keep all the revenue for themselves as a benefit of employment. Other facilities, such as those that specialize in personal training, make sure every lesson is scheduled, documented and paid for ahead of time, and charge higher premiums for the the privilege of using their facilities. While most facilities fall somewhere in between these examples, the latter structure is better for most.
Many owners underestimate the hidden costs of running a facility and struggle to maintain cash flow because their focus is on the training end of their businesses. Especially if they’re just starting out, they’re willing to give deep discounts to get new clients in their doors. This can be helpful in the beginning, but it’s not sustainable in the long-term. Every time you let an instructor use facility space, you must account for the potential revenue the space could have generated if it were available for other scheduling. That means that, at the bare minimum, you should make sure you re-coup the amount of money that it would typically cost to rent that area of the facility.
A Fair Instructor Pay Split
So, how do you determine the exact rate to pay instructors for lessons? The key is to customize the split for each instructor or trainer, depending on their relationship to you and the facility.
If an instructor is just starting out and is using their affiliation with you to bolster their own career, their commission rate should be lower (around 30%) because they’re taking advantage of the effort you’ve made to establish your facility’s space and brand. If the instructor is already well established and will likely bring a lot of new business to the facility, you should pay them more – maybe 50% of the lesson. However, don’t give more than 50% of the total lesson fee to the instructor. Exceptions can be made for instructors that are so well-known that even a name association will help your brand, but those instances are rare.
Depending on the activities your facility specializes in, the cost of supplies and environment can vary, but they always go beyond the obvious. If your facility offers baseball lessons, for example, you might consider the expenses of the cage, pitching machine and baseballs, but you also have to consider the all the maintenance costs you pay for the facility, such as bills for energy use, scheduling software, web site hosting, and cleaning crew. All of those costs come out of your pocket and need to be reflected in the price of lessons.
Also, don’t undervalue the work you’ve already done to create and maintain your facility’s brand.
You’ve likely spent money on efforts to brand yourself and attract new clients. You probably paid someone to create your logo, and you may have run online ads (such as Google Adwords), print ads, or even hired a professional marketing service. You’ve also spent your own time and your staff’s time going out to events and developing relationships to get your businesses name out in the community. Contractors that use your facility for lessons benefit from those efforts by associating your brand with their services.
Ask yourself: If they didn’t come to your facility, where would they go?
Take Charge of Lesson Scheduling
When you allow instructors to schedule their own lessons, you lose valuable marketing data about the clients who are using your facility. It also makes it difficult to track whether or not those clients have approved updated waivers and have current emergency contacts listed. This type of information is essential, and not having it easily available can put you at risk legally (which is why the scheduling software I developed for sports facilities is set up to require waiver approval by clients every time the waiver is changed). Finally, when lessons happen outside your control, you don’t have full access to data on which types of programming happened at which times. This data is extremely valuable for analysis purposes for your business.
eSoft Planner lesson scheduling software lets you set up all employee commissions so that the instructor’s pay is generated automatically as they teach lessons. Call me at (513) 791-4940 if you’d like to discuss how it works.
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