Use it or Lose it

On 8 September 2015 I took the most tectonic decision of my life of quitting my job for my dream sports venture. Initially I was super-nervous as I am in my mid-30s, married with one year old champ, and have a home loan with 15 years of repayment left. But as we say “where there is a will, there is a way” I took the courage to ride these waves and there started my market visits, facility owners meeting, idea presentation in networking events. During one such networking session I met a renowned UI, UX domain expert and I talking to him on challenges and how I can improve the UX of my website. With a pleasant smile he said “In India companies are selling everything using cricket… do you really need to sell cricket in India?”

Three months hence I have met over 81 sports facility owners in Hyderabad, Pune, and Delhi/NCR. My interactions with them were not very encouraging as most of them are working on very thin margins, do not find this business scalable, and are highly exposed to weather uncertainty. This situation was hard to believe in a cricket frenzy nation where the economy literally stops over a world cup cricket match with Australia or Pakistan. But this is the hard reality, this developing business is surrounded by many challenges and uncertainties. Facility owners have their own share of risks, including:

1. Low occupancy rate: Recreation sports in India is only restricted to weekends and holidays. The average occupancy rate of sports facilities is 25%. It’s like an ULIP plan where you invest Rs 100 but you get return only on Rs 30.
2. Limited land availability and high lease cost: Within the city limits high rental cost makes the business unviable and hence city outskirts is the only option left for establishing bigger sports facilities. This further leads to low occupancy rate.
3. Seasonal business: Thanks to monsoon and extreme weather conditions playing outdoors in the month of June, July and August becomes extremely difficult.
4. Unstructured recreational sports industry: The industry is completely fragmented, there is no robust sports facility booking system; booking happens on phone and transactions only happens in cash and hence issue of soiled and fake currency; handling cash is additional cost. Last minute cancellation leaves the facility manager high and dry.

However it is fact that unarguably sports is above all form of recreational activity. There is no product or service which equals sports, when it comes to giving a griping entertainment; adrenalin rush of wining; touching hearts or uniting a nation.

On the contrary to above mentioned facts about sports facility in India, in developed countries like US and Australia, sports is already a big industry and has given business opportunity to millions of people.  With India becoming the fastest growing economy in the world in 2016, there is surely a silver lining for recreational sports business in India.

Since sports facility run on “Use it or Lose it” model, I have tried listing 6 possible ways for sports facility to maximize their revenue:

1. Focus on weekdays: Relying only on the weekend business is not wise, you have to increase the footfalls on weekdays. Hire a sports coach and run a sports academy for school kids at dirt cheap rate.
2. Use Evening hours: If possible install lights for your facility and rent it out in evening hours. (Might not be applicable for cricket grounds as it require sizeable investment).
3. Run Leagues/Tournaments: Yes it require lot of effort and involvement, but it makes sure all your slots are occupied.
4. Make a community: You might be already doing this, a whatsapp group and facebook group will help you build your customer base and retain them.
5. Last minute discounts: As I said sports facility run on use it or lose it model and hence do not shy away from offering discount on expiring inventory. Something is better than nothing.
6. Give ease of booking to your customer: Find a reliable and committed service provider for online booking of your sports facility and partner with them, collect payments in advance, and reducing cost of handling cash. Users now a days prefer to buy everything online with minimal human interaction.

Recreational sports at present is not yet started in India and hence from this point the industry can only grow at exponential rate. We are already noticing the change in the ecosystem, there are lot of new players coming-up in this space. And sports has been regarded as the sun rise sector in India. Let’s thrive and be part of this evolution, let’s “LIVE FOR THE GAME”.