November 14, 2006 in Tips, Economy
One interesting way to define your hattrick team budget for the coming seasons is the Income Statement, which offers a good overview of Revenues and Expenses and allow to understand the balance of the items that constitute the economy of your club.
Revenue:
Sponsors, Crowd, Prize Money, Yearly cards, Players Sold (incl. Youth Pulls)
Expenses:
Salaries, Stadium, Youth Squad (maintaining and pulling), Staff, Players Bought (incl. coaches)
Laying down numbers:
Preparing your budget can be done both for the past seasons or in prevision for coming seasons, to review what has happened in the past and what will most probably come in the future.
example of previsional budget for a mid table division 2 club, without any specific attention on the impact of transfers or exceptional expenses. Numbers are in kEUR
Revenue
Sponsors 3680 (=230*16)
Crowd 3000 (=350*8+200 league+cup)
Prize Money 0
Yearly cards 84 (=30*2.8k supporters)
Players Sold (incl. Youth Pulls) 0 (balanced with players bought)
Total Revenue 6764
Expenses
Salaries 5600 (=350*16)
Stadium 800 (=50*16)
Youth Squad (maintaining and pulling) 352 (=2*16 + 20*16 pulls+maintenance)
Staff 800 (=50*16)
Players Bought (incl. coaches) 0 (balanced with players sold)
Total Expenses 6752
TOTAL INCOME 12
Analyzing the numbers:
First, the total income figure should be positive otherwise you are spending more than you are getting. Then it is intersting to see the relative importance of the different numbers.
Importance:
Salaries are in the above example the largest of the expenses (83%), this seems to justify the whole purpose of this article, as you will need to cut it down first. Stadium and staff should also be managed properly as they have an impact.
In terms of revenues, sponsors and crowd are the most important share, and therefore you should look forward to maximize those by having good results in your division and trying to move up in the divisions. Prize money can also be interesting, however, you should be careful as that kind of income is not certain, this means that the result of a previsional income statement includes a certain volatility.
Volatility:
In order to have a good budgeting exercise, you should remain on the safe side and minimize the risks of overestimating your revenues and underestimating your expenses. As a good rule of thumb, choose from your past experience low values for sponsor, crowd and prize money which are the most volatile aspects (transfers left aside).
Once you have those elements in place, you should have a good view of what you can expect in terms of revenues and what aspects you need to optimize.
your analysis does not calculate training profits into the economic situation. after getting a solid stack of cash, which should be enough to pay your team for at least a season, you can start raising your wage above this limit you described, the losses are equalized with the training profit later.
Comment by fundi42 — May 11, 2007 @ 4:44 pm