new business idea

[Bern_uk]

[FONT=&quot]What do you think of a company providing high stakes skill based [/FONT] [FONT=&quot]sporting tournaments (either 100, 50, 25, or 10 contetants) [FONT=&quot][/FONT]the registration fee would vary starting at £25. Tournaments would be held in leisure centre, golf course, sports clubs and conference rooms.

i.e, 100 contestants paying £25 registration fee, winner gets £1,000.

The tournaments would range from scoring a basketball from the half way line, to hitting a golf ball into a target 150 yards away, to hitting the darts bulls-eye 3 times with the fewest number of darts, etc...

Website would be front end to the business containing a tournament databse and where payment for registrations would be made.

Tournament team would include officials, security and surveillance. [/FONT]

.........
Your thoughts please.
Regards, Bern

 

[akirk]

I think that there is an issue in the maths...

- you need lowish numbers of people taking part so that they feel they have a chance of winning
- you need a lowish entry fee so that people don't feel that it is a big investment
- then the total income is not going to make you any money...

100 people at £25 = £2,500
prize of £1,000

difference of £1,500

costs to run event / run website / advertising / people to run it / other overheads / etc.
I can't see it making any money.

if you bring the price down so that it feels like disposable monies (e.g. lottery at £1 a time - most people can afford to lose £1 without thinking about it and don't think about the cummulative effect), then you need a large number more people

I think that you need to model some numbers...

alternative is to look for sponsorship to help build the value - reducing the amount of income which needs to go out in prize monies...

Alasdair

 

[Bern_uk]

Hi Alasdair

Thanks for your reply. I realise £25 is a considerable registration fee, however it couldn't be any lower, given the following assumptions:

Venue £300 (4 1/2hours)
8 Tournament Staff £270 (£7.50 at 4 1/2 hours)
VAT £500 (at 20%)
Merchant transaction cost £113.75 (at 3.35% +15p)

I personally think people would take part in these sort of tournaments because there are positives, however i constructively hear a number of negatives that make me think twice about taking this forward..
1. People would be reluctant to pay over the web
2. Why use a website to take payment
3. These skillful tournaments would put off the average joe from taking part because the professionals would win it every time.
4. If the leisure centre was through the council then they would not let me host a tournament with a monetary prize.

Any more input would be great.
Cheers
Bern

 

[nikauk]

am sorry for this question being out of the blue but how can i post a thread? thank you.

 

[akirk]

So, if you get your full 100 people, and allowing no overhead costs / no salary / no office / no equipment / no cost of website / no marketing / no corporation tax / no ...

then you make just over £300 from each...

sorry - I think that it will make you a loss.

Alasdair

 

[oldeagleeye]

DEFINATELY a no brainer.

Its togh enough to get a Fiver out of punters for a major pool competition.

10 a heat = £50 quid Cost of table = £20 quid. NO staff costs just expenses £10 quid. Into pot for prize money £20 quid. 20 Heats = £400. 1st prize £250
rest runner up.

In short these compts do not make a profit they are usually run by pubs and promoters to pull trade in.

Rob

 

[Geoff Carter]

Hi Bern UK

As with all business, you need to do your market
research first to determine to what extent it is
what people want.

But irrespective of this, I am as concerned as
others here... I cannot see this being a success
for you.

Cheers

Geoff

 

[I Love Spreadsheets]

I would check the gambling laws before you go any further. I'm about 90% sure this would be classed as gambling and as a result you may need a license. (Getting a license is an expensive and long winded process but it will stop you going to jail for a couple of years)

If they do class it as gambling there are all sorts of rules to follow when it comes to taking registration fees and what (if any) money you can take out of the pool of money.

I'm only 90% sure of this and it is based on the problems I faced when putting on a similar event for a local charity. A quick call to your local gambling commission office should clear up the situation for sure.

 

[laguna]

A simple partnership deal between yourself (the organiser) and various venue owners working with sports equipment dealers, who themselves sponsor individual teams (and selling sports equipment at the live venues to the crowd) might be interested in holding such events?

I Don't think its gambling as that implies the wagering of money against a certain outcome but you definitely do need to check this for yourself.

 

[Esk247]

you won't make a profit from this, not at £25, believe me.

we tried offering a mini golf competition at a large fair for just £5 per couple, sod all were interested, so we dropped it to a pound and got lots of people taking part.

people don't have much money to spend on sports these days, gym membership is high enough and thats only £300 for a FULL YEAR! so £25 for a one off event isn't going to get any interest.

work out a different equation using the same principle, sports based, competition based, but different figures and see what you can do with it.

 

[Unicora]

A simple partnership deal between yourself (the organiser) and various venue owners working with sports equipment dealers, who themselves sponsor individual teams (and selling sports equipment at the live venues to the crowd) might be interested in holding such events?

I Don't think its gambling as that implies the wagering of money against a certain outcome but you definitely do need to check this for yourself.

Personally I think it will be difficult to make a good income to make the massive effort of orgaising it worth while. However you could think about other ideas. For example offer the events to businesses as team building, then you are likely to get a good price to start with. On top of that you can get the venue owners to let you use the facilities for free (or even have them pay you) to bring in business. Places like bars etc are always looking for ways to increase drinks sales etc.

Just a thought

 

[patientlady]

The way I see this 'the ringers' will always win. As much chance of winning the Ferrari at Heathrow T5 boo!

 

[I Love Spreadsheets]

As I said I only suspect it is gambling because as a financial model it is very similar to poker. People pay money in to a pot and the winner takes the prize.

I tried to organise a charity poker tournament and the gambling laws work against this sort of event from getting off the ground. The guy at the gambling commission bent over backwards to get my event off the ground but even he couldnt find away around two basic but huge problems

In the UK it is against the law to charge a registration fee and it is also against the law for the organiser to take money out of the pot. So that rules out your two revenue streams.

As I said, this was the law being applied to a poker tournament and not a sporting event so it may well be different for your event (although I can see a lot of synergy between the two events).

If you go ahead and you find out afterwards that you are breaking the law, not only do you face real jail time and huge fines, the venue will find them selves in big trouble as well facing similar punishments - at the very least they may lose their drinking license

 

[Bern_uk]

Thanks everyone for their input.

I've decided not to go ahead with this, mainly due to registration fee/ prize ratio, the costs involved and the number of particiapants required. The promblem with this model is not so much the registratoion fee in my mind but the difference between the stake and the prize.

i,e £6,400 between 10 wins £50,000 (don't forget the high rollers are out there). This would would make more than just over £300 a function but the problem is if you don't get the number of participants required your going to have one hell of a processing charge back into their account.

A gambling license would not be required as it is purely skill and a significant proportion would lose their registration fee.

If anyone is keen in hosting tournaments for their business, PM me and i'll send you some useful prep work.

I'm putting together a new business and will keep you all updated.

Regards,
Bern

 

[laguna]

PM sent!

Thanks
Chris