Dealing with lost income during COVID-19
COVID-19 has sparked extraordinary changes in our communities. The pandemic has hit physical activity and sports organisations hard. Everyone is having to adapt the way they teach, how they maintain connections, and how they generate income. So when our financial models are torn apart, how can we rebuild our business models and make our finances stack up?
On the 20 March 2020, Boris Johnson announced that all gyms and leisure centres must close. By this point many activity providers were already experiencing reducing attendance and making the difficult decision to pause sessions. Their income was already dropping.
Since then, for many, it has been a crazy period of trying different approaches – often with no idea whether they will actually work. Many of the individuals we’ve spoken to were happy to share what they’d done but reluctant for it to be shared as good practice because, in truth, they had no idea what impact it would have.
The open and honest ask
Unless you rely on fundraised income, you may never have asked people for money without providing a service in return. The pandemic makes this feel particularly awkward. More organisations are asking than ever before at a time when jobs are at risk, money is tight and critical health services are at the forefront of everyone’s minds. But this doesn’t mean you shouldn’t ask.
Clubs, leisure providers and instructors across the county have shared heart-warming stories of the generosity of their members and participants. One club raised £4,000 by asking lesson members to donate their pre-paid fees. All the success stories we’ve heard share a common thread: openness and honesty.
The real story
It’s easy as a participant paying for a class to assume that you’re contributing to a big profit. You know what you’ve paid. You see the number of people in the class. A quick sum later and you’ve calculated that your instructor is on an enviable hourly rate. You don’t necessarily see the room hire, the insurance, the cost of qualifications, the advertising or any of the other costs hidden behind the scenes. And when the service stops, it’s easy to imagine that the costs stop too.
COVID-19 has forced activity providers to tell the full story – a story of ongoing costs, loss of income and future impact. They’ve told their story and asked for help – often acknowledging that not everyone will be in a position to donate. Some have told a universal story to everyone who interacts with them. Others have focused on those who benefit the most from what they do.
Participants have donated or politely explained that they can’t. We’re yet to hear of anyone who has been offended by being asked.
Some providers have taken it a step further by offering incentives for anyone who helps them now. We’ve seen discounts on future bookings for those who donate pre-paid places. Gyms have offered their members price freezes, cash rewards or free trial memberships for friends if they continue to pay their membership fees during lockdown.
For those who have the capacity, offering cleverly crafted incentives now could help fill a short-term loss of income and contribute to increased memberships in the future. If you’ve already secured donations, offering a follow-up thank you to share with a friend could also be a nice touch.
Some classes are easier to teach online than others. If your activity relies on specialist kit or a pool, for example, this might feel like a non-starter. But some instructors are thinking creatively about skills they can teach in the interim that will help participants cross-train or refine technique.
Providers have reported various approaches to pricing:
- Free classes to retain engagement and increase participation to boost income in the long-term
- Regular classes charged at the same price
- Slightly cheaper classes to encourage take-up and acknowledge that it’s a different experience
- More or larger virtual classes promoted to new audiences to increase income and audience potential
- Extra 1 to 1 (1 person or household) classes at a premium price
Take a look at this handy guide from Imin on moving your classes online.
Funding and government support
While all of the above can help plug gaps in income, some will need more significant financial support. The government and funders, such as Sport England, have acted quickly to make emergency funds available.
Take a look at our COVID-19 funding page for details.
Here to help
We are chatting regularly to Sport England, the Active Partnerships network and local partners to help you access the support you need. Let us know what would help you come out of COVID-19 stronger than ever. We’d also love to hear how you’re dealing with lost income during COVID-19.