Finances and risk management

Revenue: The income generated by a leisure facility. This can come from various sources such as memberships, ticket sales, equipment rentals and concession sales.
Expenditure: Money spent on operating a leisure facility. This can include staff salaries, maintenance costs, rent or mortgage payments, taxes and marketing.

Fixed Costs: Costs that do not change with the level of activity at the facility such as rent, salaries and utility bills.
Variable Costs: Costs that change in relation to the amount of activity at the facility, including equipment maintenance, concession supplies and temporary staff wages.
Break-Even Point: The point at which total revenue equals total costs, hence there is no profit or loss. Knowing this can help predict future financial performance.
Profit Margins: The difference between the revenue and costs. In order to ensure sustainability, leisure facilities should aim to maximise their profit margins.

Cash Flow Forecasting: An estimate of all future cash receipts and expenditures. Helps leisure facilities manage their finances and plan for the future.
Financial Control Measures: Procedures put in place to monitor income and expenditure. Regular financial reporting can identify issues and opportunities.

Risk Identification: Understanding all potential risks that could harm the leisure facility’s operations, reputation or finances.
Risk Assessment: Analysing the identified risks and assigning a level of severity and likelihood to each. High severity and high likelihood risks need to be prioritised.
Control Measures: Implementing procedures to minimise the potential impact of the identified risks. Can involve reducing the risk, transferring it (via insurance), accepting it, or avoiding it entirely.
Emergency Planning: Creating procedures to follow in case of unexpected events such as natural disasters, health outbreaks or accidents. Essential to ensure a coordinated and effective response.

Business Sustainability: Effective financial management ensures the long-term viability of the leisure facility.
Customer Satisfaction: Good risk management contributes to a safe and enjoyable environment, improving customer satisfaction and loyalty.
Legal Compliance: Risk and financial management practices can help leisure facilities remain in line with regulatory requirements.
Investment Attraction: Healthy financial performance and strong risk management can attract further investment into the facility or program.