Short of money!

4/9/11
I was talking to a Chapter Director recently and they said that their chapter always seemed to be short of money. I asked the usual questions: do all of the visitors pay?, are all the members up to date with their meeting fees?, were they spending money on items they shouldn’t?

It seemed everything was pretty much in order so I started to dig a little deeper. I discovered that for years the chapter had not been run like a business and they had no idea what their costs were or had allowed for things to go wrong. They are not the first chapter to be short on funds and no doubt won’t be the last. So, I thought I would share my ideas on how to run a financially sound chapter.

Firstly, you need to know the chapter’s basic costs: in my region that is two full team trainings, three Leadership Team Forums and one Chapter Director Forum. In total this currently adds up to about £700 per year. Then you need to add something for things that go wrong: visitors not paying and yes, sometimes, members not paying. How much? Good question: your guess is as good as mine, but at least £100 per year. On top of that you might have other costs: stamps, socials, photocopying, not charging your AD a meeting fee, etc. As you can see the chapter’s costs could easily be getting on for £1000.00 per year.

So, how do we pay for this? Well, there is only one way: by charging more than your venue is charging you. I would suggest that you charge £2.00 more per member than you are being charged. Then the maths is easy.

Let’s say that the venue is charging the chapter £8.00 per member each week. No room hire costs – that’s really important. And, no minimum numbers if you can manage it. Add the £2.00 and the sum goes like this.

£8.00 plus £2.00 equals £10.00, times this by 51 meetings per year and you get the cost for a member per year - £510.00. Now divide this by 12 (months) and you have your cost to members, in this case £42.50 per month. I would further suggest that any member paying weekly with cash should pay more.

Two things to consider: 1) most chapters only charge visitors £10.00 so this needs to be taken into account, 2) VAT. Does the price quoted to you include VAT? If not it would add £1.60 to the £8.00 in my example – which means another £6.80 needs to be added to the monthly meeting fee per member. Suddenly £49.30 per month instead of £42.50.

And finally, your aim should be to have a bank surplus of around £500.00.