Price is what you pay. Value is what you get – Warren Buffett
Last year there was an explosion of stories about coffee in the national press when media retail analysts at Allegra Strategies carried out a study to assess whether consumers were receiving value for money when they picked up a takeaway coffee. I was fascinated, although not surprised, to see that the cost of the coffee itself was just a fraction of the total. Coffee served in a medium-sized £2.20 cappuccino was just 8p, the total cost of the cup, lid, stirrer, napkin and sugar amounted to 16p, milk cost 8p while the rest was taken by staff (25%), rent, rates, capital equipment, overheads and VAT (about 37p). The profit made by the shop accounted for 13% of the total. It reminded me that when we buy a litre of petrol or diesel the actual profit made by the fuel company is just a fraction of a penny (in this case the vast majority of what we paid comprises tax). The report’s authors came to the conclusion that despite the cost, a cup of coffee was ‘good value’ because of the ‘café’ environment and ambience, time spent resting, free Wi-Fi in many outlets and meeting with friends contributed to the purchasers’ enjoyment.
These thoughts came to me as I was beginning to sort out paperwork for the next committee meeting of Southern Counties Canine Association where we will be reviewing the balance sheet for 2016 and taking decisions about how we provide the best value for money for exhibitors next year. This annual review takes some time for, as I explained a few weeks ago, the conflicting demands shows have to take into account must be fully thought through: mistakes can be expensive. In the process I turned up the 2015 balance sheet and I thought it might be interesting to share with you exactly how your entry fees are spent – although I must emphasise that every show will have different expenses and priorities. What follows is just one of many scenarios – and this just covers the show costs not the costs of running the society as a whole which includes honoraria and expenses to some committee members whose administrative contribution is significant and in addition to actually working at the show and attending committee meetings.
The show income as a whole in 2015 was a fraction over £196,000. This was made up of entry fees of £155,000, catalogues sales of £12,000, trade stand receipts of £22,000 and caravan fees of £5,000. About £600 came in from spectators’ car park fees and as this amount had been decreasing over several years, the committee decided the cost of collecting it was more than the income so spectators’ parking in 2016 was free. In fact this had an unexpected bonus for exhibitors in that we were able to park cars much more quickly as there was no need for them to be separated off as they entered the show.
Entry fees are made up of three separate entities: the charge for one dog where challenge certificates are on offer, the charge for one dog where challenge certificates are not on offer and the charge for a dog that is entered in a second class. With 8149 dogs entered this equates to an income of £19 per dog as far as entry fees are concerned (this amounts to a significant subsidy from those breeds which do not have tickets incidentally) but the other fees and charges coming in, which make up the total turnover and subsidise entry fees, means that the available income is £24 per dog: this is a convenient point at which we can start to break down how these costs relate to entry fees.
By far the largest expenses are the rental of Newbury showground, tenting and benching: this costs a fraction over £11.60 for each dog entered – almost half the entry fee for dogs being shown in classes with tickets. Rubbish and waste disposal is almost exactly £1 pound for each dog entered as is the cost of ground preparation and repair which we have to pay on top of the rental. Catering for judges and stewards and hotel and judges expenses account for a further £2.45 while security, which includes management of the caravan site, is 75p per dog. Printing and postage is another major expense. Southern Counties, like most other shows, only sends hardcopy schedules to those who entered the previous year using a hardcopy entry form but this is still over 2000 and although most schedules are distributed at dog shows by the canine press as a service to exhibitors, we still send many by post which is becoming increasingly expensive. The total is £2.50 per dog!
Do you want to sit down at the show? We spend £1,500 hiring tables and chairs and your stewards cost you 37p for every dog entered (excellent value for money in my view). Other expenses include public address and radios, fire extinguishers, first aid cover, veterinary cover, advertising, insurance, rosettes (£1,500 in 2015) and the repair and maintenance of stewards boxes, signs and other bits and pieces required for judges hospitality and insurance all of which brings us very close to the £24 for each dog that your entry, trade stand and caravan fees make available.
Keeping costs down
In September Southern Counties committee, like every championship and general show committee in the country at some time, will be sitting down to see whether we overspent on any area or in other ways can save money to enable us to keep entry fees as low as possible commensurate with running a show which is attractive to you as an exhibitor both in the quality of the judges we select and the services we provide.
In 2016 we saved a significant sum by changing our refuse contractors but we know that most of our other costs will be rising by 2 or 3% and although we made a small profit in 2015, is too close to the breakeven point for comfort and I know our Treasurer will be suggesting an increase in entry fees although this will be subject to a spirited challenge from the rest of the committee who will be fighting your corner. They will argue that if we can keep our entry fees low we will increase the number of dogs entered which will consequently enable us to stay in the black. Our Treasurer will argue that we cannot afford to take that risk and that the entry fee for most people, is only a very small fraction of the total expenses of attending a show when you take into account travel and other associated costs. The committee will then argue that fuel prices remain low compared to a few years ago and that you, the exhibitor, only see the ‘headline figure’ when comparing us with other shows.
As Chairman I will argue that exhibitors are thoughtful and intelligent and that they are prepared to pay for a good, fair judge at a show which is a pleasurable experience and that these factors are more important than the entry fee. We will eventually settle on a figure which we hope will be within the parameters of our direct competition in 2017 and that our judging panel will attract enough dogs at that fee to keep our heads above water.
That’s what it’s all about folks: quality, value and service – getting the balance right and you are likely to be successful. Getting it wrong means long queues of complaint at the secretary’s office. Believe me, no championship show wants that.