#stripe.com

The Discussion

It started with individuals inquiring on how the booster club could increase the proceeds in which they make as income to continue supporting the activities.  All of the activities are related to Science, Technology and Engineering with elementary to high-school students within a public school system.

Currently, there is an upcoming event that will bring 40 groups of people together, their friends, family members, coaches and a team of 5-10 members.  If you extrapolate that the average individual team member will have one parent accompanying them to this event and every 3 members will have 2 parents accompanying them and every 5 will bring a friend.  We come up with some numbers (I am not the best at math..)

Individual Team Members: 320 individuals  * calculated as the mean of 6 individuals per team to 10 individuals per team: [(40*6)+(40*10)]/2

Coaches, Assistant Coaches: 40 * best estimate, many coaches have multiple teams consisting of numerous individuals.  I estimate 40.

Parents Attending: 426 * rounded up from [320+(320/3)]

Friends Attending: 64 * people have friends and people want their friends to see them succeed

Total Attending Event: ~ 850

Now, I am ignoring or removing the likelihood (which I know will happen, always does) that numerous parents will bring their child's grandparents, siblings, etc.  For now, let's just leave family members besides parents out of the math.

Last year, this booster club raised a sum of money from the proceeds / income from their concessions sold during this 8 hour event.  The concessions range from lunch items, snacks, sodas, water, candy and the other goodies you would expect. Remember, this isn't a baseball game so there isn't really a whole lot.  I haven't seen popcorn, snowcones, peanuts or beer (though beer would make it interesting..).

I am unable to comment on the exact prices charged for the items sold at the concession.  But, for now, let us assume that the club's proceeds / income was .. I don't know.. $1500.00USD.  This year's event is much larger than previous years' events.  But, the concern is how to maximize the proceeds available to the booster club.

When the discussion started, it was made clear that the concessions operation is a cash-only operation.  I find loads of issues with cash-only operations.  You have the obvious: (1) people steal (2) people cannot count (3) people make mistakes.  However, based on the previous year's proceeds, that equates to less than $2.00 spent per person attending.  

Now, I imagine that some parents, teams and groups are prepared for this scenario and bring their own lunches, snacks etc.  But, I know most people do not because concessions go with the overall experience.  Kids like junk and a lot of this is junk food, so -- it is what it is.

My Argument

I will admit that I do not always have the strongest facts to reinforce my arguments on every topic I feel passionate about. But when it comes to making money, I do.  When it comes to making money, I am good at it and I have knowledge, experience and more than strong opinions to share.  When the question of "How do we try to increase the profits from the concessions" came up, I jumped in with a simple answer, "convenience."

Maybe at first my short one-worded answer is not too clear and potentially too vague, but not ambiguous.  At least it was not ambiguous in my mind.  I immediately received a bit of puzzled faces.  So I followed up my simple statement with some additional comments.  I am not going to put them all in quotes and dictated-like, so just read.

First, if you want to maximize your earning potential from an offering as simple as concessions you must make sure you make it convenient.  Convenience is going to open your concessions opportunity up to the largest available audience.  It becomes more apparent every day that individuals who normally prefer to pay with cash, often have plastic; but the true cannot be said for those individuals who often pay with plastic, but do not carry cash.

Cash is no longer a staple of our lives.  We direct deposit our paychecks. We auto draft our utility payments, automobile payments, insurance, and mortgage. I was immediately interrupted that it *HAD* to be cash-only and everyone is notified in advance.  This great statement got me fired up.  I responded with, "St. Johns Medical Center notified me on all my documentation that in order to pick up my medical records, I would be required to pay in cash.  Despite that notification, I still forgot to get cash and when they would not accept my more than worthy preferred VISA card; I was a bit bothered.  They prefer that I immediately give them a credit card when I visit.. you know to get their money asap.  However, on a transaction such as this one -- they wanted cash.  It is because its easy to fudge numbers when it is cash.  Let's be honest here.

They print my 80 pages or whatever ridiculous amount and tell me I owe them $36.00.  I do not have that cash.  I didn't even have change.  So, I went upstairs used the ATM, paid the ridiculous fee and gave them cash.  Now, I have $30.00 (they didn't have change so they took $30, no $1.00 available, yay me) in cash that will sit in my pocket, get put into a drawer or likely go through the washing machine a time or two before my wife finds it and claims it.

The reality is that people do not carry cash as often as they used to.  This is the case, in my personal life, that I even PRE-PAY places I often visit.  Two great examples:

1)  I enjoy smoothies from SmoothieKing.  They had this great deal on gift cards.  You purchase a $100 gift card and you get 4 free smoothies plus and extra $10.00 or something.  I go often enough that I said, hey, I will take some of those. I ended up buying $300.00 worth of gift cards.  I just recently spent the last available funds on the card, but I still have like 10 coupons that do not expire for free smoothies.  With this one, I got a bit of reward.

2)  A coffee shop that I used to frequent has a prepaid card.  There was no perk or benefit other than not having to carry cash or pay with a card.  Just give them your number and off you went.  I was in there with a small group of friends nearly every weekday, so they knew it was me.  It had its benefit, but no financial reward.

The point is, I do not have cash so often, that I even give people my money BEFORE I intend on buying their products or services.  I have credits/pre-payments for all kinds of stuff (as long as they do not expire, I pick them up if it includes perks).  I have prepaid mastercards that came with a 10% bonus.  I have gift cards for places we frequently visit.

You do not have to trust my word.  There are research studies performed almost annually on both consumers' confidence with online shopping, where most (~ 70% as of 2012 via Pew Research) do strongly agree or agree that they are uncomfortable giving out their personal information online or credit card details.

But we are not strictly talking about internet purchases.  These are face-to-face transactions. If you calculate the typical 300% markup on retail items, which may not apply evenly for food concessions, but a starting point.  The average person is going to need to purchase something to drink ($0.50 - $2.00), a snack ($1.00 - $3.00) and/or a lunch for their child attending, let's say ($5.00).

Lets assume that 70% of attendees purchase a lunch item that includes some sort of entree consumable product and a beverage for $5.00.  That brings us to $2975.00, less $81.81 in fees from Square.  Now, let's continue to assume that the remaining 30% purchase an item based on the mean of the available beverages and snacks.  That comes to $433.50, less $11.92 in fees from Square.  We now have a gross income of $3314.77.

That is the first scenario.  Now, let's say we have a variety of menu items, which with many sharing the same price point, I will break down relatively into groups:

3 items for $0.50 5 items for $1.00 2 items for $2.00 3 items for $3.00 5 items for $5.00 2 items for $7.00 The average price based on those is $2.95, so let's round it to $3.00.  If the 850 attendees spend the average of $3.00 we end up with $2940.00, less $80.85 in fees to Square for a gross income of $2859.15.

Now, as long as the expenses to acquire, prepare, and serve these items does not exceed $953.00 there is a net profit of 300% or $2859.15.

All of this is based on assumptions, but I know that I currently run a service that has quite a large number of members/users.  Of those users, we will round it to a figure of 1,000 users.  Only 4 have inquired as to other means of payment than credit card.  These are strangers, people who have never met me.  They do not know who *I* am.  They only know what I am offering and they pay.

I believe that this is just logical thinking.  Convenience will aid in one's efforts to increase income through maximizing their available audience of purchasers.  By increasing your target audience you increase your likelihood of sales.  We could analyze this for days, determining the most popular foods amongst the various age groups of attendees.  The current trends in candy, snacks and sodas.  We could shop for the best deals given we have a bit over a month to prepare.

Ultimately, nearly doubling your overall income (at a near minimum) is reason enough to spend the very little amount of time required to get setup.  In addition to concessions there is concern about teams paying their registration fees.  Now, they can all register online, using a simple form I have already developed/used numerous times over for stripe.com that allows them to enter their information, team information, number of attending individuals (Students) and their payment information.  With stripe, you pay 2.25% + $0.25, but ultimately you get paid now, not after the event.. if they pay at all.

No pay, no play, right?

So, my proposal is simple.  Square/Square POS for concessions and a simple stripe.com integration for registration of teams and taking payments.  Then, we collect the email addresses and we are now able to notify these teams of upcoming events, changes and opportunities to get more involved.

It is a win win scenario!  I am likely the strongest technological (computing, internet, web-app development, etc) of these volunteers.  Now, do not take my comments as suggesting, inferring or insinuating that these other volunteers and booster club members are in any way or interpretation of dumb or of no intelligence.  They are engineers, teachers, lawyers, doctors, who knows.. they are smart people!  They have successful businesses and succeed well in life.

I am just here to give them a helping hand to bring their organization to the limelight of their niche and prove they are the defacto standard for what they are doing.  So other organizations doing similar events model after them.

Obviously I could release all of my source code open-source (GPL) to give other similar organizations the same opportunities.  Share and share alike.  

I know that some of the members might read this article and I hope they do.  I hope that it reinforces my point(s) I attempted and believe I made clear during our meeting.  But, it might provide additional clarity or open a more serious dialog on how we get it going.  It is simple, easy and safe.  Not to mention... CONVENIENT!