Running an online sports and virtuals betting shop can be tasking yet
rewarding. This is the concluding part on how you can also run a
profitable sports and betting virtuals betting shop.
see here for part 1
- How Much Will it cost me to run the business and how do I manage these costs?
There are some costs that you cannot do without, while some others can
be managed. Find a breakdown of some of the costs you will need to incur
on a monthly basis per shop
- Fuel: To run your generator, you need to fuel
it. Depending on the situation of the public power in your area, you
either may not have to use generator at all – in some areas, they have
constant power only during the day, or you may have to run on generator
for most of the day – majority of cities, town and villages in Nigeria.
For this you may spend between 5000 and 20,000 Naira per month
- Internet: This business requires being online.
Besides just being online, you need to purchase service from a good
provider, otherwise all your effort to satisfy your customers will be
frustrated. This will cost you between 2500 and 10,000 Naira per month
- PHCN: Well, either you use it or you don’t, you get
billed – and you have to pay. So set aside between 500 and 4000 Naira
per month; because if you are on post-paid, your bill will never be
proportionate to your consumption.
- Salary: This is one area where one can easily get
it wrong. First, do not pay your “sales people” a fixed amount. Since
you get paid commission, which is performance based, you need to also
ensure that your sales people are rewarded based on performance. I
recommend a mix of salary + commission (e.g 1 – 2% of sales).
- Other Miscellaneous costs: These include dues, service charge, generator maintenance e.t.c.
You can manage your expense on powering your business by
purchasing a UPS or Inverter to be used in-between power outages. You
will need to monitor your Internet usage to ensure that your staffs are
not watching Nigerian movies on YouTube in their free hours. Also you
need to protect your WiFi access so your carelessness does not turn it
to “free-to-air”. As for salaries, employ the best hands and be prepared
to compensate them when business is booming.
- How much will I make as commission?
This depends on the company you opt for. Commission will be calculated
as a percentage of either gross sales or gross profit. Usually, you will
be offered between 5 and 10% of gross sales or 30 and 50% of gross
profit. In addition, your commission may be subject to profit/loss
sharing, and some companies offer a mix of both gross sales and gross
profit. As a business person, your aim is to maximize every opportunity
after careful analysis has been done. By this I mean you may mix and
match offers, based on factors such as competition, level of awareness,
proximity to the city, timing, risk appetite e.t.c. Generally, stay away
from offers that involve a profit/loss sharing, no matter how juicy the
percentage may look.
- How much will I keep as profit?
This is not difficult to derive. Whatever is left from your commission
after you have paid all your expenses will be your profit. To increase
your profit, you can either do two things, 1. Reduce your cost or 2.
Increase your commission by increasing sales or profit. On the average
your target profit should be between 30 and 60% of your gross
commission. The higher, the better.
- When do I break even?
Again, like every other business, you do not break even the instant you
start. Factors that affect this are numerous, but the bottom-line is the
volume of sales that is achievable. The more revenue that can be
generated by your shop, the faster you will break even. Plan your
business such that you break even in 3 to 5 months. I will like to
restate the need for you to have a secondary source of income or savings
while your new business stabilizes. You will need this to keep the
business rolling while it matures.
It is easy to benefit from economies of scale in this business.
Once you are able to set up your 3rd, 4th…shop, so long as they are
within the same geographical area, you can share internet plans among
the shops, rotate staff based on shop demand, reduce the impact of
cashier departures amongst many others.
In conclusion, there are few businesses that offer the mileage,
coverage and rewards that online sports betting offers, and I hope in
your search for a guide, you have found this post helpful.
