Why your business and your football club may have more in common than you think
Football clubs are hardly renowned as small businesses, but there's plenty of evidence to suggest they're not much different to standard SMEs.
Football is business these days. Big business. Agents, players and owners are out to squeeze what they can from a booming industry, with eye-watering television deals and multi-million pound sponsorship agreements making the game one of the most lucrative corporate pursuits on the planet.
That's the widespread view, anyway, and no matter how you want to dress things up it's undeniable that football is a fully-fledged business sector in its own right - but there's a surprising twist.
Last year, researchers Neil Moore and Roger Levermore published a study that revealed 79 of the 92 professional clubs taking part in the 2007/08 season exhibited certain features typical of a small to medium-sized enterprise (SME). Whether it was because of their turnover or employment figures, this included the likes of Blackburn Rovers, Tottenham Hotspur and even Roman Abramovich's Chelsea.
The suggestion that any Premier League club is a small business may initially seem a laughable one, but look closer and it's clear that many display archetypal characteristics of SMEs. Running a football club has certainly become a corporate occupation, but it's a high-risk game that any small firm can relate to.
A game of constraints
One of the challenges facing plenty of SMEs is the fact that they often find their resources are limited - especially in comparison to larger organisations with more assets at their disposal. The same can be said of football.
Take West Bromwich Albion, for example, and hold them up against, say, Manchester City. Both are Premier League clubs ostensibly competing for the same prize against the same opposition, but WBA simply haven't got the resource to effectively challenge the dominance of their top flight rivals.
This is a problem that constantly faces smaller businesses which are trying to compete with bigger, more established brands. The household names have the reputation, power and financial clout, while others are forced to take a more measured approach to the market.
Simply throwing heaps of money at something doesn't mean it will succeed, as was well demonstrated by Queens Park Rangers last season.
One thing that makes football such a competitive business is the insatiable lust for instant success. Fans rarely have much patience, and this is increasingly reflected in the regularity with which chairmen opt to sack their managers in favour of someone they believe can achieve more in less time.
Another aspect of this is the readiness with which some clubs splash the cash with little consideration of long-term financial factors. There's a long list of casualties that have suffered as a result of failing to take into account the risk that substantial investment doesn't deliver the expected results - just ask fans of Leeds United and Portsmouth.
While this isn't necessarily a typical trait of your standard SME, it's a mistake that many who are new to running a business are prone to making. Simply throwing heaps of money at something doesn't mean it will succeed, as was well demonstrated by Queens Park Rangers last season.
The lesson here is that SMEs and football clubs alike need to look beyond the immediate future - it's easy to find yourself in trouble as a result of failing to see the bigger picture.
Access to finance
It's a well-known fact that small businesses have struggled to secure the necessary finance in recent years, and this is something that has affected the world of football too.
Clubs like Portsmouth and Crystal Palace have ended up in administration due to a failure to balance the books and an inability to raise the funds they need to stay afloat, and in many respects this can be considered another symptom of the short-term approach. There are lessons to be learned from the likes of Everton, who have focused on long-term stability rather than chasing success at 100 miles an hour.
Despite the perception of football clubs as being part of an industry where the money never stops flowing, the vast majority are constantly trying to establish themselves in a market dominated by a powerful minority.
That's something many SMEs can relate to.
Image credit: Ben Sutherland.
Dan O’Sullivan is Make It Cheaper's Web Content Manager, which means much of his time is dedicated to ensuring we have plenty of online material to help business owners understand the energy, insurance and telecoms industries. With years of experience working alongside SMEs, Dan is committed to making life as easy as possible for smaller firms. You can email Dan at firstname.lastname@example.org