Bar income forecasting for West Wickham Bowling club
West Wickham Bowling Club (WWBC) is a thriving, community-based organisation dedicated to promoting the benefits of healthy recreation through the provision of outdoor lawn bowling facilities.
The club offers a welcoming environment for people of all skill levels, from beginners to seasoned players, and fosters both active participation and camaraderie.
Additionally, the club takes pride in its active social program that brings the community together and enhances the overall club experience.
The request
The financial sustainability of WWBC is crucial to maintaining its high-quality facilities, inclusive programs, and accessible membership fees. A primary revenue stream is bar income, which significantly offsets membership costs and supports reinvestment into club facilities.
However, the variable nature of games played each year has led to fluctuations in bar revenue, creating challenges in setting a stable annual budget and determining the level of reinvestment in the club.
To address these financial challenges, WWBC sought help from the RSS with the aim of producing a reliable predictor of bar income based upon a comprehensive and varied playing program.
The approach
Owing to thorough record keeping, the WWBC Treasurer was able to provide the RSS statistician with detailed records of historical bar income revenues. This was in the form of a raw data set of 250 records of event level revenues, covering the previous two seasons, 2022 and 2023. The records contained details such as the date and type of fixture being played, as well as the overall revenue for the fixture.
Once the data was cleaned, checked and prepared, the analysis commenced. The overall aim of the analysis was to try and understand the key sources of variability in revenue, so as to isolate the core variables needed to accurately forecast future revenues. This commenced with a series of detailed descriptive exploration of the data, followed by statistical techniques to understand the role of the fixture features on the expected revenue per fixture.
The result
The analysis revealed that overall revenue was dependent upon both the quantity of fixtures played per season, as well as key fixture features. It was shown that at a minimum any forecast ought to feature a projection of fixture types, as this was the biggest source of variation in revenue. This was primarily attributable to the differing number of players by type of fixture; some fixtures comprised only 12 players in total, whereas others comprised up to 48. The next best addition was shown to be a compensation for reduced revenues on days when multiple fixtures took place, as this was identified as causing an additional independent impact on revenues.
The project culminated in the production of an interactive Excel forecast tool. The tool permits the WWBC Treasurer to enter a fixture plan for the upcoming season using a parsimonious selection of key features needed to produce an accurate forecast. Based on this fixture plan and its associated characteristics, the tool computes the expected bar revenue and shows this both as a median (maximum likelihood) value, but also via a range of one tailed expected revenue thresholds. For example, the tool provides output along the lines of “we can be 90% confident that bar revenue this year will be in excess of £15,000”.
The tool provides the Treasurer with a robust projection of bar income for the up-coming season. In conjunction with the confidence intervals, it can support wider budgeting and forecasting for the club by ensuring that the club doesn’t get caught out by unexpected revenue shortfalls.
Impact and benefits
Using information on the expected set of fixtures for the 2024 playing season, a forecast was produced in April. Once the playing season had finished at the end of September, it was found that the actual bar revenue was accurate to within a fraction of a percent of the median forecast produced in April. This has helped reinforce the credibility of the approach, and has been extremely beneficial for the club’s financial planning.
This new reliable tool for accurately forecasting bar income is now a crucial resource for effective financial planning within WWBC. By providing an early and realistic view of bar surplus, this tool helps to anticipate funds available for both essential and discretionary expenditures, allowing several key benefits:
1. Enabling Early Planning for Discretionary Spend:
With accurate forecasting, the club can determine its discretionary spending budget as early as April, when the season’s fixtures are known. This proactive approach allows the club to allocate funds towards optional improvements, events, or amenities based on the projected bar surplus rather than waiting until the end of the financial year in November.
2. Mitigating Cost Inflation:
The bar surplus serves as a financial buffer, helping to counterbalance rising costs across other club areas. The club can decide whether general inflation can be absorbed or whether alternate action is required. Confident in the knowledge that additional costs do not need to be passed onto members, helping maintain membership affordability.
3. Financial Flexibility Throughout the Year:
The ability to adjust spending plans based on bar income projections allows the club to respond to changing financial conditions and prioritise expenditures in line with what is feasible.
4. Strengthening the Reserve Account:
The confidence in annual planning outcomes enables consistent contributing to the club’s reserve fund each year, thereby building long-term stability and resilience.
WWBC Feedback
The project has been a resounding success. It was completed in just three months, enabling the forecasting tool to be deployed throughout the bowling season (April to September) and validated by the season’s end in October.
Collaboration with all RSS members has been informative, relaxed, and enjoyable. Communications were straightforward, practical, and free from unnecessary jargon, fostering an effective partnership. Special thanks go to the assigned statistician, RB, who grasped the brief from the outset, brought relevant experience with similar amateur organisations (such as WWBC), and recognised the critical role improved financial planning plays for a small charity. We are deeply grateful to RB for his expertise and commitment.
Charity contact: Mike Flaherty
Volunteer: Russell Bradshaw