3/1/2010

I like to take a probabilistic approach to determining event turn out and use this to set the entry fee. Using this approach accounts for the fact that one never really knows whether a particular person will show up – but you can estimate the likelihood or probability of them showing up. I like to group people into the following categories:

- 95 % – These are the stalwart class members who try to never miss an event and who make it a priority in their lives. They will be there unless they are dead. Place me in this category, but note that if I were dead I would have my corpse dragged to the event to be propped up in the corner of the bar with a beer in my hand. Adjust the alcohol estimate accordingly.
- 75 % – People in this category will show up generally and will go to reasonable lengths to make it all happen.
- 50/50 – Those who would let a flat tire on their trailer, the loss of a crew a week before, or some other minor impediment keep them from making an event. These folks will need occasional assistance finding crew or dealing with some relatively minor boat issue.
- 25 % – Those who will show only if they get it planned well in advance with near ideal circumstances and one of the many small issues in life do not get in the way at the last minute.

###### Now, calculate three potential levels of attendance:

- the sum of all boats is the total number of people who might attend – it is a number you could not possibly exceed under the most ideal circumstances.
- the most probable attendance by first categorizing each class member and then sum the product of the number of boats in each category times the probability to get the total probable attendance.
- the lowest number of attendees would be the first two categories or my lowering the probability of each category to the next lower level.

###### Now, estimate the costs as a function of attendance

The cost of an event consists of fixed and variable elements. meals are variable – double the people and the cost doubles as well. Trophies are generally fixed. Race committee costs are generally fixed. The total cost will be the sum of the fixed costs plus the product of variable per boat costs times the number of attendees. the per boat cost is then:

estimated per boat cost = [ fixed costs + number of boats* variable per boat cost ] / number of boats EQUATION 1

###### Estimate the average income per boat

This is pretty straight forward – the product of the entry fee times the number of boats – but a further issue is late entry fee and US sailing membership penalty. Generally a percentage of the entrants will pay at the event and will accept the late entry fee. Some others will not be USS members and can get soaked for a few more dollars. The class keeps this money. To account for the late fee, I suggest looking at past events to see what percentage of persons have not been pre-registered for similar events in the past. The average income per boat will be:

average income per boat = entry fee + (%who typically pay late fee) * late fee + (% non USS members) * non USS penalty EQUATION 2

###### And finally, set the price

To set the cost one can simply set equation 1 = equation 2 and solve for entry with late fee and non USS membership penalty as parameters. Generally a late fee should be 15 to 25 percent of the entry fee and the non USS member penalty should be around US$5.

You will want to not lose money if the worst happens and the fewest number of boats shows – as if the weather forecast was particularly nasty for example. Conversely you do not want to over bill the sailors and end up making a huge amount of money either.

Using this method to set the price of an event will eliminate headaches at the last minute as the expenses add up and the turn out falls a bit short. And if the turn out is greater than expected, then bank the cash and buy more beer next time!

I have run two Albacore Nationals, many 505 local events, and most recently, the 2003 505 East Coast Championships. In every case, the class made a few $ – and everyone had fun. The costs were reasonable for what the participants received in return.