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The nice thing about the race production business is that the cash is front-end loaded. You can put on a race having virtually no money up-front. You just have to realize that you're almost certainly going to get fewer entrants than you think your race deserves, at least in the first couple of years of a new race. And, you're more likely to budget for what your race deserves than what entrants it'll actually receive. So, while it's nice to have the cash come in before it goes out, the rule is that less comes in than you expect, and more will go out than you expect.

The reason race production is an attractive business is that people pay before you provide the service. This is one reason why there is such a hefty penalty for late registration. Your cash is needed up-front to fund the operations, so you give a big incentive for people to register early. Other RDs do that for a reason, and you ought to do it too.

If you use online registration—and you're just plain stupid if you don't—your money is going to come to you within 3 weeks of the time your customer pays. This is because an online engine such as Active.com will pay you twice a month. If that's not the service you're getting, then shop around for a different online engine.

The costs you'll have to pay prior to the race include:

T-shirts
Bib and bike numbers
Aid station and post-race food supplies
Permits
Course hardware

What is "course hardware?" It's barricades, cones, pop-up tents, tables, chairs, pennants, snow fencing, scaffolding, bike racks, public address systems, buoys and other inflatables, and the list goes on. You'll want to rent, borrow, steal, appropriate, lift, bag, secrete or otherwise obtain all these items without actually purchasing them. This is because the rental of such items requires no payment until the race is upon you, and it's a LOT cheaper than buying these things.

Generally, you rent this stuff from people dumb enough to have purchased them for their own races, and the only way they can recoup their investment is to rent it all to you. There are, however, those who have good reason to own this stuff. If you're Set-Up Sports in North Carolina, or TriCalifornia or JA Productions in California's Central Coast, you're putting on an awful lot of our own races, so you've got to own this stuff. Another profit center is renting it out, and I know of almost no big RD who doesn't also manage a rental service of course hardware.

So walk softly as a new RD, and don't position yourself as a competitor to existing RDs. You will almost certainly find out that you're allies. It's funny how often end-users think of multiple RDs in an area as competitors, like they're Lowes and Home Depot, when actually you'll find them attending and working at each other's races. In Northern California, Brad Kearns, Eric Gilsenen and Andy Robles each put on a lot of races, and each take turns being the employer of the other depending on who's putting on the race. Each brings specific services. Gilsenen is the announcer, Robles owns all the hardware, and so on. This goes on all over the country, as it should.

Don't just rely on cash sponsors. Try to get your expenses laid off on one company or another. The best way to manage cash flow is to have it flow in one direction only. I find that it's often best to ask a company to take on a tangible sponsorship as opposed to some ethereal title. What does Presenting Sponsor mean? Or Gold Sponsor? A better way might be to say, "Race numbers are going to cost me $500, and if you'll pay this expense for me I'll put your name on all the numbers." Then the sponsor knows exactly what it'll get. When presented this way, your list of potential sponsors grows. Very probably there are dentists, or attorneys, or doctors, who are well-heeled, and might help you by biting off that smallish, manageable amount, and they'll get a charge out of having their name on all the bibs. When you go to a tri club meeting, pitch a half-dozen opportunities like that while also pitching for entrants (don't pitch for volunteers at tri clubs, you want triathletes to enter, not volunteer).

There are plenty of signage opportunities. Say, "Your name will be plastered all over our transition area, and for that I'd like you to help me pay for that." Just remember that the transition area isn't costing you $1200 (or whatever). It's costing you that amount plus the $300 you'll pay in getting banners printed that announce who the sponsor is. When fulfilling the sponsorship costs the same as the sponsor's financial commitment, you really didn't get any closer to the goal.

It's quite alright to ask for this money in two installments, half up-front, that is, three months or so before the event, and half just after completion of the event. This way, you'll have enough cash to get your banners produced, and so forth.

Banners are one of your significant up-front costs, and I'll write about them in a future installment. Just realize that when you lay off certain costs in exhange for signage, you've got to pay for that signage unless your sponsor has its own banners. If a grocery store gives you $300 worth of food and is the "aid station" or "finish line" sponsor, well, that's great. But if you have to make them 20 banners at $30 each, you just spent $600 to get $300 worth of food. All this signage is stuff you've got to fund up-front, so start/finish banners, generic banners you hang all over the course, signage on swim buoys or inflatables, posters, all that stuff is very expensive and it's up-front cash. Finding sponsors that have their own signage—banners and inflatables that you just hang or blow up with air—that's going to save you a lot of money.

Finally, figure out what your Act of God policy is going to be. Are you putting on a race in Florida in September? What happens of a hurricane wipes you out? Better to tell sponsors and entrants right up front that if something like that happens, you can't refund everything. Tell the sponsors that in case of an Act of God they're going to forfeit the up-front part of their payment. But also tell them that you're going to work hard to promote their brand before the race, that is, there's a lot of pre-race publicity going out that will be more than equal to the cost of their investment. Plus, you'll make good on their investment by giving them special consideration during next year's race.

That said, exercise some fiscal discipline. Whatever your refund policy in case of a disaster, make sure you keep that money on hand if you need to give any of it back, and think about what ought to be refundable, or what is held in trust. For example, your online engine is probably taking $9 one-day fees as well as your entry fee, if you're a USAT race. You've got to give that money to USAT, and let me tell you, our federation is not going to let you slide on that. While it's very nice to be able to have that cash in your account, and to use it for operations for a time, at some point you've got to give it to the federation because it's their money, not yours. You're talking at least a couple of thousand dollars in one-days, even for a small to mid-size race. There are always a few race production companies every year that get themselves in trouble because they spend the one-day money and don't have it when it's time to pay.