Costs are a big concern for any business owner. It does not matter how much money you make if your bottom line does not add up to your overall profit projections. The gross profit a bookie makes is the difference between the winning bets paid out and the money taken in on losing bets plus the commission or ‘juice’ charged on that bet. Sometimes this can be a very fine line that needs to be closely managed.
In an effort to boost the net profit coming in, too many private bookmakers look to cut costs by going with a discount pay per head online sports betting software provider.. This industry is filled with fly-by-night outfits peddling an inferior product and service for a low price per head fee. Some will go as far as using bait and switch tactics that are filled with hidden fees and added costs to get the features and benefits you really need to properly run and manage your own independent sportsbook.
This does not mean that you have to pay an extortionately high per head fee for your bookie software solutions. What it means is that you have to take the time to find a price per head shop that best meets all of your business needs at a weekly fee that works into your overall profit projections.
Building the Right Customer Base
One of the first steps in the process is determining how much revenue you need to take in on a weekly basis to reach your financial goals. If you have 10 customers betting a $1000 a week, your pay per head fees are going to be far lower than having 100 customers betting $100 a week.
What you really need to determine is an acceptable hold percentage on the weekly action you book. Next, you need to factor in the weekly cost of your pay per head provider. You also have to add in some other operational costs to come up with the net profit you walk away with each week. Volatility is a huge factor in the sports betting industry, so the trick is to come up with an average weekly profit that makes your book a worthwhile endeavor.
The best course of action is to develop a blend of betting customers that cover the range from small unit plays to big money bets. The weekly cost of your PPH service becomes less of an issue based on the overall profit you will be bringing in.
Paying the Right Price Per Head Fee
As mentioned, working with a cut-rate PPH service can produce more headaches than the up-front cost savings may be worth. You need a reliable service that does not have issues with internet downtime due to an inferior online operating system. You also need a service that can offer a highly safe and secure online environment for all the transactions that do take place in a business of this nature.
Most importantly, you need fast and easy access to real-time business analytics that can help you make decisions in a timely fashion. The ability to make mass edits in a moments notice or changes to betting and credit limits on an account by account basis are vital to your ability to always stay way ahead of the curve.
Certain pay per head features are going to cost more than the standard plan most PPH services offer. Seeking out the best value for your money with an experienced price per head shop is the best way to invest in your bookie business. Finding out the hard way that you do not have everything you need to be successful can be a hard lesson to learn.