As we enter the final months of 2009, your golf club should be well on its way if not finished with its Business Plan for 2010. Yet, I find that in most cases golf clubs have not yet even started the process. When I ask why the planning hasn’t begun, I hear a litany of amusing responses, well actually unfounded excuses. A sampling of the feedback includes:
- We can’t start a new budget when we don’t have final numbers for 2009.
- We haven’t decided what we are going to do with our operation in the off season.
- We’re too busy to worry about planning.
- We’re afraid of how bad it might look.
- We’ve tried that before and it didn’t help us.
- It takes too much time and we don’t ever use it for anything.
- Our golf management company needs to be involved.
- Our golf marketing companies’ pricing isn’t set in stone.
Any of this strike a chord? Be completely honest now!
The reality is that many golf clubs either don’t have the commitment, skills, discipline, or desire to put together a plan. Planning is work! Hard work! But like any other hard work well done, it provides benefits.
A forward thinking approach with a financial plan in place for the entire year and then updated on a quarterly basis with a forecast with a focus on creating the future is a paradigm that any successful business utilizes. Yet, I find that in most cases golf clubs do little more than take a perfunctory look at the numbers from the prior month usually about 15 to 20 days if not more after the month has ended.
I have seen amazing transformations in the actions golf clubs take when the financial realities of their business are made known to them in black and white terms with a well thought out financial plan and a forecast of the future business. I’ve implemented forecasting where it previously wasn’t utilized and immediately new plans were developed for better expense controls and the marketing ideas became number one priorities instead of just “when I get to it” afterthoughts.
A focus on creating the future through a thorough, well crafted business plan is what separates great operators from marginal and poor performers. It the difference between swimming toward a destination and just drifting with the current. This reminds me of a something from the movie from Alice in Wonderland. When Alice locates a Cat during her travels, she asks the cat for advice on the road she should take. The Cat responds by asking Alice where she wants to go. Alice responds that she really doesn’t know. The Cat responds by telling her that if she doesn’t know where she wants to go, then the road she takes really doesn’t matter. Do you know where you want to go in 2010?
You must have goals. But putting together a financial is more than just crunching numbers on a calculator all day. There is a lot of work that must be done in order to get the proper foundation to plan. A solid financial plan is the final results of a thorough Business Planning process which includes:
Components of a thorough Business Plan include:
1. SFSWOT Analysis
This is analysis of each Club department’s and the Club’s overall
- Successes
- Failures
- Strengths
- Weaknesses
- Threats
- Opportunities
It provides a critical self assessment of your Club and provides a great foundation for goal setting for both qualitative and quantitative improvements in the upcoming year.
2. Competitive Analysis
Who is your competition? How much do they charge? What is your golf resort’s unique selling advantage?
3. Membership Planning
What are your Club trends for both membership enrollment and attrition by category? What real growth do you want to plan for in 2010? What has been the trend with downgrades and upgrades? What are you doing with the Initiation Fees? Do you have enough financing in place? How will your golf club handle the wait list for people waiting to join? How will you handle members wanting to resign?
4. Pricing Plan
What price increase will you take this year and when? Will member dues need to increase? will that cause members to leave? How will you price your cart and guest fees? What about F and B. Remember, except for a very few elite Clubs in the Country, cost does matter.
5. Payroll Planning
What payroll increases are you authorizing for the Club’s employees in 2010? Are the increases performance based or just “no thought” across the board increases? Can your golf club afford to give increases in pay during this recession? Do you have incentive based compensation plans in place or do you just pay for showing up regardless of the performance?
6. Expense Planning
What expense increases are you anticipating? Have you reviewed each department on a line item basis to determine if the expenses may have significant fluctuations up or down? Items that can significantly change month to month include property taxes, utilities, fertilizer, chemicals, general liability insurance, and fuel. Did you make sure you reviewed these items thoroughly to ensure you have an accurate view of the expense side of the financial plan?
7. Marketing Plan
Do have a written quarterly game plan for driving the revenue sources that are important to your Club? Are there specific timelines and employees assigned to carry out the plans? Have you budgeted the needed marketing dollars to ensure you will be able to achieve the results you need? Check out our industry best website solution for Private Clubs at Private Club Commander
8. Retention Planning
Do you have a comprehensive calendar of events that appeal to all segments of your membership to keep them using the Club and providing needed revenues. Is your calendar planned ahead at least 3 months at all times of the year? Or are you trying to come up with things at the last minute because the newsletter copy is due?
9. Qualitative Improvement Planning
Do you have a written quarterly plan in ever department for qualitative improvement? Specifically, are you challenging all of your Club departments to implement 2 or 3 initiatives that either create a better member experience, provide for improved employee efficiency, introduce a new product or service, or produce a better financial result?
10. Capital Planning
Do you have a written capital replacement plan in place for 2010? Replacing depreciated assets on an annual basis is a component of a successful business. Do you have the necessary cash to replace what is needed in 2010? Are you going to lease or finance needed equipment? Have you made sure you have done the analysis? Is your business plan at least looking ahead 5 years?
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