Maintaining standards while keeping a firm grip on costs is perhaps the most important aspect of any club employee’s job, whether you are a greenkeeper, manager or a steward. Greg Evans MG explains how to get more for less
Maintaining standards while keeping a firm grip on costs is perhaps the most important aspect of any club employee’s job, whether you are a greenkeeper, manager or a steward. Greg Evans MG explains how to get more for less
Golf has gone through many changes over the centuries. From the origin of the game on the Scottish links to the invention of the Pro V1 golf ball, which gave golfers an extra 20 to 30 yards on their drives, the game has evolved. One of the biggest changes has been with customer (or golfer) expectations regarding the playing condition of golf courses. Gone are the days when a golfer would put up with a bobbly putt or standing on an area not knowing if theirball was laying on the fairway or rough. Today’s golfer demands higher standards and these demands are changing the game for the better. Twenty years ago, many clubs had long waiting lists and expensive joining fees. These clubs could dictate the terms by which a golfer would be allowed into a club. Demand exceeded supply; it was a time of too many golfers and not enough golf clubs to accommodate them.
This situation began to change withthe infamous R&A survey in the late1980s, which basically predicted a huge increasein the number of golfers wishing to take up thegame in the future. To cater for this rising demandthe governing authorities encouraged more golfcourses to be built and over the following twodecades our industry entered into a massive expansionprogramme to accommodate this expectedinflux of new golfers.
Alas, the forecasted growth of the number ofgolfers was over-optimistic and the situation todayis that we have too many golf clubs and notenough golfers. This imbalance of demand andsupply has shifted in the opposite direction andnow the golfer holds the upper hand.
Gone are the joining fees for the majority ofgolf clubs in Britain and waiting lists for manyclubs are a thing of the past. But this reversal inthe power between the golfer and the golf clubhas had its beneficial effects, in particular becauseit has led directly to improved course playing conditionsin many of our golf courses.
During the high joining fee and waitinglist era, many clubs were complacent whenit came to investing in their courses and ultimatelythe condition of the courses was sub-standard. The majority of clubs didn’tcare if they lost one member, as anotherdozen prospective members were waiting in thewings ready to take their place in the club (with the added joining fee of course). Golfers didn’tdare moan about the condition of the course becausethey feared the response coming would be:‘Well you can always go and join another club!’
These days, many clubs are competing withtheir near neighbours for the same business. With the loss of joining fees has come an increase inthe number of nomad golfers who bounce betweenclubs adding to the financial uncertainty facing some clubs. A big challenge today is tomake golf clubs sustainable and financially secureduring these tough economic times. But how canthis industry continue to invest without overstretchingresources and becoming saddled withhuge debts? In this article I hope to present somesuggestions on how to maintain standards whileat the same time keeping a firm grip on costs.
Course operating budget
The first thing I see clubs doing when they face ahard financial period is to reduce the operating expenditure of the club. As the golf course is generallythe biggest asset on the balance sheet, all toooften the course operating budget and capitalbudget head for the chop early on. But is thisright? The main reason a golfer becomes a memberof a club, or wants to play a new course, isbecause of the course itself. It is the club’s greatestasset and sometimes decision-makers losesight of that fact.
However, the chopping of a course budget isunderstandable when immediate savings areneeded. In today’s climate there is a serious situation where many clubs are struggling financially.
What can a club do about it? Pouring money intothe course in the hope that numerous new membersand customers will be attracted is a risky gamble and probably not an option for most clubsin any event. But belt tightening coupled with a serious review of the club’s product is probably the most viable starting point.
As a consultant, I would always advise that, beforeany reduction in the course operating budgetis implemented, a review takes place to test theimportance, cost and benefit of each major itemin that budget. This does not require a major (or even a minor) firm of accountants, but it does require comparative information from the course operating budgets of other clubs.
Although golf is a competitive game and clubs are competitive with each other, this kind of information is easily accessible and quickly reveals which items represent good value and those thatare too costly. The data can be obtained through clubs taking part in surveys with other clubs at asimilar level, or from the experiences of an independentadviser / consultant. The consultant will have gained this knowledge through advising allsorts of clubs, whatever the level.
Then the analysis turns to how the operatingbudget is set. Many look at the previous year’s expenditureand add inflation (or when times are tough, chop an arbitrary 10 or 20 per cent), but is this a reasonable way to budget? Again, comparison of costs on a line-by-line basis with knowledge of the same costs incurred by other clubs may well provide a much more focused and better result. It might mean crucial playing areas suchas tees or greens are maintained at around the same cost level as the previous year because the customer is unwilling to put up with a reduction in playing quality in these areas while a sizeable costcut could take place in areas that are deemed, ‘non-priority’. So the overall condition of thecourse can remain acceptable because cost savingshave been tested then focused, before implementation.
Decisions must be based on facts,not just historical figures.
During the type of review that I advocate, areas where heavy spending was made during the previous year are easily identifiable. Was the renewal of flags, tee markers and hole cups necessary,when a good refurb would have brought them back to near pristine condition? Could some irrigation repairs be done in-house instead of callingout a contractor? Was spiking necessary just beforethe club’s major events, producing negative feedback and a loss of future business? These are all the types of question that need to be asked and answered, but by who? I still see and hear lots of feedback where the course manager /head greenkeeper is not involved in the budgetingprocess, or if they are, then purely as a token gesture before being informed of the budget they have to work with in the coming year.
The role of the course manager / head greenkeeperhas evolved greatly over the past 20 years.Once they were referred to as ‘grass-cutters’ but not anymore. Their role is multifaceted. One day they are health and safety enforcers, the next irrigation technicians and by the end of the week, drainage experts. Cutting grass was the easy bit! The role is becoming ever more professional and these guys are now more technical and increasingly respected.With this comes responsibility. They play a crucial part in any successful club’s operation andneed to be involved in the key decisions and, given the chance, they can save the club money in the long term.
Conditions survey
A growing number of clubs now recognise the benefits of obtaining regular audits of their golfcourses. For a long time, my company, Complete Golf Solutions, has been advising clients to combine their budgeting process with a course audit,or as we like to call them, a ‘conditions survey’.
The aim is to analyse every area of the operation, ranging from the condition of the greens, tees and fairways, to the adequacy and state of the maintainence compound and machinery. Our analysis is often broadened to look into the welfare and remuneration of the staff, training schemes, health and safety and other course-related costs. A conditions survey is not an expensive exercise but the cost will vary depending on its scope. The eventual cost savings can be huge, with immediate savings almost always exceeding the cost of thesurvey.
A conditions survey’s main function is to veteach aspect of the operation, identify areas whichcould be improved and suggest ways of increasing revenue and / or reducing wastage. It will examine the course from a business perspective, not just from an agronomic perspective. Too often, some clubs are unable to combine the different disciplines and simply concentrate on agronomics, and in the end receive little or no return on their investment.
A business plan which combines disciplines ismuch more likely to produce the cost savings nowneeded. For example, when a club’s fungicide bill is identified as overly expensive there must be a reason; usually the greens are too soft and therefore prone to moisture-based diseases. This then has a doubly negative impact on the club’s finances because the greens will tend to get waterlogged in the winter and it will become necessary to close them to play at certain times.
The cure for this problem would be to improve the drainage capabilities of these greens through aeration and top-dressing. The result would not only be an improvement in the putting performanceof these greens, but they would be playable for longer periods, increasing the club’s revenues as well as reducing the fungicide bill!
One of our recent conditions surveys benefited a Leicestershire club that was beginning to lose business because of the poor performance of its greens. From an agronomic point of view, the greens were fine, but their general condition was not up to the same standard as their competitors.
We conducted an audit. We were given abroad mandate and our conditions survey was notlimited to the greens.
This survey was conducted just over 18months ago. The main recommendations to improve the overall greens performance were increased aeration applications, frequent light sand dressings and a reduction in the cutting height to improve the ball roll and speed. The course recommendations were for the fairways to become more defined and for a tighter cutting height on the tees and approaches. Our report included suggestions that would benefit the welfare of the staff and also contained machinery recommendations.
The club implemented our recommendations and the greens are now performing to a very high standard. The staff and members are more highly motivated and proud of their course again. From a financial viewpoint, the club is back up to the membership target number and has even started a waiting list again. And this was achieved without an overall increase to the course budget.
Outside contractors
Outside contractors continue to provide a wide variety of services to many golf clubs. Irrigation system servicing, machinery breakdown cover or bunker renovations are just a few of the examples of outsourcing. But is so much outsourcing necessary?
I have no doubt that the majority of these companies offer a good and reliable service but from time to time the question should be asked: Can’t our own staff do some of this work? Often staff members lack the necessary skills or are not trained but does it make economic sense to offer to train selected staff with a view to progressively reduce the expense of outsourcing?
I have first-hand knowledge of many success stories where clubs have taken certain skilled jobs, such as that of equipment mechanic, and brought it back in-house. At one of our client clubs, the annual machinery repair bill was around £30k. A preventative maintenance programme was set up and one of the club’s own greenkeepers was sent away on a sports turf mechanical course (at a cost of £1,500) and the annual machinery repair bill now runs at about £10k. Of course that greenkeeper’s remunerationhas increased, but the vast majority of this £20k annual saving has gone to the club.
Conclusion
There is no doubt that we are in hard financial times. Many economists believe that things will get far worse before conditions improve and real improvement may take years. Golf clubs need to prepare for harder times grinding on for longer than anyone would like.
There can be little doubt that the greatest asset of most golf clubs is the course itself. Maintaining a golf course to a high enough standard to attract and maintain its chosen market needs ongoing and careful thought. Starving the course operation of resources might save a fewpounds in the short term, but golf courses are long-term assets, and when ill-treated can lose their value all too quickly. Critical decisions on costs are always necessary but they must be based on sound advice that looks not only to the short term, but also considers a longer timeframe.
Complete Golf Solutions is led by Greg Evans MG. Its aim is to give practical advice to golf clubs to help them improve their product. Telephone Greg on 07951 157208 or email him at [email protected]
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