Creating a Business Plan for 2010 for Your Golf Club
As we enter the final few months of 2009, your resort should be well on its way to being finishing, if not finished with its Business Plan for 2010. Yet, I find that in many cases resorts have not yet even started the process. When I ask why the plan hasn\’t begun, I hear a litany of amusing responses, well actually unfounded excuses. A sampling of the feedback includes:
\”We can not 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 create a plan.\” \”We\’re scared of what it might look like.\” \”We tried that before and it did not help us at all.\” \”Our golf management company wont allow us to create our own plan.\”
Any of this strike a chord? Be 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! Very hard work! But like any other hard work well done, it provides amazing 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 almost 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 30 to 60 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 have implemented forecasting where it previously was not 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. It reminds me of a passage from the movie Alice in Wonderland. When Alice encounters 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 does not know. The Cat responds by telling Alice 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. There is much groundwork that must be completed 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 the following:
1. SFSWOT Analysis
This is analysis of each golf resorts departments and the golf resorts overall
Successes
Failures
Strengths
Weaknesses
Threats
Opportunities
It provides a critical self assessment of your golf 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? What are the fees at your competitions club? What is your 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 upgrades and downgrades? What are you doing with Initiation Fees? Do you have financing in place? How will you handle your wait list to join? To resign?
4. Pricing Plan
What price increase will you take this year and when? Will member dues increase? will that cause member attrition? How will you price your golf cart and guest fees? What about F and B. Remember, except for a very few elite Clubs in the Country, cost does matter.
5. The Payroll Planning
What payroll increases are you authorizing for the Clubs employees in 2010? Are the increases job performance based or just increases across the board increases? Is it smart 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 either up or down? Items that can change significantly include general liability insurance, property taxes, utilities, fertilizer, chemicals, and fuel. Have you reviewed these 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 specific timelines and people assigned to carry out the plans? Have you budgeted the needed dollars for marketing to ensure you will be able to achieve the results you need? Check out our industry best website solution for Private Clubs with 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? 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 every department for qualitative improvement? Specifically, are you challenging all of your golf club departments to implement two or three initiatives that either create a better membership 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 another component of a successful business. Do you have the necessary cash to replace what is needed in 2010? Are you going to finance or lease needed equipment? Have you done the analysis? Is your plan at least looking ahead 5 years?
Bob Devitz is the CEO of Legendary Golf Management Companies and is an expert in the operations and marketing of Private Clubs. Bob has over 25 years of experience in the industry, primarily in senior managerial roles with ClubCorp. Bob is a member of the PGA of America. Having worked with hundreds of Private Clubs during his career, Bob brings a results driven, bottom line approach to the Club Industry.
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