Changing your perceptions
Before you can really assess your own business’ financial operations objectively you need to get into the right mind set. As managers you need to look at everything with a critical eye. You need to approach each department or situation by asking yourself and your team – how things can be done differently? We know that this is difficult when you are a part of the organization every day.
To really look at your operation critically, you need to remove any preconceived ideas about three things:
1. People. What is important to review is not the people themselves but their responsibilities. How much do you pay them, what are their main job duties and responsibilities, how many hours do they work, what is their vacation pay (or time) and what do they ultimately contribute to the business? Does each position have a clear job description and clear goals that they can be held accountable to? Personalities are not a part of this review.
2. Members. In some cases members are the life blood of a golf course but in others they can be a financial drain on the operation. How much time does your team spend managing the members themselves, their events, their needs, their complaints etc. How much revenue do the members contribute? What benefits does your membership bring to the overall operation of the club? In many cases, it’s not their business, it is yours.
3. History. You have to wipe the slate clean if you are truly going to move forward. The most over used phrase we here when we work with a golf course is “this is how we’ve always done it”. You will have to open your mind to doing things in a different way. As Albert Einstein said, “if you do the same thing over and over again, how can you expect different results”. You can’t. So you must be open to change.
We hope that you will keep these thoughts in mind when reviewing your operational expenses.
Golf Shop Operations
Golf Professionals are generally passionate about how their golf shop looks, the retail displays and what products they sell. They usually spend a good deal of time on retail operations. However, this is time that they spend on something that often contributes very little to the bottom line. As a public or semi-private golf course the biggest portion of your Golf Professional’s or Golf Shop Manager’s time should be spent on growing green fee, power cart and driving range revenues not on retail operations.
Our top 5 areas to look at are:
1. Hours of Operation. While never popular with golfers just open later. Period. Many courses feel the need to open as soon as it is light enough to play. This means opening to serve one or two groups in your first 30-60 minutes of play. Analyze your tee sheet and open as late as you can to save labour and maximize use of the golf course. A few groups of golfers will need to adjust their schedules but invite them in for coffee and explain the why. (This change will also make your superintendent happy and a happy super is just as important as a happy bookkeeper).
2. Retail Products. Minimize your retail operation to the items that have good sell through. Run reports for the last two years on your top 20 selling products. Get rid of most in-stock hard goods. Keep or open accounts with key vendors you have used in the past but promote and focus on special orders (not just for golf clubs). There are many vendors that stock product all year long so that you can special order accessories, carts, bags, shoes and even clothing. There is no need to carry continuously changing hard goods that get shop wear and are discounted at the end of the season.If you do retail this way, your profits and profit margin will improve and so will your customer service.
Restaurant Operations
Food and beverage is a tough nut to crack. Typically you spend 90% of your time on it when it might, under really good circumstances, generate a 10% contribution to your bottom line, particularly when attached to a golf course. Expectations, hours of operation and pricing demands from members or locals are often difficult to manage. The profit margins are typically low while the time spent managing costs is high. Trying to keep your customers happy is an on-going battle.
Our top 5 areas to look at are:
1. Event Costing. For every banquet, special event or tournament that you hold in a season have your chef complete a cost analysis. We are already going to assume that you have priced your menus according to the profit margins that you hope to make but costs change during the season and labour has a way of creeping up. Your cost analysis spreadsheet should include the actual revenues from the pre-booked banquet meal plus all incremental revenues – bar sales, decorations, room rental etc. taken from the actual receipts of the day. These should be compared to the actual labour worked (cooks and servers) and an estimate of the the costs of the inventory consumed (based on your expected margins for each category). If this analysis does not show what you hoped it would then you need to look at your labour before your next event and/or re-price your menus before booking more events.
2. Hours of Operation. Reduce your operating hours. Opening prior to 11am is a waste of money. Sure a few people may be upset but this time of day is not profitable (by a long shot) for almost every golf operation. Look at your reports. When does it start to get busy enough that sales will, at minimum, pay for a cook and a server? Just like opening the first tee later in the morning, this will also not be popular with a few customers, but it is necessary and will improve your financials.
You can offer coffee and packaged product for sale in your golf shop to keep your golfers happy. You will find there is no increased staff costs and you will generate some revenue. We have even seen clubs (usually private or with a large membership) provide coffee and muffins for free because this is actually less expensive than opening the restaurant.
Grounds Maintenance
Golf Course Superintendents don’t like us (Jeff specifically) when we start with a new project/ golf course. This is because golf course maintenance is typically the highest expense at any facility and the first one we look at. It is also an area in which the most efficiencies can usually be found if the team will keep an open mind. Superintendents are a bit like goalies, sometimes they can be a bit different, which also translates into making it harder to communicate with them.
To make grounds maintenance changes that impact the bottom line of the operation with minimal change to the condition of the golf course you need to get your grounds team into a new mind set. With every job they do, they always need to ask… is there a better way to do this?
Our top 5 areas to look at are:
1. Fairways. Don’t stripe your fairways. If you change your cutting practices from the traditional striping to an arena style cut you will save time and money. With an arena cut the mower does not need to stop and lift the blade to turn around at the end of a stipe, it simply keeps moving, like a zambonie. You may have even seen this style of cut on a few televised PGA events last year. It is becoming more common and can save up to 12 hours of labour per week.
2. Rough. Let your rough grow. Rough is meant to be a penalty, even if your regular golfers don’t think it should be. If you are cutting your rough shorter than 2” in length you are cutting it to short. This generally would mean that instead of cutting your rough twice a week you can now schedule your crew to cut it once every 7 or 8 days. In the spring (especially during a wet spring) rough that is 2” will seem long. It is longer than what your golfers are used to. However, in the summer months rough becomes dry and wispy and is easier to play out of anyway, regardless of the length. You can trim 6-8 hours a week making this change.
Marketing
Marketing is changing daily and moves very quickly. For the most part we do very little with traditional marketing (print, T.V. and radio) although they still have a place depending on what you are trying to accomplish. However one thing in particular that we still see from golf courses doing traditional marketing is generic (we call it awareness advertising – a generic ad without a specific offer). We feel that if you need to do this type of marketing you have bigger problems (ie. people don’t know you exist).
We’ve specifically been focused on five key areas to grow top line revenues through marketing efforts.
Our top 5 areas to look at are:
1. E-newsletters. This is still your most effective (and low cost) way of distributing your promotions, specials, updates etc. Yes newsletters are a communication tool but they really are all about the clicks, how you export them and most importantly how you follow-up with the warm leads who have clicked on a link.
Once your create and send a newsletter you should evaluate the results 72 hours after it is sent. Look at the open rate, how many subscribers opened the newsletter. Look at the un-subscribers to see who they were, but don’t worry about this stat. If they don’t want to hear from you, no problem. You would rather have engaged subscribers anyway. Look at the clicks to the various links in the newsletter (all newsletters should be link heavy) and then follow up!! Follow up may be in the form of another mass email with secondary content related to the click, or it may be in the form of a personal email from one of your team members if you were selling something specific like a membership, banquet, lesson package etc. This is how you use your newsletter to sell.
Are your staff ALWAYS in ‘grow our email database’ mode?
2. Website. This is the hub where all your marketing efforts (like your newsletter) funnel too. Pay attention to your website and regularly update the content with pages that have unique URL’s (you’ll need them to link to). At minimum you should review every page on your website quarterly (if not monthly) and make as many updates as possible. The more ‘fresh’ your website is the higher you will rank in purely organic searches.
Your call to action (phone number, email address, booking engine) need to be a the top of your website. Let your potential customers know what you want them to do when they land on your website. And absolutely make sure that your website is mobile friendly. PLEASE!