Henry DeLozier |
As the 2013 budget season gets underway, owners, operators, superintendents and managers are finding that knowledge is far more valuable than a calculator or spreadsheet. If you have budget responsibilities, here are five insights to help you map your facility’s financial plan.
Although traditional equity memberships have fallen into disfavor at many clubs, club membership – the desire to be a part of an exclusive group with common interests – remains attractive across diverse market segments and geographies. The trick is to offer flexibility that encourages consideration. For example, many clubs are adding new members through local marketing and programs that promote low-risk, easy-to-access memberships. Non-equity, non-voting memberships that require a one-time joining fee are attractive in many markets. While the price range varies by market, the value is in attracting and keeping dues-paying members. Discovery or trial memberships are also a useful method for attracting potential members who want to try the club before making a financial commitment. Trial memberships often offer attractive joining fees and dues that are similar (if not the same) as regular dues. In addition to discovery memberships, international and generational memberships are finding market support.
Management teams can reduce this cost escalation through consumption control and procurement practices. Participating in procurement programs, which take advantage of volume-purchasing, can partially mitigate cost increases. If in doubt, ask one of the large procurement services to show you how much it charges customers for certain products and then compare your costs.
Most alert club leaders have developed a compensation strategy within the club’s overall business planning model. Many clubs deferred bonuses and pay increases for a year or two during the depth of the recessionary cycle. But most have begun to acknowledge the critical and competitive importance of retaining top-performing employees. As such, overall compensation for the club segment will increase in 2013; the turnover of poor performers and continued reductions in force will be used to combat these increased labor costs. |
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