Tuesday, December 10, 2013

Are You a Golf Superintendent and a Businessperson or a Businessperson that’s a Golf Superintendent?


You have expended a lot of time and money to earn your degree and labored extensively as an assistant superintendent. Now you are representing a well-respected club that has not only weathered the economic firestorm of the past several years but has managed to add membership and increase club usage. Your golf course is impeccably cared for and of course, you are putting in long hours and hopefully earning a good salary in return.

However, to be successful in golf business today, you must have more than a great education and a pedigreed employment history. If you desire to move up the ladder of success in the golf management field, that means being thoughtful and engaging with those around you. In fact, the attention you pay to detail is the main ingredient that differentiates you from evolving from a golf businessperson to a golf business professional.

Where are you in your evolution from business person to business professional? Picture yourself in the following 16 situations to find out:
  1. You’ve been invited to a prearranged luncheon to give a presentation on golf course conditions by the Tuesday morning ladies golf group, only to find that you are allergic to the main course being served.

    A Golf Business Person asks the server if the meal can be replaced.

A Golf Business Professional plans ahead by making mention of foods that he can eat due to his allergic reaction when accepting the invitation.
  1. You sent an e-mail message to a club board member only to realize that you have transposed two letters in a word.

    A Golf Business Person hopes the board member realizes that keyboarding is not their best strength.

A Golf Business Professional sends a revised message correcting the error.
  1. You are invited to the annual club Christmas Party with your spouse who feels uncomfortable since she will not know anyone there.

    A Golf Business Person approaches the members making sure that his spouse is next to him/her.

A Golf Business Professional briefs his spouse about members that may have interests similar to her and then makes a point of introducing.
  1. You are meeting with a long range planning committee member with whom you spoke by phone one week ago.

    A Golf Business Person goes to the meeting at the appointed time.

A Golf Business Professional confirms the meeting details 24 hours in advance.
  1. You have a 3:00 p.m. conference call scheduled with a golf course architect and a golf course builder for an important sand bunker project.

    A Golf Business Person dials into the conference call at 3:00 p.m.

A Golf Business Professional dials into the call a few minutes prior to the designated time.
  1. Saturday morning on the first tee, while performing your usual PR, you meet a new member whose name is difficult to pronounce.

    A Golf Business Person avoids using the name in conversation.

A Golf Business Professional asks for assistance to correctly pronounce the name.
  1. You receive a telephone call from the general manager who asks you to join him and the Board of Directors for lunch to discuss important changes that may impact the golf course. You are wearing khakis and a golf shirt. You know the rest of the meeting participants will be wearing coats and perhaps even neck ties.

    A Golf Business Person declines the invitation due to lack of required attire and asks the GM to just send the info discussed.

A Golf Business Professional keeps a back-up set of appropriate clothes for just this occasion.
  1. You are attending a meal event welcoming new members from India and have been seated at the new members table. You would like to order beef as your entrée.

    A Golf Business Person orders the beef dish.

A Golf Business Professional honors the culture of his new member by also choosing a vegetarian meal.
  1. You are invited to your manager’s home for a casual gathering.

    A Golf Business Person verbally thanks his manager for being included in the get-together at the end of the evening.

A Golf Business Professional recognizes that a verbal thank you does not take the place of a written note.
  1. You believe it’s important that you to send holiday cards to your board members, committee members, employees and other business contacts that help you during the busy season.

    A Golf Business Person signs his name on each card.

A Golf Business Professional adds a short personal note with each card.
  1. Your assistant is on vacation and you are going to be on the course all day.

    A Golf Business Person checks voice-mail at the end of the day to prioritize which calls need to be returned.

          A Golf Business Professional updates his voice-mail message to reflect his schedule.
  1. You are invited to an early Monday morning meeting at the club.

    A Golf Business Person picks up a Starbucks’ cup of coffee and takes it into the meeting.

A Golf Business Professional drinks the coffee before leaving Starbucks rather than walking into meeting with the cup in hand.
  1. You are at a member reception and are handed a bottle of beer from the bartender.

    A Golf Business Person thanks the bartender and moves on.

A Golf Business Professional requests a glass for the beer.
  1. You drop by club’s accountants’ office that makes time to talk with you.

    A Golf Business Person gets the colleagues’ feedback and then continues to make idle conversation.

A Golf Business Professional gets the answer to the questions and then leaves unless he/she is encouraged to engage in further conversation.
  1. You have been asked to participate in a 10:00 a.m. Webinar.

    A Golf Business Person downloads the webinar as he/she dials into the call.

A Golf Business Professional does a test download the day before to avoid any unexpected delays at the time of the meeting.
  1. You have promised a return telephone call to a Green Committee Member by noon and are waiting for a document from a company that supplies bunker sand who cannot be reached.

    A Golf Business Person returns the call to the committee member as soon as he has all of the information and explains the delay.

A Golf Business Professional keeps his word by getting back to the committee member a few minutes before noon and updates the member with the information he does have.

Mostly, the above Golf Business Professional behaviors have to do with going the extra mile and showing your business colleagues and patrons that you’re the consummate professional.

Society has discarded many of the traditions and business etiquette of years past, aforementioned forward thinking behaviors separated the truly class leaders in business from the “ME FIRST” business leaders.

Dale Carnegie said, “When dealing with people, remember you are not dealing with creatures of logic, but creatures of emotion.”

Monday, February 25, 2013

Private Club Capital Campaigning

Is your cousre feeling a little rough around the edges? Are you spending too much money on maintaining tried sand bunkers, irrigation system or overused practice facilities? Are your maintenance and repair costs rising to accomplish the same level of maintenance just years ago? If you answer "yes" to any or all of these questions, it's time to begin thinking seriously about mounting a capital campaign. Especially after the economic downturn and the resulting deferred investments in capital now may be the time to embark on a needed capital project.

If the thought of raising a lot of money in a relatively short time for capital improvements gives you pause, here's a word of encouragement: it is easier to raise money for capital campaigns than for annual operational funds. That's right: capital campaigns are "money magnets!" Why? First, capital improvements are tangible: imagine your club members and their families marveling at the all new practice facility and thinking to themselves: "My $2,500 helped pay for this!" It's easier for a donor to get his or her mind around a capital gift than a one-time, member-wide, large assessment.

Second, capital campaigns offer tangible opportunities to truly change the face of the golf course. While some donors prefer to give anonymously, most love to be honored and feted. Capital campaigns afford the opportunity to honor donors by naming buildings, wings, rooms, even golf course renovations after them. How about naming a new greens construction project after the club members of 2013 on a commemorative plaque in the clubs trophy room!

By the same token, the decision to initiate a capital campaign should not be made lightly. Your readiness to undertake steps one, two and three below will help you assess your readiness to mount a capital campaign. If you are indeed prepared, steps four through ten will help ensure your success.

Step 1: Make the Case for Capital Improvements

The fact that your staff would like a new maintenance facility is no justification for a capital campaign. Successful capital campaigns depend on convincing members will be better served as a result of the capital improvements. Don't succumb to the "edifice complex:" I.e. "We've been around for a long time and we deserve a bigger and better maintenance facility and a staff Jacuzzi." Donors will not be impressed by your proposed capital improvements unless you can demonstrate that your clients will benefit or your business will benefit with improved safety and efficiencies. Additional under-roof storage areas, better equipped equipment shop an expanded employee locker room, space for lodging interns. The bottom line, fundraising is an emotional business every bit as much as a logical one; your job is therefore to create "emotional resonance" by showing how member’s facilities will be improved by the proposed capital improvements. 

At this stage, the "case" need only be a couple of sentences. An example might read, "The Happy Members Country Club has a 35% increase in members and a 45% increase in play in the past five years. New equipment to help make the course playable sooner with less player interference has paid dividends towards an overall increase in golf membership and better maintained course. This new equipment purchased in 2012 needs to be stored and maintained properly to ensure its long life; a new maintenance facility will house all equipment. In addition an intern housing facility will save the club labor expenses and attract the brightest minds studying to be golf course superintendents. These additions will elevate Happy Members country to truly the best club in the metro area.”

Later in the capital campaign process, the case will serve as the basis for a "case statement," which is a handsome document designed to convince donors to make significant contributions to your campaign.

Step 2: Locate a Site, Prepare Architectural Plans and Draft a Campaign Budget

Once you have determined that you do indeed have a saleable "case" for the campaign, the next step is to develop conceptual architectural plans. If your capital improvements will occur on your present site, you still need to prepare these plans. Donors will not buy "a pig in a poke;" they will insist on knowing what the improvements will be.

Do not fall victim to the assumption that, because you can make the case for the importance of the improvements, donors will fall in line whether you have the architectural plans or not. For example, it is one thing to demonstrate that your club has added play and membership because of course improvements. It is something else entirely to show donors that you have a new maintenance facility in mind, and that you have detailed architectural plans and a drawing of the new facility in hand.

Step 3: Determine the Financial and Organizational Feasibility of Proceeding with the Campaign

You are now ready to conduct a feasibility study to determine whether to go forward with the campaign. Some companies hire consulting firms to conduct feasibility studies, though there are certainly instances in which the study has been done by a staff person familiar with a member that will act as a flag bearer. The principal value of hiring a firm is that the folks who are interviewed for the study will often be more comfortable and forthright in talking with an "objective third party" than with a staff member.

The typical feasibility study involves 30 to 40 interviews of current and past board members, current club staff, committee members and a cross-section of members at large from differing age groups and membership categories." The person leading the study will also conduct formal research on those focus groups that are the "best bets" to make the largest impact to the campaign.

 The purpose of the interviews is five-fold:

• To determine how your organization is viewed in the eyes of supportive members;

• To determine whether your club understands the importance of the proposed capital improvements with regard to member service, other capital investments and overall staff safety;

• To determine whether you have access to financial resources sufficient to reach your campaign goal;

• To "light a fire" under prospective membership categories by inviting their input about your proposed campaign;

• To assess your organizational infrastructure and its ability to handle all the particulars of a capital campaign, as well as membership volunteers and committee member’s capacity to solicit contributions.

Feasibility study "passing grade" means that your membership appreciates the work of you and your golf maintenance team, understands the value of the proposed capital improvements, and has the financial resources to put the campaign over the top, and that your organizational infrastructure is sufficient to handle the rigors of a capital campaign. An example would be, "In preparing the feasibility study for the proposed new Golf Course Maintenance Facility, McMahon Group interviewed 38 men and women, including past and present board and current staff members as well as current membership in the equity class. We also identified the golf committee and green committee members that we believe would be interested in making additional funds available through an annual benefit golf tournament. It is our considered opinion that the Happy Member Country Club can indeed support the $1.7 million that it will require to build the new golf maintenance facility through individual member pledge, the annual golf tournament and a slight capital dues increase."

Step 4: Assemble a Capital Campaign Committee

Assuming that your board of directors has concurred with the feasibility study recommendation to proceed, the next step is to put together a well-connected, hard-working campaign committee. The committee should include members of your board, appropriate staff, and other volunteer members who care about your golf maintenance operation, understand the importance of the campaign and have the time and willingness to see the campaign to a successful conclusion. Don't worry about having too many people serving on the committee, but do make sure that everyone who is invited to join is committed.

The chair of the campaign committee should not be someone who is currently a board or green committee member. Rather, the chair should be a person of means who is comfortable both serving as the "point person" for the campaign (e.g. - addressing the membership at gatherings after golf, in the club at special events and on the course, on behalf of the campaign) and soliciting significant contributions from member colleagues and friends. The committee is responsible for overseeing the entire campaign. It is common to break the full committee into subcommittees to handle much of the campaign detail work.

The full committee should meet every two or three months for the duration of the campaign; the subcommittees should meet as appropriate, though it’s advisable to encourage regularly scheduled meetings.

Step 5: Plot Your Fundraising Course

Capital campaigns may depend on as many sources of funds: additional capital dues, direct donations from members, tournament proceeds, etc. The capital campaign committee must decide early in the campaign whether or not to include a capital dues proponent in the funding scheme. In either case, the committee must review the sources of funds above and determine which offer the most significant opportunities.

A word of advice: most private club capital campaigns depend more on capital dues increases than individual gifts for funding. The determination of people of means who are close to the campaign to “bear the flag” is the key to the huge majority of successful private club campaigns.

All fundraising campaigns have three phases: research, implementation and follow-up. It is commonly accepted that the most important is research. When pursuing a contribution from a membership, your club must conduct research to amass all relevant information. Research is the responsibility of the campaign consultant or staff.

At the beginning implantation stage with reference to modest individual donors, it is recommended that possibly the green committee conduct a campaign via mail, e-mail or telephone to solicit smaller gifts to begin the research stage. These gifts are valuable in two ways: they are campaign revenue and they are "good advertising" in the effort to secure a capital dues increases. It is powerful evidence of membership and committee support for your capital campaign to demonstrate that, say, 100 people responded to your direct mail effort with an average gift of $250. This may represent only a fraction of your campaign goal, but it will show other donors that the membership "means business" about the campaign.

Step 6: Prepare a Campaign Case Statement

If your campaign is to succeed, you must prepare a handsome document that communicates the case for the campaign. The case statement contains four elements:

a. A description of your maintenance team and committee members, including important past accomplishments and plans for the next three years.

b. Architectural plans and a drawing of the completed/renovated facility.

c. An explanation of how services to your members will be improved as a result of the capital improvements.

d. Information on how people can make individual contributions, what capital dues might become and the individual and group recognition opportunities that await them.

One of the most noxious myths in the private club world is "If our written collateral looks too good, members will think we're spending too much money on these materials and not enough on membership programs." If you are to make headway with your capital campaign, you must convince all members that your organization is a serious about this capital plan. Nothing communicates this seriousness like a case statement on high-quality paper that boasts attractive photographs and imaginative design. Scrimping on the case statement is a classic case of "penny-wise, pound-foolish."

With regard to recognition opportunities, capital campaigns provide a marvelous opportunity to honor donors by naming buildings, rooms, even golf features after them or their group. Do not take this lightly: some donors will be at least as interested in having their names emblazoned in a handsome plaque as they will be in supporting your worthy cause. Give donor recognition the time and imagination it deserves.

Step 7: Ask Campaign Committee Members for Their Gifts; Train Them in Major Gift Solicitation and Schedule Meetings with Major Gift Prospects

The "engine" of most capital campaigns is major individual gifts. Capital campaigns should be "front-loaded;" that is, you will succeed if you get an impressive number of large donations early in the campaign. Also, more modest individual donors-solicited by mail or e-mail-will make contributions once they see that their "big brothers and sisters" have made large gifts.

The capital campaign committee must therefore hold a brainstorming session to locate those men and women who might make major gifts. Categories of prospective donors include:

• People who have given to your organization previously and who have the capacity to make larger gifts;

• Member friends, and colleagues of committee members;

• Vendors to the organization;

Remember: "Charity begins at home." Prior to soliciting major individual gifts, each member of the capital campaign committee must make a capacity gift. Obviously, "capacity" means different things to different people: for some folks, $500 is a stretch, while others can comfortably give $10,000. The chair of the committee must visit or telephone each committee member and ask for a donation. The more the committee gives, the easier it will be to convince other donors to make sizeable contributions. A corollary: be sure to recruit people to the capital campaign committee who have the wherewithal to make significant gifts. We don't expect that everyone on the committee will be wealthy, but the more money that can be generated by the committee itself the better.

It cannot emphasize too strongly the importance of training committee members in the art and science of major gift solicitation. It would be foolhardy simply to send committee members out on major gift "asks" without training them first. Capital campaign committee members must focus on four things in their preliminary training:

• Vitally important fundraising concepts, including "People give money to people;" "fundraising is done from the donor's perspective, not the applicant's;" and "success breeds success." These concepts provide the theoretical underpinning for the balance of the training;

• Exercises to help committee members overcome their fears of fundraising and to help them deal with the criticisms and concerns that may be voiced by prospective donors;

• Specific instruction in how to make the "ask;"

• A role-playing exercise to give committee members a concrete sense of how it feels to make these solicitations.

Once the training is over, committee members must get on the phone or on e-mail to schedule meetings with prospective donor members. The committee chair has an important role in "nudging" committee members to make these calls.

Step 8: Hold a Kick-Off Event and Solicit Modest Individual Donations

Once you've raised approximately 15% of your capital campaign goal, it's time to move from "the quiet phase" to "the public phase." It is recommended that you hold a splashy kick-off event to announce to the world that you have exciting plans to erect a new maintenance building or renovate an existing one. You may wish to have the event at the building site; the upside is that members can see exactly what you need to replace and what you have in mind. If, however, the site is too dirty, dangerous or otherwise undesirable, there is nothing wrong with holding the event at the club, or even at the home of a board member or major donor.

The reason to hold a kick-off event is not to raise money on the spot, but to give your campaign a broad member profile. It is therefore imperative that you begin to make notice through the clubs newsletter and website. Be certain to have copies of your case statement handy. You certainly should have a formal program, but keep it short. Likely presenters include your board president, golf professional, club manager and architect or planner. Make sure, too, that you display detained conceptual plans, as well as a drawing and perhaps even several views of an artist’s rendering of the completed facility.

Following the event, begin to solicit modest individual gifts via direct mail, e-mail or telephone. While these gifts will not be large, they have great advertising value. Major donors are impressed when they see that other members have "stepped up" and made contributions to your campaign. This will smooth the way in securing those major gifts.

Step 9: Capital Dues Increase

Now that you have acquired seed money and proved to the membership at large the merits of your project; introduce a monthly capital dues increase. A polling of the membership to acquire an amount that would be likely acceptable would be wise prior to the formal vote to increase capital dues.

If you have raised $150,000 in steps 1 through 8 and the total project cost is $1.5 million you will need to secure a commercial loan for $1.35 million, these are the costs:

• Assume a 15 year note for $1.35 million;

• 350 dues paying members;

• 5.5% interest rate;

• $31.52 per month dues increase would fund the loan.

With capital projects that have a direct impact on increasing the value of the club’s property often times other member categories are ask to contribute a small percentage. Senior and junior members may add a 5% capital dues increase which would have a positive impact on a full member dues increase.

Other fund raising ideas are ongoing annual charity tournaments can also have an impact on funds needed. Some clubs use a check-off system on golf cart rentals and guest fees.

Step 10: Celebrate and Acknowledge Your Donors

Once you've successfully completed your campaign-on time and in full, we assume!-bring capital campaign committee members, donors, and other "organizational intimates" together at the site to party the night away. Be sure to have a short formal program in which you thank everyone who was instrumental to the campaign's success. Remember: today's capital campaign donor is tomorrow's annual fund supporter, so view this as a link in a long chain.

There are many more moving parts to the process than described above. But seeing a new irrigation project or maintenance building completed is the goal. These hard sell capital projects may take years to complete but they all begin somewhere, it just might have to start with you.

Thursday, January 24, 2013

McMahon Report Newsletter

The McMahon Report:

It's a bi-monthly newsletter with information about the private club industry. See it at Current McMahon Report#

Or for more information on McMahon Group please visit www.mcmahongroup.com

Wednesday, January 16, 2013

A Quick Primer on Golf Course Maintenance Operating Costs

I truly believe most people understand there are two basic ingredients to running a successful and profitable business of any kind, be it golf or widget manufacturing - income and expense. The golf owner/operator has much less control over income, yet there’s generally more emphasis geared towards increasing income. Controlling expenses is equally important as increasing income, as far as profitability’s concerned. After all the basic equation for profit (or loss) is income minus expenses.

Controlling Operating and Fixed Expense

There are two categories of expenses generally associated with any business, fixed and operating expense. Fixed expenses remain somewhat constant overtime, (insurance, utilities, leases, taxes, etc.). Since they don’t fluctuate, the focus of this article will be on operating expense or more exact - variable expenses. Operating costs generally fluctuate with operating activities to some extent (it takes longer to maintain a course with heavy play). Golf course maintenance is generally a production environment, expenses change along with an increase or decrease in production.

Examples of Operating Expense:

• Hourly wages

• Chemical and fertilizers

• Equipment maintenance

• Supplies

• Rentals

• Services

• Training

Operating Expense as a Percent of Gross Profit

Since operating costs are directly related to operating activities, they should be analyzed as a percentage of gross profit. The equation for the percentage is to divide gross profit into each individual operating expense. At the end of each month, calculate the percentage of operating expense to gross profit from the income statement. Once the percentage is calculated, these percentages can be compared to historical data and budget figures.

Expense Control Budget and Forecast

In order to create a budget, the forecast must be created first. The budget is simply a tool that helps control operating expense. The expense budget forecast, oddly enough, is basically a prediction of future income. Once the income forecast is created, the historical percentage of operating expense to gross profit is used to create the overall golf course operating budget in conjunction with a standard of maintenance. The calculation or percentage of gross income for each individual expense account should be used for creation of the budget.

Once the budget is created, expenses should be monitored by the superintendent so that expenditures are kept within the budgetary limits. If any specific areas of expenditures are exceeded, further analysis to determine the root cause should be undertaken. For further analysis of root cause, look at the general ledger expense accounts.

General Ledger Analysis of Expense Accounts

If an operating expense exceeds the budgetary limits, researching the general ledger for the offending expense account should provide the root cause. The majority of the postings to an expense general ledger account comes from the purchase journal. Analyze the purchase journal and look for postings out of the ordinary (miscoded expenses are often a culprit). Also look for dollar amounts that seem unusually high. Often the root cause will stick out like a sore thumb.

In conclusion; it’s best to concentrate on controlling operating expense. Operating savings dollars move without related expenses directly to the bottom line, (no advertising, or cost associated with legitimate savings that do not influence or add to deferred golf course maintenance). A budget should be created and expenses should be contained within the limits of the budget. If expenditures exceed the budgetary limits, further analysis should be conducted to determine the root cause. Following these simple guidelines should help to increase the profitability and financial health of your golf facility.