Happy Birthday Eldrick, I Just Couldn’t Resist!

By Michael Vogt, CGCS

Eldrick Tont Woods (born December 30, 1975), better known as Tiger Woods, is an American professional golfer whose achievements to date rank him among the most successful golfers and sports figures of all time.

It’s not news - just my commentary, this story and the news swirling around is just too good not to pontificate about.

What a train wreck this kids life turned into! How come superstars with all of the talent, money and opportunity find themselves making the poorest decisions in their private lives?

Do they see themselves as untouchable?

Hello, is anybody home?

Millions of dollars and his squeaky clean reputation have all but evaporated from Tiger’s life. One day the darling of the golfing world, the next day a cavorting cad.

This story is so big nobody knows where it will end. Many women, coast to coast secret meetings, cocktail waitresses and the stories go on and on.

The bottom line, I would suspect history will remember Tiger for all of his great accomlishments on the golf course. I sure hope Mr. Woods' name will not be used in comparison with Arnold, Jack, or Tom not for lack of golf ability, but for lack of common sense.

Hey Lefty, the doors open, here’s your chance!

A Full Asset Reserve Study Report, for Private Clubs

By Michael Vogt, CGCS, CGIA

When assembling a long-range plan for properly funding capital projects on the golf course, a club manager, superintendent, and green committee should know when the funds will be required. A sound plan must provide the appropriate amount of funds to meet the needs of each golf course component, feature, or piece of equipment. A stable contribution to a fund that supports capital replacement will guard against the diminishing of the long-term and short-term assets for the golf course. A funding plan should not very wildly from year to year; it is recommended that funding a capital replacement plan be done on a monthly allocated basis to avoid large sudden expenditures that upset a club’s normal cash flow. A reserve study for golf asset replacement is good business and makes good sense.

A Reserve Study for a golf or country club consists of two parts, one: Physical Analysis (visual inspection by a golf course expert, architect, engineer, kitchen expert) that result in a comprehensive inventory of design / equipment elements and a prioritized schedule of future replacement costs; and two: The Financial Analysis that recommends a minimum and stable level of funding into a reserve account over the next 15 to 20 years, so your club has the money for capital projects when it is needed. The well executed Reserve Study becomes the basis of your long-range financial plan to provide continuity and dependability for maintaining a high quality course for years to come.

The report below is a comprehensive study for your examination; I believe you will find the true value of such a study to the club’s long term strategic plans.

Existing Conditions Asset Reserve Study Private Country Club
 

At clubs today, the need for long-range planning is paramount to each club’s success. Many of the distressed clubs in this economy have poorly planned for future funding of capital and are now paying the price though diminished memberships and facilities that are becoming less than adequate. While day-to-day club and course maintenance is vital, the truly wise clubs have forward thinkers and have a plan for continuous improvement to the club facilities and golf course and its associated buildings and equipment.

Private Golf Vitality

By Michael Vogt, CGCS

What Can Be Done
How interested are you in saving the vitality of your club? Do you think the present day economy will right itself and all things will return to 2004?

Even semi expert management of golf clubs during golf’s golden years kept members happy and sustained sufficient membership numbers to pay the bills. We all remember the day when members waited in line, cash in hand to become a chosen brother of the private club. 5,200 private clubs in the USA in 1990 compared to 4,700 clubs today, and it’s said that a full 20% might be heading for some type of financial difficulties in the days to come.

Top tier clubs have very little to be concerned with, these clubs still enjoy a very stable membership and have the resources to make decisions as the leadership sees fit. The clubs that fall below the top 10% are the clubs that apparently are struggling with capital funding, payroll and even supply purchases during the difficult spring season lag between winter and full play (income) season.

If your team is busy with recession strategies and where and how to economize I would suggest you call in experts that can guide your business though the next few years. Clubs that emerge from this perfect economic storm will become leaner, understand their memberships needs and continue to offer the great service that great clubs have been offering their members for years.

We Can’t Save the Club into Prosperity

We know in business you can’t save yourself into success, simple cuts in payroll and goods will not produce the needed results in the private club world. How many clubs must we witness falling into the death spiral before our collective group of managers and club leaders comes to realize our club is next? The National Golf Foundation has reported that since 2000 golfer participation has fallen off by 16% across the board. I feel we need to stop blaming the lack of time on golf’s loss of participation. Granted, in this day and age we have many choices to make when it comes to leisure time, is four or five hours over the top when it comes to a round of golf; I think not. Golf has just gotten to expensive, period.

I of all people know what it costs to prepare a golf course for play each day. The math is this:

300 members, $950,000 annual operation / maintenance budget = $3,166.00 per member

Loose 50 Members

250 members, $950,000 annual operation / maintenance budget = $3,800.00 per member

That’s just operation of the golf course, not funding depreciation (building and equipment), not accounting for overhead in the clubhouse, losses in F&B, golf car lease expense, and taxes and insurance. In addition the golf shop payroll is never paid for by sales in the golf shop. $263.98 per member per month just to maintain the golf course! Or, if the club does 10,000 rounds, that's $95.00 per round before any other expenses.

Family Friendly

The reason for golf and golf club’s utilization fall – off has many folds. One that gets the most attention is other family functions. While this may be true a family focused club environment has been proven as a hedge against dwindling utilization. When a club can realign it’s demographics to attract a younger average membership and cater to the up and comers the clubs chance for survival increases dramatically.

Fitness facilities are becoming the most requested addition to club renovations. Children’s programs are fast becoming the glue that cements the golf operation together, and family golf programs are sure bets for attacking increase club use. Savvy golf professionals have discovered that untapped market of family instruction, play and competition at clubs can increase use in all aspects of the clubs business.

The safest and most accurate way to find out what makes your club tick is a comprehensive survey of the membership. Only a well executed survey will reveal what the clubs membership really is looking for in your social offerings and facilities.

In summary:

• Poor performing clubs will not survive,

• Clubs today are not and should not be your fathers clubs,

• Family focused offerings will increase revenues, participation and satisfaction,

• Cutting expenses will not fend off disaster; only postpone it,

• Only the finest clubs with a clear mission and vision will thrive in down economies,

• Experts in the club business have the knowledge, ability and proven techniques to help design a clear path through this poor economy.

From golf course maintenance to a reinvention of the club; now is not the time to save your club into bankruptcy. Making bold, well informed changes will increase membership loyalty and utilization, leading to a vibrant club with members for life.

What is Business Acumen and how do I Get Some?

By Michael D. Vogt, CGCS

Busi•ness
The occupation, work, or trade in which a person is engaged

Ac•u•men
The ability to judge well; keen discernment; insight

If you possess Business Acumen you should have a keen sense of the entire business you practice.
Here’s the short list on the areas a golf course superintendent should be proficient in:

Budgeting                    Accounting
Public Relations           Agronomy
Writer                         Human Relations
Speech Presenter         Mechanics
Electrical                     Plumbing
Landscaping                Construction

The more business acumen the superintendent possesses the more valuable they are to the club’s business. Decisions made daily will have a dramatic impact not only today and tomorrow but in future years.

Consider a basic comparison: In match play golf, it’s necessary for players to know how match play is scored as well as how to play the game and change or affect the score. In business, financial literacy is the understanding of the score (financial reports) and business acumen is the understanding of how to impact your business (through the nuances of the game and strategic actions) through business decisions.

Over the past year we’ve heard the drum beat “How do we cut costs?” or “How do we increase revenue?” Management and leadership will understand and take into consideration the far reaching impact of today’s decisions and make the important connection between performance and results. Increases in performance / efficiencies will undoubtedly deliver the same or better results without significant increases and perhaps even decreases in resources.

Complex financial decisions should not be myopic. All financial cuts and expenditures for that matter will ultimately be rolled-up into the larger organization. Keen business acumen will enable departmental decision makers to understand how they are tied to the organizations ultimate goals and objectives.

The Main Players

Golf pros are hired mostly because of their ability to play golf, teach golf and cajole with the membership.

Golf superintendents are normally hired for their ability to grow and maintain fine turf in less than perfect environments, although wearing many hats the agronomic expertise is the main reason a superintendent is placed.

The general manager is the business leader at the club. Often introduced into the club business from modest beginnings (food and beverage worker) a GM is charged with the rudder of the clubs financial ship. The general manager must process in very high degree of business acumen. The GM’s ability to teach and share this needed skill to the club’s management team is critical to the sustained success of the club.

Department heads at clubs all over the world can no longer afford to make business decisions in a departmental vacuum. All of the clubs leadership and managers have to be on the same page to ensure the business operates under a shared goal.

Who Needs Business Acumen?

Tired of hearing about Southwest Airlines? Well it’s hard not to use this company as a shining example of HOW to do business.

Founded in 1971 with 38 years of profitability, the airline has been recognized for the motivated employee culture it has created from the highest level of management to the newly assigned baggage handlers on the tarmac.

Certainly there are many factors for Southwest’s success but one deliberate philosophy of management may be the foundation for this organization’s phenomenal success. Southwest involves all employees in the financial results of the company. Furthermore, Southwest trains its employees on how the read and understand these financial reports.

Southwest also stresses that no one person can make the business successful, employees and their daily activities are the companies driving force to keep costs down, saving resources in incremental ways Southwest can keep the costs of doing business low. The airline industries average for cost per seat per mile is now over 10 cents, Southwest airlines are 6.5 cents; that was close to the industry average 25 years ago!

I am definitely not advocating managing clubs like Southwest but what we can learn here is that this business acumen philosophy makes sense for the club business.

Business Acumen Bottom Line

Why shouldn’t the golf pro know how many dollars are spent on fungicide treatments on greens or the superintendent know what the food cost was last month. The clubs overall success depends on the team, not any one department of the team. Like it or not, profitability is not a word that should be banned from the club. Making a profit on golf or F&B can fund needed asset improvements and add value to the club over the long term. We’re all aware of the clubs with superior facilities in a particular market will have a better chance at member retention and recuitment.

Now more than ever clubs and more specifically managers are realizing that when members of the clubs management, professional and labor segments understand the numbers and what they mean to the overall health of the club the club’s short and long term objectives can be obtained.

With widespread understanding and the required business acumen, clubs can have educated, knowledgeable and motivated employees. With this business acumen asset, those will be the clubs that are best positioned to succeed though this private club business turmoil.

Every Action has an Equal and Opposite Reaction

By Michael D. Vogt, CGCS, Amateur Fly Fisherman

Fly fishing has always been the ultimate escape from the everyday for me. No phones, no TV, no hustle and bustle, just quiet, the river and the fish. Last weekend was the first in a long time that the rivers were at a manageable stage, due to rains this year the river levels have been too high to go fishing. Last Saturday around 4:30 am I jumped out of bed, packed up my waders and assorted fishing gear and drove to my spot on the Current River, about 2½ hours from my home.

Upon my arrival I rigged my high tech graphite rod, (a 4 weight, 6½ footer) just right for those tight quarters and light trout. Waders, boots, my lucky hat and I forged a path to a secluded spot about 3 quarters of a mile from my car.

The first cast of the day I was fortunate enough to hook into a small rainbow, about six inches of picture-book beauty, a quick 5 minute fight, non-eventful release and back to casting over gin clear Current River. That fuzzy little #20 Zebra midge was a good guess for today I thought. Not too many more casts and I struck on another picture perfect rainbow, this guy was a little bigger, no record but eight or nine inches, if it weren’t winter season, catch and release, I might have kept this one!

After a one hour lull in the action I was beginning to think the peak of fishing of the day was over until I sighted a good sized rainbow holding in a small pool about 20 feet from where I was standing in the river. The trout was just holding there, waiting for food to drift by. I moved in his direction as stealthy as I could, I was now wading in water just about waist deep. I took my shot and cast that midge just upstream from him; he took a quick look but no strike! I again casted a quick shot fifteen feet upstream, this time he took the fly and for the next fifteen minutes it was this big thick rainbow and me. He spun off about twenty yards of additional line and I worked him back to me as carefully as possible. After Mr. Big Trout was tuckered out I had him alongside of me, thirteen inches of perfect rainbow trout. I reached down and released him from his bond and carefully let him swim away. This was the best catch of the year for me; a stellar day to be sure! I reeled in the line and was making my way back to the bank to celebrate with a cold beverage. Lost my footing on a slippery rock and fell, face first into the depths of the cold Current River. I lost my lucky hat, my waders filled with water and I suddenly realized my perfect fishing day was over. Cold fifty degree water poured into my waders and soaked me to the bone.

Slogging back to my car I began to thank my lucky stars that I had the opportunity to go fishing at all; even if I lost my lucky hat. I also learned a valuable lesson, for every action there is an equal and opposite reaction. I had to make payment to the fish gods, I really didn’t do anything special to catch that fish, and in fact I was feeling pretty cocky after catching that Mr. Big Trout, so I guess I had it coming. So, I now am a firm believer in every action has an equal and opposite reaction.

Life lessons come to us each and every day, I guess this was just one of those days that help to keep me grounded.