Private club struggling, need ideas to increase revenue

[Par-A-Medic]

I am a member of a small private equity that is hurting for money. We had a meeting of the members last night to discuss the plan to remedy the current situation and I have expressed a growing interest in club leadership. I am looking for ideas to increase revenue and not increase due or cart fees. We have upped the public /guest rate already too. Does your club do any oddball special events, member fund raising, etc that could be helpful?

[FormerClubPro]

Tough situation to be in, and I'm sure the members wont like my suggestion, however running a couple large tournaments that allow outside play in are good for revenue if the field is filled. This is easier to do with more "exclusive" clubs since the outside population likely would love a shot to play the course. I'm not sure your entire situation or exclusivity but outside tournaments are a decent way to get some greens/cart revenue.

[Par-A-Medic]

We do a couple of "open" tournaments a year. We aren't very exclusive and allow public at with a tee time. I have expressed the need to market the place, and let the public in a little more easily, along with trying to increase membership in the same fashion.

I like oddball things like open to public 4 club, and night golf, maybe a "big hole" tourny. Etc.

Last year we had a concert with a popular local band and it was a good cash maker.

[br61]

Have your course to be available to host outside tournaments to corporate or as charity scrambles on Mondays or on a slow day, charge a fee per player with carts included. Offer lunch packages at a little additional charge. It's what my private club do in order to generate revenues.

[Fourmyle of Ceres]

The amount of money spent is much more controllable than the amount of money coming in. Look first to every possible way to spend less, including the expenses that are "not on the table" or "not optional". Remember that if the club goes under, even the stuff that is viewed as necessary will go away.

In most areas, there are numerous public courses hurting for players. Generally speaking, a public course can undercut privates on price. Which makes it hard to add much revenue from outsiders. And as you mention, the membership numbers can rapidly shrink if you try extracting more money from the members. Hence the idea that cutting spending is the only meaningful improvement with enough traction to do much good.

[sheppy335]

The restaurant is open to public and then have neat dinner periodically to get injection of cash,. the host golf outings to people not members and are open to the public for golf on certain days.

[Swisstrader98]

Doing a bunch of events is a sure way to die a death of a thousand cuts and just elongate the inevitable. What you need to do is to run the club like a business and get a grip on ALL costs and all potential sources of revenue. Then, you will need to determine whether or not your members may need to be assessed and for how much. Yes, its painful, but many clubs have done exactly that to survive.

You will also need to look at creative ways of getting new members to join, different classes of membership, additional sources of revenue through F&B and other sources, etc.

I would also suggest hiring consultants who specialize in both book keeping and advising clubs on these sorts of things. The money you will spend on a report and an actionable plan may in fact save the club.

[rvgolfer]

You really dont provide enough details to give all that much advise. I will relate what our club did to not only redo all the greens and irrigation system and at the same time not have a member assessment and not raise dues. A small study was initiated and it was determined that instead of having 400 members it was decided that our course could handle at least another 150 members.

So with that in mind, our club offered free to each member one additional membership at not cost, and then sent the members out to recruit one new member with the proviso that the new members would pay the same dues as equity members and have all the same priviledges with the exception of and equity position. Feedback quickly came in and we found out that losing the equity position wasnt a problem for most and if by chance it did bother some, they could always actually pay the initiation fee and be a full member.

Doing this not only increased the monthly revenue but also we were able to finance our improvements without any additional cost to existing members. This plan will only work if you have a market to draw from and the support of the members who were our "pushing" the non-equity memberships.

[Ranger Rick]

Might sound a touch illogical but what about reducing prices under certain circumstances in order to get more bookings/usage and therefore more revenue. Things like booking 10 days in advance and getting x off of a cart fee if you choose to take one. If you are finding late afternoon or early morning tee times aren't being filled then either cut back certain hours or offer them for less.

[SHIVAN]

If it's a nicer course than it's closest competitor, undercut their price by $5, and open the tee sheet after Noon. If you already have a full tee sheet every day, then it sounds like revenue is not the issue, costs are....you'll need to be looking at both.

[atlanta golfer]

What is creating the mismatch between revenues and costs? Do you have a big expensive infrastructure to support? If true, it is possible the die is already cast and you can't recover from it.

On the more positive side, how about a junior membership program. I have seen these where there is no equity buy in until a certain age. I have seen all kinds of variations on this.

[BrianL99]

[quote name='Par-A-Medic' timestamp='1351538482' post='5863219']
I am a member of a small private equity club that is hurting for money. We had aerating of the members last night to discuss the plan to remedy the current situation and I have expressed a growing interest in club leadership. I am looking for ideas to increase revenue and not increase due or cart fees. We have upped the public /guest rate already too. Does your club do any oddball special events, member fund raising, etc that could be helpful?
[/quote]

First off, you're not a "Private Club" if you accept "public players" ... which means you're competing in (2) separate & distinct markets, without a commitment to either. That's a tough place to be.

Secondly, you can't under most circumstances, "cut your way to a profit" ... unless your club is already grossly mismanaged. Any temporary progress will ultimately result in even larger losses.

Thirdly ... get some advice from people who own, manage or develop golf course, not from people on the Internet who play at golf. Playing golf is one thing, managing a golf business is a horse of a different color.

[esketores]

A local club struggles due to the local economy. The membership got old. And due to the local economy new members have been hard to get.
The owner (private ownership) for sure has gotten creative. Much to the chagrin of some of the older people of wealth.
The club is closed on Monday. So he "allowed" a league to play on Monday. Win/win. League gets a nice place to play and $$$ not normally seen are brought in. Now I don't know for sure, but I suspect if the owner was not familiar with many of the "league golfers" the league thing might never have happened. (No true hacks in the league.)
Outings are booked on Mondays. Any outing is done prior to league play so no conflict.
There are now more "pay to play" golfers than members. After paying a modest up front fee and agreeing to spend "X" dollars a month on food and beverage a person gets full membership rights (except voting). Weekend golf, with cart, comes out to an amount that allows some people (me!) who would have never thought they'd play Country Club golf to play Country Club golf.
According to a full time member (lives on the course/own cart. etc.) the club makes more money off the pay to play golfers than the full members.
The best part... my peer group took most of the money paid out during summer tournament play. I know it is bad to gloat but we all came from a goat ranch that was truly looked upon with disdain.

[Johnny Biarritz]

I am trying to get a handle on what you have here.

1. Do you allow unaccompanied, non-sponsored outside play?

If you do all ready, that takes away one of my ideas which would be to open up certain tee times at non-peak times to the public. That can be done any number of ways, but GolfNow would be a good way to do it, I think. Tell people they can't just call up and come out, but must book through a specific agent in order to play.

Second, figure out how to get more members. Cut your initiation fees, perhaps. Offer more categories that guys under a certain age and/or over a certain age can get reduced monthly fees. Also, if you don't have it, go to a small monthly food minimum, $25 or something.

If there are other clubs in the area, either private or public, offer a reciprocal program.

Beyond that, more details are needed...

[Par-A-Medic]

Lot of good advice here. I am not on the board of directors however I bring a lot of play and have brought a bunch of new members in over the last year so I get asked/ end up bein the voice of several. Our financial state has been grim mostly due to poor management, we functioned for several years with a bookkeeper and a pro, no manager. That was fixed 18 months ago. In that time we have brought on 60ish full memberships and several junior and out of town memberships. However we hadn't had a dues increase or assessment since 2006 until last nights meeting. Those in attendance were ok with the increase it seems. As someone earlier said and I asked last night where is our business plan? What are the goals? Who do we need to call in for advice? Currently we at plugging holes in a very flawed 90 year old club. I agree with someone who mentioned big cuts. I think and want to increase revenue but I understands that the way to truly optimize financial operations is to both grow and cut. For us now with the added members and new rates if we can stay afloat and get some "bonus cash" from events, etc. I agree whole heartedly with getting professional advice and planning help, even a marketing person to advise. This post is just me looking or ideas to toss at the club because currently the club is doing well to make the mortage, utilities, and payroll. Again big thanks for the help

[Par-A-Medic]

As to private status we are a private club. We have one fairly large corporate membership that brings in some "unfamiliar play" and we participate in the state golf association discount card that allows a limited number of plays on many private courses (public as well). That card got me hooked at the club. The public can get a time in those instances, or with a member. Sorry for the misunderstanding.

I have mentioned opening play publicly after noon or one, and on slower days. We have tried the "package deals" in the past and didn't seem to get a whole lot of play. I like the corporate membership idea. They dot play enough to wear out the welcome and usually bring good money. Often they just join outright.

As to the players card we added to the number of rounds and the price had been adjusted to be equal to the competition.

We are the middle guys in the area. We have a large colleges big name course here however they are expensive and not "member friendly" and then we have a couple of true semi private that are around our price but have a lot of public play, enough that you can't just drop 7 balls at the 100 marker and play in without some hate from a ranger. Then there is the trump card that the tighter folks use as ammo, the local club that got bailed by the town and membership is less than a third of our but its a goat track.

[Pinseeker30]

I was elected as the chairman of the board at my home club about 6 yrs ago. I was only 24 yrs old at the time, but nobody, and I mean nobody wanted this position, due to the fact that the club was in trouble, the membership wanted answers and nobody wanted to be realistic. So imagine being a 24 yr old, and your handed a financial mess, and people who are twice your age, that watched you grow up, and want you to lead this club into prosperity. So, I willingly took this position, that I was somehow by unanimous vote was elected to. I did have business experience, from working at my dads trucking company with him from the time I was 12, which I ended up inheriting and currently operate. But, at the time, I knew nothing about running a golf course, what the costs were for maintenance, licenses, chemicals ect. When I took over as chairman, we were $86,000 in debt, had about $1,100 a month positive cash flow, and only $11000 in cash, all the sewage lines needed redone, clubhouse needed a new roof, areas around the greens were a mess, and a very good super, who after 23 yrs was ready to quit, due to lack of funding for the program. I thought to myself, what did I get into?, this place is on the verge of bankruptcy and I am gonna be looked at as a failure. So, my project started the first thing I looked at were expenses, and cut everything from the good toilet paper, to not having fancy score cards, which by not having our logo and picture on the card saved us $900 alone, I dont know about you guys, but I dont play a certain course cause they have nice score cards. Then I planned a Raffle which included guns, golf trips, cases of beer, clubs that were left over from the previous couple seasons, sports tickets ect. we do this every year now, and it generates roughly $4500 profit, but it is a bit risky, due to the cost of having nice enough prizes to interest enough people. Our members do a daily closest to the pin competition on 2 holes that cost them $5 and the pot is split 50-50, we make about $150 a day off of this. If you dont have a beverage cart, I suggest getting one, and I will give you a little pointer, put the best looking college girl thats home for the summer with the best attitude on this cart, we did this instead of our normal college guy and the profits from that cart increased 400% in one year, yes 400%, we split tips 75% and 25% and we would make $700 a month just off her tips. We started doing golf clinics twice a month, instead of individual lessons, that increased revenue, due to being able to charge every person, usually 10-15, the $40 an hour instead of one person. We started a membership referral program, in which the member who recruited the most, got a free membership, our membership increased about 10% the first couple years until the recession hit. We did beat the pro days, $20 per member, top three got 50% in pro shop credit. One of the best things we did, is we went to the nearest club, and have a ryder cup style tournament against that club, our members vs their members, our club one day, their club the next, the clubs split 50-50, there is no prizes, just a huge trophy that goes to the winning club from year to year, all members know it is just bragging rights, and that it puts a nice dent in maintenance costs per year, but there is some huge pots in the side games they can win. This year we incorporated a tiered membership scale, they pay 80%, 90% and 100% and sign a contract. We have added 22 members this year due to this. We dont have a public swimming pool within 30 minutes of where I live, so next year we are putting in a swimming pool and charging the public to swim, there is a club 60 mins from us that did this, and the pro claims they make about $18,000 profit off of it a year, so we will see. Its a bit risky, but may very well be what we need to turn our club around. These are just some ideas, I know there not really out of the box, but they have worked for us......Oh and one more thing, if you serve alcohol at your course, if you do the night golf, I wouldnt serve alcohol, driving golf carts drunk in the dark, on a golf course is a recipe for disaster, our local country club lost a green and a bunker due to this, and the guy broke his arm and sued them.

[Llortamaisey]

I'm assuming that the course is open 6 days a week. Reduce that to 5 days a week. Depending on the operating costs, the club could save at least $150,000 per year.

[Par-A-Medic]

Pin great reply. I don't think I will soon be president however board member is very possible, I want to do it. We are about the same age and I don't have a business background I'm in healthcare obviously. But I know how to work off a budget and count pennies. That's our situation much like yours was. I was as much expecting "we'll folks we made a heck of a run but next week the bank is coming!" So anything other than that is good, and we had a bunch of positive feedback. We have done and will likely to barter service for golf to get things done, the windstorm that hit the east coast got us bad in the spring and most of the work cleanin up was volunteered and that work that had to be done was bartered to a guy who had been a member growing up but never since. We had our pool repainted in a similar manor. We have a core group that will do what they can with there hands and heads and even as much as possible with their wallets. Volunteering to run the proshop and doing tables in the Resturant. We are very lucky in that respect. You story is the kind we are looking for.

[Par-A-Medic]

[quote name='Llortamaisey' timestamp='1351560595' post='5864997']
I'm assuming that the course is open 6 days a week. Reduce that to 5 days a week. Depending on the operating costs, the club could save at least $150,000 per year.
[/quote]
Open 7 days except poor weather but this is a good idea! +1

[Thrillhouse]

The answer is somewhere in cutting costs and raising prices. You have to find the balance between the two that will provide the most profitable outcome as cutting costs will likely come from maintenance and upkeep and will drive some members away, and raising prices will likely drive people away as well.

I suspect the answer will be a little of both. I'm sure you have members with backgrounds in business or maybe even someone with a background in economics who can figure this out, reach out to them and see if they are willing to help. That way you would have some solid data to work off of.

Of course the downside is that you may find that there is no way to raise enough revenue to cover costs and if that is the case then you are just avoiding the inevitable as this club will be shutting down eventually.

Best of luck!

[Par-A-Medic]

Thrill I feel like your approach is the best and I am fighting all I can to prevent the later. I like most there aren't so invested that throwing the towel in would kill us, but it would suck to have to find a new club. That's why I am trying so hard to get any ideas I can. Thanks for the good wishes. We need them.

[BrianL99]

[quote name='Llortamaisey' timestamp='1351560595' post='5864997']
I'm assuming that the course is open 6 days a week. Reduce that to 5 days a week. Depending on the operating costs, the club could save at least $150,000 per year.
[/quote]

How exactly does closing one day a week, "save" $150,000?

Do you get to cut the Pro's salary by 15% ?
Do you get to cut the Superintendent's pay by 15% ?
Do employee fringe benefit costs go down?
Do you get the City to cut your taxes?
Do your insurance costs go down?
Do you now get to buy less fertilizer or pest control chemicals?
Do cart "expenses" go down?

[Pinseeker30]

I dont think he would do well closing one day a week, especially if he is trying to market the place. That one day could be the day with the best weather, and a bunch of golfers show up to play and the place is closed, now they arent real thrilled and may not be back. I might go as far as maybe closing the restaurant one day a week, but not the course itself. I am sure the members wouldnt be thrilled with paying for a membership and the course isnt open on their schedule, or their day off is the day its closed, in my opinion, that idea could go well, or get real ugly.

[SHIVAN]

One of the nicer semi-private courses just blasted out a $39 "wet course" special for Wednesday-Friday. They know that everyone wants to play, and that people will play [u][b]this[/b][/u] course if the price is deeply cut.

Those tee times would likely sit, unused, if they didn't do some marketing to fill them.

[Truman]

It's very difficult to build a strategy without a clear objective. You should first decide if you want to be private or public, Then you can begin to develop a strategy. When you get into it, you likely will find that private is not feasible. In today's economy you need a strong financial commitment from membership to be a private club.

[GoStars]

Be careful about a lot of play on Mondays, it's a good way to wear out your course.

[Par-A-Medic]

I think closing on slow or inclement weather days could indeed save some money. We have started this in the last few months. If a member wants to play they can walk if they don't use a privately owned cart.

[Par-A-Medic]

I just realized that I didn't explain that in the meeting we were assessed 100$ a member and the rates went up 5% with a plan to increase by 2 more in a year, and to up cart rate plans by a couple hundred, and a few more increases and changes. So those things have been addressed. My fault for not including that.

[Thrillhouse]

[quote name='Par-A-Medic' timestamp='1351653248' post='5870635']
I just realized that I didn't explain that in the meeting we were assessed 100$ a member and the rates went up 5% with a plan to increase by 2 more in a year, and to up cart rate plans by a couple hundred, and a few more increases and changes. So those things have been addressed. My fault for not including that.
[/quote]

Will those increases cover your current costs or no?