Country Club Capitalization – Are You Doing it Right?

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What Should Be In Your Golf Course’s Long-Range Plan?

Eric J. von Hofen planting a Live Oak tree
If you listen to the news, anyone in the golf business should be running for the hills and filling out an application at the local grocery store these days. This goes for the members too. Golf rounds have declined and the NGF reported again today that more courses closed in 2010 then opened. Those courses that have had a long-range plan is place have come out on top during the market meltdown over the last two years. I have found a pattern of success at operations that have been proactive and set up a committee that has tackled these tough issues.

In order for these long-range plans to get off the ground and stay on track, you need to have longevity on the committee. Usually the past presidents of the club are the best fit. These individuals know the history of the operation and have served their time. They usually are long time members and have the time to met once a quarter. During these meeting topics can be covered very quickly with little time wasted on bringing new people up to speed on what’s going on.

With so many moving parts in running a successful golf course operation, a long-range committee needs to look at the following areas to keep the club and course on track.

1.Membership– What is the trend at the club? How are you handling membership pricing and dues?
2.Staff– How is the club retaining and rewarding it’s best employees? Turn over is expensive and you would like to continue to get that member pour from the server who knows what you drink and eat as soon as you walk in the door.
3.The golf course-Many say it’s the most important thing and I have to agree. Understand the history of the course and when it was built. If it was designed by a classic architect, don’t mess it up. Get a professional that understands the design thoughts and don’t let a group of low handicap players redesign the course to fit their games.
4.Water– Understand the irrigation system and how it works. This alone could be a million dollars or more if you need to replace it. Just because the pipes are out of sight and out of mind doesn’t mean your irrigation system is doing it’s job. Is your club taking measures to conserve water? You might be surprised on what you find out.
5.The clubhouse-What upgrades are needed to maintain the building and provide new services younger members with families might want to use on a daily basis. Here I would listen to these folks, because they will be around for many years to come.
6.Capital Equipment-What does the kitchen need to cook 600 people Thanksgiving dinner or that 300 people at a weeding? How about equipment to mow the greens and fairways. Have you priced out a new rough mower lately? I will save you the trouble and tell you they cost as much as your wife’s BMW. These expenses have to be planned for.
7.Landscape-Yes, good old plants and trees. Believe it or not, but they too have a life expectancy and need to be cared for. Develop a plan with an architect that knows what the heck these trees and plants will look like 40 to 50 years from now. Work off of the plan and add plant material over time. Try not to install the entire design in two months and expect them to grow 20 feet in a year. Remember this apart of a long range plan.

I hope you use these seven items as building blocks to put together or enhance your clubs long-range plans. Good luck out there.

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Would you be ready if a fire hit your golf operation?

Eric J. von Hofen
A fire can happen in the blink of an eye and when you least expect it. Here are some tips that you might want to follow before your golf course is faced with the worst day in it’s history. I would have the following information stored two ways, one a external drive and the other on a flash drive. Leave one copy at home and the other in your clubhouse. Remember that when a fire strikes, everything is gone. You will not have access to your office, computer, phones, irrigation system or building. I remember coming to work the next day and the only thing I could get out of the building was three rakes and two carts. I lost everything including my college diploma. See my office below.
Eric J. von Hofen

Information that needs to be backed up and stored off site:
-Have an updated equipment list with serial numbers, hour meters and pictures. Include the purchase date and cost at that time.
-Employee contact numbers.
-Irrigation programs and pump totals.
-Chemical and fertilizer records with the current inventory list.
-Gas and diesel inventory list.
-Vendor contact numbers.
-Member and club officials contact and email information.
-The clubs insurance contact information.
-Local and state fire marshall contact information.

The day after the fire has to be a controlled media event. Golfers, owners, staff, and insurance companies are the only people you need to worry about. At that time you probably will not know what caused the fire so you will only be able to confirm that “yes we had a fire” and that is it. Your burned up building will be jumping with local fire officials and the state fire marshall. These guys worked together and in about one hour they had it narrowed down to a five foot area where my fire started. Ten minutes later they found the cause and pulled out the remains of a electric golf cart charger. The fire marshall said “you might want to lock this up, it’s going to be worth a million dollars”. I took his advice and hide the charger until the insurance team showed up. He was right the fire was a $1.2 million dollar loss.
Eric J. von Hofen

Over the next month you will have every fire clean up company and insurance adjustor show up wanting to help you and offer to review your insurance policy. They have a great scam telling you that they can put together claim so you don’t have to worry about. Sounds great but they will take 30% of the insurance payout. Not a good deal at all. This is when your records will be worth gold. These records will also be very important if your equipment is leased. The lease company now has nothing to pick at the end of the lease and you have nothing to maintain your course with. Now what do you do? The insurance company will have to settle with the lease company and you will have to put together a new equipment package.

Keep a clean maintenance building, back up your information and look for any fire hazards on a daily basis. Make proper equipment repairs and train your staff on fire protection. Sounds petty but it sure pays off.

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