The Financial Strength of Golf Clubs
As we continue the focus on golf club performance measures and the support options available, let's take a look at the most concrete of success measures, the finances.
It’s old news to anyone involved in or observing the golf industry, that a portion of our golf clubs are under financial duress. But is it really as bad as reported? And why do we spend so much time focussing on the financial outcome of our clubs? Surely there are other measures that are just as important? Member and guest satisfaction? Amount of golf activity at the club? Acquisition and retention rates of customers? The answer is fairly simple. In the complex world of golf club leadership, the financial measures seem the easiest to understand and therefore receive the most focus. From year to year a club will either make a profit or a loss. A profit is celebrated and a loss bemoaned. Unfortunately, it is rarely that simple. And while the outcomes are black and white, it is much more difficult to isolate the drivers of financial performance.
The finances are also the most scrutinised of performance measures. With many members pointing to, but not fully understanding them. It takes strong club leadership not to bow to the pressure of some members who tend to want a much greater quality offering but aren't as willing to open their wallets to support it. As noted in the previous articles I think it's important to take a moment to reflect on how well our club leaders perform in such a challenging environment.
There are several different factors that are creating greater financial pressure on our clubs. While we could spend a lot of time discussing them all, I have summarised a few of the key ones below: • Rapid and wholesale increase in the costs associated with golf operations • A reduction in the availability
of funding • A significant increase in the cost of compliance and legislative requirements for clubs • Decreased volunteerism to
support club operations • Increasing technology costs • An increase in administrative costs as the industry requires highly skilled staff to lead it While this could paint a bleak picture, there are a good number of clubs who are thriving despite the above challenges. There are also a number of support options available for clubs to help them negate as much of the financial pressure as possible. A few are discussed here.
N3 - NATIONAL GROUP BUYING SCHEME
New Zealand Golf (NZ Golf) in partnership with n3 have created the National Group Buying Scheme. n3 are a membership-only business buying group that give over 12,000 businesses access to exclusive savings from New Zealand's leading suppliers. Put simply, they save golf clubs money by negotiating the best deals for them, using the support of 12,000 businesses as leverage. NZ Golf has paid for every golf club in the country to have access to this buying scheme. Currently the scheme saves the industry around $175,000 every year.
PROJECT LITEFOOT - LITECLUB
Project Litefoot is a charitable organisation whose purpose is to inspire New Zealanders to be environmental champions. Their sport-club specific programme, “LiteCLUB” helps clubs reduce their environmental impact as well as reducing costs. This is a free service that leverages local funding. A team from LiteCLUB can replace old lightbulbs with energy efficient bulbs, insulate hot water cylinders and piping, install aerators on taps to reduce water use, create efficiencies through waste and recycling and provide a full assessment to the club for future saving. Working closely with NZ Golf LiteCLUB have supported golf clubs to save the industry more than $1,000,000 over the lifetime of the products. They have also supported the industry in its endeavour to be environmentally sustainable.
ONPAR GOLF ADVERTISING
One of the many challenges our golf club leaders face is attracting sponsorship and building sufficient long term partnerships to financially support the club. While in the halcyon days of the past it was enough to go to the business owners in the club and ask for a bit of cash in return for a sign on the tee, clubs require more robust financial support and therefore need to offer greater, more measurable return. The challenge isn't often in the club's ability to do the work but in their ability to dedicate the required time to such an enormous task. OnPar Advertising in partnership with NZ Golf have provided a solution. The OnPar team works with Golf Clubs to understand and realise their partnership potential and actively engages partners looking to increase their visibility to the great number of New Zealanders who play golf. OnPar support clubs with on course signage, advertiser friendly website design and advertising
The Regional Support Managers from NZ Golf can provide analysis and guidance to clubs around their performance and help link clubs together to work towards cost saving.
email services that provide financial support to the club and a measurable marketing return to the partners.
DOTGOLF - INTEGRATED SOLUTIONS
The cost of technology solutions has drastically increased across most industries globally. While some may begrudge the expense, it is a reality of current societal expectation. As we strive to compete with other industries, golf needs to embrace technology for its ability to enhance the golf experience. DotGolf provide integrated technology solutions that deliver a return to clubs in simplicity and efficiency, allowing them to provide great service to their customers and to get on with the job without being stuck in the plethora of time consuming administration.
While DotGolf products are relatively well known to the industry their positive financial impact can't be understated. They support the following; • Golf Operations • Membership, Handicapping
& Financials • Point of Sale Services • Websites & Mobile • Customer Relationship
Each club is unique and therefore requires a bespoke technology solution to ensure they get the best balance between cost effectiveness and performance, something which DotGolf is committed to.
NZ GOLF - REGIONAL SUPPORT MANAGERS
Last, but definitely not least, are the NZ Golf Regional Support Managers based around the country to support the performance of golf. Often it can be difficult for a club to understand their financial performance, particularly in isolation. The Regional Support Managers from NZ Golf can provide analysis and guidance to clubs around their performance and help link clubs together to work towards cost saving or income generating initiatives.
There are many considerations for golf clubs when rationalising their financial performance. It is important for us in the golf industry to try and understand the financial pressures on our clubs and consider the complexity of golf club performance instead of pointing straight to the bottom line. If you feel your club could benefit from any of the initiatives above, please direct them towards NZ Golf or the associated partners.