Running a golf club in today’s market is an extremely costly business. Golf Consultants Association Member Kim Harris shares his advice, and looks at the benefits of working with a business savings consultancy.
Aside from the obvious operational costs, there are the ongoing maintenance costs to be considered. Add to this falling revenue – golf club membership across the country has dropped 20% between 2004 and 2013, according to England Golf – and it’s no wonder golf clubs need to be ever mindful of spiralling costs. Generating income through new members, society and corporate days is essential, but brings with it additional expense, and golf clubs too frequently focus on the ‘front door’ while leaving the ‘back door’ ajar.
The almost ‘hidden’ key running costs of a golf club – gas, electricity, telecommunications, insurance and water, for example – are often overlooked. How often are these fundamental, yet crucial, business costs reviewed? Is there a strategy in place? Does the club have the in-house expertise to ensure that contracts entered into are both financially and contractually fit for purpose? It’s a fact that in today’s busy and challenging environment, golf clubs often struggle to find the time to focus on how much they spend on these leading, essential costs.
Water charges, a high cost for most golf clubs, are seen as a fixed and given cost. Charges are complicated and vary from one water authority to another; however, water authorities have consistently been found to be charging their commercial customers incorrectly, with the rates being wrong and not necessarily appropriate to the club’s needs. Charges can be challenged and refunds – in some cases up to a period of six years – can be obtained. Moving forward, all secured cost reductions then remain in place in perpetuity.
So, what avenue can a golf club take to review areas of expenditure without incurring costs?
Well, one approach would be to use a consultancy that specialises in reducing key running costs. If the right consultancy is used, the support and benefits to the club can be enormous. Some make no charge for their services and clubs retain 100% of the realised savings as the consultancies are paid by their supplier network and not the clubs.
There can be a prize to be had here if you find the right independent consultancy. Make sure you look for ones that offer:
- Access to a wide portfolio of services
- Access to a panel of suppliers across all services
- Ability to handle all paperwork and contracts
- Dedicated support managers
- Make no charge for their services
- Ensure that clubs retain 100% of savings realised
- No hidden costs – on-going support management, should, for example, be part of the service and available at no extra cost
- Online access to contract/supply details
Clubs that have used consultancies have had solid support and seen financial savings.
Not only will the club, in most cases, benefit from realising financial savings but think of the time saved. That time can be redirected to other more constructive areas.
Consultancies will, generally, review the essential expenditure of clubs in areas such as gas, electricity, telecoms, water and insurance, along with other service areas. Using an independent consultancy gives clubs the comfort of knowing that, not only are contracts covered, supported and, at the appropriate time, terminations placed, but also that they will obtain a whole of market solution by sourcing the best and, importantly, most appropriate rates available along with terms that fit the their needs.
The procedure can be completely unobtrusive, as all that is generally required by the consultancy are copies of the bills or relative contract information for the services to be reviewed along with a signed letter of authority (required under Data Protection Act). The review is carried out at the appropriate time with a full quote analysis or report providing detailed current and renewal rates together with the newly sourced rates.
Once approved, the consultancy would take care of all the necessary paperwork, put the contracts in place and ensure the new contract transfers smoothly on the due date. Ongoing support should be provided, with a dedicated support manager on hand to answer any questions/issues should they arise. The advice and on-going support should be supplied free of charge.
Business Savings Experts provide clubs with a free business ‘health check, to show how clubs could benefit from business costs reductions.
Kim Harris is a director at Business Savings Experts and a member of the Golf Consultants Association.
The non-profit Golf Consultants Association is an organisation with a wealth of expertise in delivering honest, practical advice and solutions to golf developers and operators around the world. GCA members can offer specialist skills in any number of aspects of golf operations, including buying, selling and financing golf developments; golf marketing and media relations; designing and building golf courses and driving ranges; environmental golf development; golf market research; and much more,
By Mike Hyde