Are You Budgeting For Your Club’s Future?

‘Tis the season for private club budgeting! But unlike the holidays, few General Managers will have a cheerful pep in their step at the thought of reviewing F&B revenue or inspecting this year’s inventory management. Last month I talked about taking the pain out of the budgeting process, but this month I want to acknowledge an essential expense that many clubs are tempted to skimp on: The Future.

Compared to that raise key staff members are demanding or that bunker that needs replacing, it can seem extravagant to spend club dollars on something as abstract as the “The Future.” But some internal expenses are essential to creating a functioning club – and maintaining a healthy bottom line.

So what costs are necessary to maintain a high-functioning private club? Is there any way to cut down these essential costs? I’m glad you asked.

No private club budget should be drafted without considering…

The Board Retreat

Make sure you’re allocating an adequate amount of money to prepare for a board retreat that takes place outside the club. It may seem bizarre to take the Board elsewhere to discuss the club’s future, but these excursions give Board Members a chance to step away from the environment they’re accustomed to – and leave their inherent biases and personal agendas behind. Breaking routine has actually been shown to boost creativity, morale, and teamwork – all musts for an effective board retreat.

Don’t have a lot of capital to funnel into an expensive getaway? No problem! You can set up a “swap” with another club in your area. It can be especially useful to make these arrangements with clubs that target a slightly different demographic or serve a different purpose. For example, a country club may benefit from seeing how a city club approaches activity groups and social events, while a city club may benefit from seeing how a country club approaches sporting events and outdoor activities. This can open your Board’s eyes to new concepts and stimulate thought-provoking conversations. The benefits of “swapping” are virtually endless and the price tag is minimal if not non-existent!

Board Education

In large part, the burden of ensuring that the Board is properly educated rests on the GMs shoulders. Most club governments have complete turnover within a few years, so in many cases the GM is the only constant. GMs also touch every aspect of club operations, a role that can give the Board a different perspective on what the club needs. Educating the Board is one of the best things you can do to “lead from behind,” which is truly the best approach that a GM can take in this situation.

But providing the Board with educational opportunities doesn’t always require sending them to expensive conferences or attending pricey seminars. Instead, utilize your network of resources. If you’re part of a professional association like CMAA or NCA, use their materials and opportunities to the Board’s advantage. This gives them access of industry news, best practices, and more.

Planning Efforts

When clubs are having issues succeeding, there’s usually one core issue at play. Sure, they might have an outdated ballroom, an unorganized staff, or issues with food quality… but when you trace these problems back to their source, it ultimately comes down to a lack of direction. Over and over again, I see clubs flounder because they don’t have a true purpose or a tangible plan for executing that purpose.

With this in mind, it’s vital to make room in your budget for strategic planning and/or master planning efforts. Having a mission or vision statement is a great start, but it’s not the same as having an actionable plan in place. It’s not about the verbiage – it’s about the execution, and execution is the only way that you can make your club the best it can be.

Sometimes the best way to cut down long-term costs is by investing in planning efforts upfront. Well-laid strategic plans provide direction for the club, prioritize club goals, and define action items so you’ll actually complete those goals. This leads to a successful and prosperous operation with high Return on Experience for members. Carefully crafted facilities plans can potentially save thousands (if not hundreds of thousands) of dollars. They reduce maintenance costs, prevent those dreaded road-to-nowhere “pet projects,” keep the club ahead of industry trends, and so much more. Ultimately, when you invest in a well-laid strategic or facilities, you’re investing in your club’s present and future wellbeing.

Have a private club budgeting essential you’d like to share? Send me an email!