What is a Reasonable Financial Expectation For Running a Golf Club?

[Sean_A]

I am curious about what folks think is about right for club expenditure given a revenue of £635,000/$993,000 (green fees, yearly dues & bar - profit only) for a private club with ~600 members?  Total expenditure is £633,000/$990,000.  What would one expect to spend to run the clubhouse (fairly old and being slowly updated)?  Administration (including staff wages) and finance?  The course (including wages and slowly upgrading parts of the course)? 

Ciao

[Adrian_Stiff]

I am curious about what folks think is about right for club expenditure given a revenue of £635,000/$993,000 (green fees, yearly dues & bar - profit only) for a private club with ~600 members?  Total expenditure is £633,000/$990,000.  What would one expect to spend to run the clubhouse (fairly old and being slowly updated)?  Administration (including staff wages) and finance?  The course (including wages and slowly upgrading parts of the course)? 

Ciao

Sean - If your taking £635,000 at a members club then the right expenditure is probably £600,000. A lot depends on your accounting policy for writing off stuff and replacement. Typically Irrigation systems are £250,000 in the UK and they dont last forever, you probably need to put away £15K per year for that alone, if you can keep a float of around £100,000 it should give you the flex to do most things and have a bank balance always of +/- £100,000.
Most member clubs just scrape through in reality and do not have a provision fund.
Most clubs had too many staff, 1 too many is often worth £50 per year on the subscription.
Most clubs have had a tough time.

[Mark Chaplin]

60% expenditure on the course
25% on the clubhouse
15% on administration

Not an exact science but a pretty average model.

[Sean_A]

Adrian

The club does maintain reserves and has (and will do) spent some of that plus taken on debt (which I am not convinced was wise).  However, paying down the debt quickly is what made me think about the ratio expense.  I think 25% for admin and finance is too high and would prefer more money set aside for the debt,  but this invariablly means eliminating admin staff or drastically reducing their wages.  The club would still have made a tidy profit this previous year if it hadn't embarked on improvement plans for the course and house - so it is still doing quite well in this climate (though visitor/guest fees were down slightly).  That doesn't include the huge boost of income from the Ryder Cup because the accounts run (strangely) from Sept to Aug. 

Chappers

I like your breakdown much better than course 50%, admin 25% and house 25%. 

Out of curiosity, does anyone know the average visitor/guests fees per annum in the UK or England? 

Ciao

[Adrian_Stiff]

Sean - Average green fee revenues in the UK is a difficult subject really. It depends if the club has 500 members and space to sell or 800 members and not so much space or 1000 members and no space. An average full member plays 40 times, 40,000 rounds per annum is a pretty busy golf course in the UK. I think the range would be sort of zero to £1,000,000 but I would imagine a lot of clubs do less than £100,000.

I think with Admin costs, it depends what you call admin. Where do you put the rates, what if a club pays rent, is the secretary,manager admin or his he/she golf. Admin costs are much more than 15% to us, probably closer to 30%, but that could be just the way someone accounts differently.

Its not lots of money to groom and maintain the golf course if you take the wages out in the UK, we dont feed or water or use chemicals anything like some areas of the world. I suspect most monies are lost in the clubhouse and it will often be the food that loses as opposed to the bar that makes, every club and situation is pretty different though.

[Niall C]

That doesn't include the huge boost of income from the Ryder Cup because the accounts run (strangely) from Sept to Aug. 

Sean

Can you explain the boost from the Ryder Cup ? Is your course near by and did it get increased play as a result and if so how much ? I'd be curious to find out.

Niall

[Sean_A]

Niall

I think the club did an extra £23,000 worth of green fees more than would be expected due to the Ryder Cup being held less than an hour away.  Reading some comments of visitors the Ryder Cup may prove to be far more valuable than £23,000 in the long run.  Many were deeply disappointed the Welsh clubs, Porthcawl in particular, jacked their rates up considerably just before and after the Ryder Cup. 

Adrian

I understand all cllubs are different, but I would have thought there was some organization keeping tabs on club activity and that average visitor/guest fee (plus a breakdown per region) intake per year would be a common statistic.  How else does a club measure how it is doing on this front?

Ciao

[Adrian_Stiff]

Every club runs differently and its about how much space you have to sell. There is finite number of rounds you can put over a golf course. If Club A chooses to look after its members and restrict society and visitors to a narrow band its green fees will be lower. Club B might have a smaller membership and available time. You could do a lot of green fees at almost any golf course on a saturday morning, but these are prime member times. I had a conversation about two years ago with a club official at a local club, I explained how the recession was biting and that we were down about 80 societies on the previous year, he was horrified and said his club had done really well and were two better than the previous year, the difference was he had upped from 46 to 48 and I had downed from 431 to 353.
If you start to average clubs, I dont know how you can look at a 9 holer in Aberdeen and an 18 holer within the M25 in the same data collection, as you say you could regionalise. You could simply measure number of rounds, in many respects thats the best indicator, if you got good numbers but are not making money you have a real problem..... on the same hand if you do lesser rounds but charge more it might add the same... I think its just a case of trying to measure a slippery eel.
I dont know if there is a database that collects the info, I suspect no, because they dont collect ours.