What is the proper food chain in golf?

[Mike_Young]

The biggest problem golf has had for the last 40 years is destroying the food chain order.  It seems there is always a food chain and if it becomes out of whack then things go away.  For example bluebirds in bluebirds house eat mosquitos and if there are no mosquitos then bluebirds go away.  Same for honey/honey bees/native flowers etc.  And we could go on.
Golf has a natural order and the top of that order should be the actual golf course itself. That seems to have gone by the wayside and in doing so has disrupted the entire playing field.  When  the top of the food chain cannot make a profit due to the other segments abusing it and draining it you have a problem. 
 If one were to assume the business consisted of the following:  golf course, employees, vendors, associations, management companies , what would you say is the proper food chain for golf to make it.  I say:1-golf course-  nothing happens without them-
2-employees- good employees are a necessity3-vendors- good vendors are there for the golf course and employee
4-management companies-  these guys thrive when times are bad and vendors and associations are convinced they control the deal when in reality they thrive on convincing courses they can lose less money than they can.  If golf is good then management companies are not needed as much.  There are exceptions.
5-Associations-  these things just happen and grow...99% of the golf courses in this country would not realize any of them were gone tomorrow...
But in reality I think the order today may look more like this1-Associations2-Vendors3- management companies3- employees4- golf courses
Recognizing that the player is the final end user how would you list them?

[Tim Gavrich]

What are we golf media types, Mike? Chopped liver? 

[Lynn_Shackelford]

Mike you give management companies a lot of blame/credit for impacting the business.  They are involved in less than 10% of the country's golf facilities.
In the market place the golfer ends up with what he desires or deserves.  Thus the golfer is at the top of the chain.

[Mike_Young]

Mike you give management companies a lot of blame/credit for impacting the business.  They are involved in less than 10% of the country's golf facilities.
In the market place the golfer ends up with what he desires or deserves.  Thus the golfer is at the top of the chain.

Lynn,I probably am a little rough on management companies realizing that they do only affect less than 10% and probably even less than that but they seem to create more press than the other 90% of the business.  If the dude who has Golf Business Magazine didn't see a large income stream from management companies then he would not have a large portion of his "Top People in Golf" as management company execs.  I so many cases management companies spend other peoples money.  Average course spends their own.As for the golfer, I intentionally left him out since golf is an expense for him.  The other line items were elements that expected to make a profit.

[Mike_Young]

What are we golf media types, Mike? Chopped liver? 

Tim,I wouldn't call them chopped liver.  I actually think most are part of what many consider the oldest profession in the world.  Let me put it this way, the barrier to entry is so low and the quality of most of the " golf media" or any media for that matter has gotten so low that it often over shadows the writers who can do it right.   

[Kalen Braley]

MIke,

This is probably an oversimplification, but I've always figured this to be an accounting issue.

1)  What are your total costs to run the course.  Note on the loan, salaries, equipment, materials, utilities, maintenance costs, etc

vs

2)  How much revenue can you demand from the market in green fees and services otherwise.

This is where older courses have a huge advantage IMO, if they own the course/land outright.

[Steve Kline]

I think you left out the Clubhouse, Food and Beverage, and the Swimming Pool. Then there's the tennis courts. All of it started from the golf for the vast of majority of places it always takes away from the golf.

[Mike_Young]

MIke,

This is probably an oversimplification, but I've always figured this to be an accounting issue.

1)  What are your total costs to run the course.  Note on the loan, salaries, equipment, materials, utilities, maintenance costs, etc

vs

2)  How much revenue can you demand from the market in green fees and services otherwise.

This is where older courses have a huge advantage IMO, if they own the course/land outright.

Kalen,I don't think what you say is over simplification.  The market tells you what you can demand for green fees, dues etc and yet the industry rarely tries to offer solutions that allow the golf course to make that reasonable profit.  Just because you can make a 40,000 dollar greensmower or a 1.5 million irrigation system doesn't mean it's the answer for most places.  Not many industries where the vendors can play the way they do in golf and it is because the decision maker rarely know what he can get by with employees are spending other peoples money after being wooed by vendors. Let's go back to the Lexus and the Camry.  The golf industry doesn't like to sell Camrys to courses...

[Kalen Braley]

Mike,


I couldn't really make out what you said in the last post, but I see the solution as:


Implement what they do in the UK model:
1)  Smaller staff
2)  Less course maintenance
3)  Accepting less than pristine conditions
4)  Smaller facilities


Yes it would be difficult to reset expectations, but whats the alternative?  Continue on with what isn't working for most clubs until you go out of business?

[Tim Martin]

MIke,

This is probably an oversimplification, but I've always figured this to be an accounting issue.

1)  What are your total costs to run the course.  Note on the loan, salaries, equipment, materials, utilities, maintenance costs, etc

vs

2)  How much revenue can you demand from the market in green fees and services otherwise.

This is where older courses have a huge advantage IMO, if they own the course/land outright.

Kalen,I don't think what you say is over simplification.  The market tells you what you can demand for green fees, dues etc and yet the industry rarely tries to offer solutions that allow the golf course to make that reasonable profit.  Just because you can make a 40,000 dollar greensmower or a 1.5 million irrigation system doesn't mean it's the answer for most places.  Not many industries where the vendors can play the way they do in golf and it is because the decision maker rarely know what he can get by with employees are spending other peoples money after being wooed by vendors. Let's go back to the Lexus and the Camry.  The golf industry doesn't like to sell Camrys to courses...

Mike-I wonder how many superintendents could save their respective clubs a pile of money if they were the sole or main decision maker on those types of capital expenditures? There are an awful lot of talented guys out there with big and small budgets that could handle these issues with a positive result. I’ve seen some innovative stuff on shoestring budgets where there didn’t need to be consulting architects, master plans, USGA spec greens etc. What I take away from what I think is a pretty candid and insightful post by you is that there are more options available than many would have you believe. Thanks for an interesting perspective on an equally interesting topic.

[Randy Thompson]

Management companies will grow if they can form a staff of passionate professionals! Boards have learned over the years that there better off contacting out the food and beverage operations. Board of directors usually don´t include anyone with professional experience in running a food and beverage operation and most have learned its better to put it in the hands of professionals and accept a monthly fee, no risks. Granted a good experienced GM will work sometimes. I feel its similar in a maintenance operation. A good management company will run the operation like it should be, its a business for god sake, there is no place for politics or ego which enters into Board of Director management. I could write a book on money badly spent but South America only has a few Superintendent and General Managers with the experience and education of US superintendents and Managers. So like everything else in this business, its not so black and white!

[Mike_Young]

MIke,

This is probably an oversimplification, but I've always figured this to be an accounting issue.

1)  What are your total costs to run the course.  Note on the loan, salaries, equipment, materials, utilities, maintenance costs, etc

vs

2)  How much revenue can you demand from the market in green fees and services otherwise.

This is where older courses have a huge advantage IMO, if they own the course/land outright.

Kalen,I don't think what you say is over simplification.  The market tells you what you can demand for green fees, dues etc and yet the industry rarely tries to offer solutions that allow the golf course to make that reasonable profit.  Just because you can make a 40,000 dollar greensmower or a 1.5 million irrigation system doesn't mean it's the answer for most places.  Not many industries where the vendors can play the way they do in golf and it is because the decision maker rarely know what he can get by with employees are spending other peoples money after being wooed by vendors. Let's go back to the Lexus and the Camry.  The golf industry doesn't like to sell Camrys to courses...

Mike-I wonder how many superintendents could save their respective clubs a pile of money if they were the sole or main decision maker on those types of capital expenditures? There are an awful lot of talented guys out there with big and small budgets that could handle these issues with a positive result. I’ve seen some innovative stuff on shoestring budgets where there didn’t need to be consulting architects, master plans, USGA spec greens etc. What I take away from what I think is a pretty candid and insightful post by you is that there are more options available than many would have you believe. Thanks for an interesting perspective on an equally interesting topic.

Tim,Figure an incentive package for pro and supt and money will be saved...

[JESII]

Tim,Figure an incentive package for pro and supt and money will be saved...

And the hit rate for Pro’s and Supt’s capable of saving their club money while maintaining/improving the deliverable is what? 20%? 50%?


How do we find them?

[JESII]

Mike - how could you dismiss the golfer as simply the end user? They are everything, including carrying the weight in negotiations with factor #2...the owner!


All the rest is late night bitching...

[Mike_Young]

Mike - how could you dismiss the golfer as simply the end user? They are everything, including carrying the weight in negotiations with factor #2...the owner!


All the rest is late night bitching...

Jim,IMHO the golfer is not in the golf business and is the user of the products provided by the food chain. 

And what did you mean by "hit rate" in your other post?  I wasn't sure...

[JESII]

By "Hit Rate" I simply mean success rate with that strategy.

I'm sure there are a great number of Professionals and Superintendents that could save their company money, but do you think more than 20%? 50% are better positioned to do that than the owners themselves?

[JESII]

Mike, you say the golfer isn't "IN" the golf business but that the golf course should be at the top of the golf business food chain. I'm confused. The golf course is there for the sole purpose of the pleasure of the golfer...with the amount of pleasure dictating the amount of revenue the owner derives.


How well the owner runs their business dictates their profit.


I think...

[Mike_Young]

By "Hit Rate" I simply mean success rate with that strategy.

I'm sure there are a great number of Professionals and Superintendents that could save their company money, but do you think more than 20%? 50% are better positioned to do that than the owners themselves?

Jim,I don't know.  I do know I have friends who were supts and pros at large resorts and purchased their own public facilities and now see a totally different side.  Did they always know that or was it an awakening?  Not sure...I do know one said he would never have another PGA pro.  He wanted a guy who could run the lace and if he happened to be PGA then great.
Let's ramble on that subject for a minute.  Take the PGA retirement plan and let's use Titleist.  If a pro buys $200,000 from Titleist in a year and sells it for a total of say $205,000 then he still makes the same for his retirement plan as if he sold it for $300,000.  It's around an 8% contribution.  That says a lot about this industry.  Heel, I saw t just this year where a club buying 15,000 in merchandise forma ball and club company had two guys on staff because he was on state PGA board and yet a club buying twice that much was told they couldn't have a staff position.  And chemical companies???. wow that can be a totally different game in itself.   Find a supt not good a math and and instead of buying a $500 quart of a herbicide he could mix with a 1000 gallons of water he gets sold a 20 gall container for $2000 that you mix with 100 gallons.  you think the average board or average muni ever even knows to ask that question?   Find out how much the golf car companies and the turf equipment companies are paying to take archies and large management companies to things like the Ryder Cup.  Just watch the local supt and pro associations and how they will ask clubs to support the vendors which support them.  Owners don't have time to rn around to al of these types of events etc in most cases plus they argue with vendors about pricing.  THE TWO LARGEST ASSOCIATIONS IN GOLF BUSINESS PGA AND GCSAA ARE BOTH EMPLOYEE ASSOCIATIONS AND THEY TRY TO DRIVE THE ENTIRE INDUSTRY.   
So, yes, I think owners are much more savvy but I do think if pros and supts were taught profit instead of bigger budget then we would see some difference.  Pay a supt and pro as a team based on increased rounds or revenues and watch how aerification schedules and pro shop hours and overtime change.  I could go on and on....

[Mike_Young]

Mike, you say the golfer isn't "IN" the golf business but that the golf course should be at the top of the golf business food chain. I'm confused. The golf course is there for the sole purpose of the pleasure of the golfer...with the amount of pleasure dictating the amount of revenue the owner derives.


How well the owner runs their business dictates their profit.


I think...

That's true.  BUT.....outside factors such as GolfNow have destroyed the pricing structure and the loyalty factor for most of the courses in the US.  To make it golf has to be a dues driven business and not a green fee business.  It's almost impossible to determine the proper profitable green fee with all of the variables that go into how many green fees one will collect. 
An owner needs to have the option of good, better , best when it comes to purchasing from vendors or preparing course conditions etc.  The only way to really get that now is by purchasing used equipment and less employees thus less fairway mowings or bunker rakings or greens rolling. 

[Sean_A]

Mike, you say the golfer isn't "IN" the golf business but that the golf course should be at the top of the golf business food chain. I'm confused. The golf course is there for the sole purpose of the pleasure of the golfer...with the amount of pleasure dictating the amount of revenue the owner derives.

How well the owner runs their business dictates their profit.

I think...

That's true.  BUT.....outside factors such as GolfNow have destroyed the pricing structure and the loyalty factor for most of the courses in the US.  To make it golf has to be a dues driven business and not a green fee business.  It's almost impossible to determine the proper profitable green fee with all of the variables that go into how many green fees one will collect. 
An owner needs to have the option of good, better , best when it comes to purchasing from vendors or preparing course conditions etc.  The only way to really get that now is by purchasing used equipment and less employees thus less fairway mowings or bunker rakings or greens rolling.

Hang on...the overwhelming majority of courses are public. Are you saying public courses can't make it without yearly tickets? 

BTW...For sure, the golfer is at the top of food chain..of that there is no doubt.  What you are saying is akin to the ocean being at the top of the food chain rather than the shark 

Mike...I think you need to heal yourself by letting go of the anger.

Ciao

[Mike_Young]

Mike, you say the golfer isn't "IN" the golf business but that the golf course should be at the top of the golf business food chain. I'm confused. The golf course is there for the sole purpose of the pleasure of the golfer...with the amount of pleasure dictating the amount of revenue the owner derives.

How well the owner runs their business dictates their profit.

I think...

That's true.  BUT.....outside factors such as GolfNow have destroyed the pricing structure and the loyalty factor for most of the courses in the US.  To make it golf has to be a dues driven business and not a green fee business.  It's almost impossible to determine the proper profitable green fee with all of the variables that go into how many green fees one will collect. 
An owner needs to have the option of good, better , best when it comes to purchasing from vendors or preparing course conditions etc.  The only way to really get that now is by purchasing used equipment and less employees thus less fairway mowings or bunker rakings or greens rolling.

Hang on...the overwhelming majority of courses are public. Are you saying public courses can't make it without yearly tickets?  I'M NOT TALKING ABOUT MUNIS...AND YES ANNUAL FEES, DUES ETC ARE THE KEY...

BTW...For sure, the golfer is at the top of food chain..of that there is no doubt.  What you are saying is akin to the ocean being at the top of the food chain rather than the shark      NO IT'S NOT

Mike...I think you need to heal yourself by letting go of the anger.   LET'S UNDERSTAND...I DON'T HAVE ANY ANGER TOWARDS ANY OF MY SLAPDICK GCA THREADS...I'M THROWING THINGS OUT THERE TO STIR ....I KNOW HOW TO MAKE MONEY WITH A PUBLIC COURSE...I JUST FIND IT ENTERTAINING THAT THE BUSINESS CAN CONTINUE WITH MUCH OF THIS BS AND SO MANY TAKE THEMSELVES SERIOUSLY....BE COOL...

Ciao

[archie_struthers]

 


What an interesting query !  Have to believe the consumer at the top of the chain as they purchase and ultimately pay for the product.


Perhaps question needs to be bifurcated. Mike definitely has a grip on the hierarchy in operations given his unique perspective and many hats 🎩


Efficiencies in operation are really misunderstood by many . Lots of ways to spend , fewer ways to save . This is a given because competition has driven down fees/prices in many locales while demanding more quality of product at the same time .


For member clubs , it’s the lucky few who have board members that have the requisite knowledge of operations to keep from being bamboozled (lol) . I keep going back to Don Mahaffey’s talks here about irrigation. ( a must see for all)   




Hang in there Mike , I feel your pain !😎

[Mike_Young]

 Archie, I see what you’re saying and yes I’m talking about operations when it comes to the food chain. I definitely think the consumer is at the top but I was talking about all parties trying to make a profit out of the golf.


 I really don’t feel any pain over any of this. I just wonder how long we will go before someone cries wolf. There are only so many pieces of the pie before it becomes cut so small That no one can survive

[Sean_A]

Mike, you say the golfer isn't "IN" the golf business but that the golf course should be at the top of the golf business food chain. I'm confused. The golf course is there for the sole purpose of the pleasure of the golfer...with the amount of pleasure dictating the amount of revenue the owner derives.

How well the owner runs their business dictates their profit.

I think...

That's true.  BUT.....outside factors such as GolfNow have destroyed the pricing structure and the loyalty factor for most of the courses in the US.  To make it golf has to be a dues driven business and not a green fee business.  It's almost impossible to determine the proper profitable green fee with all of the variables that go into how many green fees one will collect. 
An owner needs to have the option of good, better , best when it comes to purchasing from vendors or preparing course conditions etc.  The only way to really get that now is by purchasing used equipment and less employees thus less fairway mowings or bunker rakings or greens rolling.

Hang on...the overwhelming majority of courses are public. Are you saying public courses can't make it without yearly tickets?  I'M NOT TALKING ABOUT MUNIS...AND YES ANNUAL FEES, DUES ETC ARE THE KEY...

BTW...For sure, the golfer is at the top of food chain..of that there is no doubt.  What you are saying is akin to the ocean being at the top of the food chain rather than the shark      NO IT'S NOT

Mike...I think you need to heal yourself by letting go of the anger.   LET'S UNDERSTAND...I DON'T HAVE ANY ANGER TOWARDS ANY OF MY SLAPDICK GCA THREADS...I'M THROWING THINGS OUT THERE TO STIR ....I KNOW HOW TO MAKE MONEY WITH A PUBLIC COURSE...I JUST FIND IT ENTERTAINING THAT THE BUSINESS CAN CONTINUE WITH MUCH OF THIS BS AND SO MANY TAKE THEMSELVES SERIOUSLY....BE COOL...

Ciao

Catch your breath dude.


Ciao

[Mike_Young]

Mike, you say the golfer isn't "IN" the golf business but that the golf course should be at the top of the golf business food chain. I'm confused. The golf course is there for the sole purpose of the pleasure of the golfer...with the amount of pleasure dictating the amount of revenue the owner derives.

How well the owner runs their business dictates their profit.

I think...

That's true.  BUT.....outside factors such as GolfNow have destroyed the pricing structure and the loyalty factor for most of the courses in the US.  To make it golf has to be a dues driven business and not a green fee business.  It's almost impossible to determine the proper profitable green fee with all of the variables that go into how many green fees one will collect. 
An owner needs to have the option of good, better , best when it comes to purchasing from vendors or preparing course conditions etc.  The only way to really get that now is by purchasing used equipment and less employees thus less fairway mowings or bunker rakings or greens rolling.

Hang on...the overwhelming majority of courses are public. Are you saying public courses can't make it without yearly tickets?  I'M NOT TALKING ABOUT MUNIS...AND YES ANNUAL FEES, DUES ETC ARE THE KEY...

BTW...For sure, the golfer is at the top of food chain..of that there is no doubt.  What you are saying is akin to the ocean being at the top of the food chain rather than the shark      NO IT'S NOT

Mike...I think you need to heal yourself by letting go of the anger.   LET'S UNDERSTAND...I DON'T HAVE ANY ANGER TOWARDS ANY OF MY SLAPDICK GCA THREADS...I'M THROWING THINGS OUT THERE TO STIR ....I KNOW HOW TO MAKE MONEY WITH A PUBLIC COURSE...I JUST FIND IT ENTERTAINING THAT THE BUSINESS CAN CONTINUE WITH MUCH OF THIS BS AND SO MANY TAKE THEMSELVES SERIOUSLY....BE COOL...

Ciao

Catch your breath dude.


Ciao

Sean,My breathing is totally under control.  Just don't take yourself any more seriously that I take you and all will be fine...Ciao..