Like family holiday photos, annual budgets are something most managers and department heads always vow to spend more time thinking about—and doing better—the next time around. Then, before you know it, there's that blank spreadsheet on your desk again, and it needs to be filled out and turned in today. You pull out last year's numbers, slap in some new, fudge-factored figures, and swear that next year will be different.
But it won't be, until you stop viewing budgeting as merely a process of setting numbers, and instead start to see it in a broader context for what it really is—one of your most critical opportunities to plan and direct your part of an operation. In club environments, where the ultimate allocation of funds is subject to either the approval (for private organizations) of membership Boards or committees or (for public entities) to signoffs from municipalites or other governing bodies, what you submit as budget requests or plans is really your best—and perhaps your only—opportunity to bring about real strategic change for a department, or for a club operation as a whole.
Because really, if you approach it correctly, it's not a budgeting process, it's a… …Financial Performance Review You wouldn't think of shortchanging your operations, and your people, when it comes to performance reviews; it shouldn't be any different for your budget. Each new budgeting cycle offers a tremendous opportunity to sit back and take a hard look at where you've been on target, and where you've been off, both with your revenue projections and your estimated expenditures.
Where there are signficant discrepancies, you then need to dig into the reasons why you aimed so poorly, and search for ways to improve your forecasting accuracy going forward. Otherwise, you'll never get away from the problems—and dangers—involved with "stacking one wobbly brick on top of another," as one club GM describes it.
After you've conducted this rigorous review of your financial performance, you should then move on to also treat the budgeting process as an opportunity to fill up your… …Spreadsheet "Suggestion Box" Box"
"We treat our budgeting meetings like a management retreat," a club GM reports. "We go off site and literally start with a clean sheet, and have a complete brainstorming session. We start off by reviewing every column—up, down and sideways—that was used in the previous year's budget form.We look to see if any category's become obsolete, or if we can streamline by merging any lines, or if there's anything that we've failed to properly cover or account for that perhaps we need to break out or show in a different form.
"It's amazing how many things you discover by taking the time to carefully go through this exercise," the GM reports. "And you'd miss them again if you just kept using the same form.
"We then move on to a discussion that focuses on making sure we remember to think about any new initiatives or departments that might be coming on stream in the new fiscal year, like a new snack bar or new membership category," he adds. "In addition to making sure these things will be properly covered and accounted for on both the revenue and expense sides, this usually leads to some valuable exchanges that give us an update of where the projects stand and how each department can prepare for how it may affect them."
After using these steps to subject past budget performance, current accounting structure, and possible future changes to stricter scrutiny, there's one more step that many club managers recommend. Because they also see the budgeting process as a great…
…Benchmarking Opportunity
It's certainly valuable to take the time needed to reassure yourself that your budget accurately reflects where your own operations have been, and where they're looking to go. But assuming you are striving to rank among the best-run clubs or resorts, is that budget also an accurate reflection of how you should be doing, compared to your competition, industry norms and the recognized standard-bearers in the business?
Many club GMs and department heads report that they take a cue from a new budgeting cycle to pull out, and compare themselves to, the latest studies showing average industry costs for key expense categories. This often emboldens them to fatten their requests for particular line items, knowing that they have good substantiating evidence at hand.
Some managers also use the budget occasion to call colleagues and compare notes, and they report that this form of benchmarking also often leads to some eye-opening discoveries—in some cases, about where they've really been shorting themselves, but in others, where they need to take a closer look and find ways to cut back.
"Nothing quite hits home and makes you think that maybe you ought to tighten your belt like your fellow GM expressing amazement that you're 'allowed' to spend so much on summer help," one club GM chuckles. "It's always valuable to exchange ideas with others in the business— but you never learn so much as when you trade actual numbers." C&RB
Summing It Up
• Building budgets solely off previous year's numbers and results can be a dangerous and counterproductive practice.
• Budgeting should not just be seen as the time to set spending amounts, but in a broader context, as an opportunity to assess all aspects of an operation.
• Budget and report forms themselves should be revisited carefully with each new cycle.
• Each new budgeting period offers an excellent opportunity to benchmark against industry norms and standards.
Does Your Club Need a Brand New Approach?
By Larry Gulko
Ralph Waldo Emerson truly understood brand marketing when he said, "Do not go where the path may lead; go instead where there is no path, and leave a trail."
Companies known for establishing signature brands have done just that—created new categories and dominated markets with best-selling products. Think FedEx and overnight delivery… Swatch and fashion watches…Callaway and oversized drivers. These companies have shown that once a product and brand are inseparably planted in the minds of customers, it becomes something much more valuable, and bigger, than any advertising budget you might have. Like MasterCard states…it's priceless.
Going Beyond Bland Discussions of brand marketing might seem out of place in Club & Resort Business, where management attention is often focused on delivering familiar comforts. But there's a huge difference between a club with a bland offer, and a club with a distinctive brand.
As in every other business, creating a "winning brand" at a club or resort involves more than just developing a logo, tagline, brochure, or website. Rather, it's about creating and delivering a unique and emotional experience—a brand essence—that your customers (members and guests) come to recognize, receive, expect and respect, every time they use your product.
To adopt the proper branding mindset in this industry, you must first recognize what it is you're selling. It's not 18 holes, pro shop products, 19th-hole dining, or golf lessons. It's something much more grand—be it entertainment, family programs, social activities, top-level competition, or simply the opportunity to escape the urban landscape and commune with nature.
Finding the Sweet Spots But pretty much every other club offers these things, too. To establish your club as a leading
brand, you have to go further, make your club compelling, and give people a reason to make it their destination. Again, this is a mindset that doesn't require a hefty budget—just the ability to conceive and deliver premium values and phenomenal experiences.Want some examples?
• During the summer months, Willowbend Country Club on Cape Cod (Mashpee, Mass.) offers a variety of programs focused on young adults and children. One of the club's most popular events allows children to fish in the ponds—at most other clubs, the only things being fished for are lost golf balls.
• A yacht club on Long Island (Montauk, N.Y.) provides not only docks (which are as common to yacht club offers as checking accounts are to banks), but also a concierge service that generates customer loyalty—and repeat visits and purchases.
• Then there's a Boston club that identified a profile of its average member (age 45, with two children). This led it to differentiate itself by creating a formal summer children's program that has received wide acclaim, with over 400 kids enrolled. Imagine the revenues from not only the monthly camp fees, but also pro shop sales, as all those kids are outfitted with the proper gear. Talk about a huge win-win.
These clubs, and many others, have successfully established distinctive brands because they understand that customer intimacy isn't the aspiration, it's the foundation. They've made the effort to get timely, top-of-mind information about customers' "sweet spots"—their needs, attitudes, perceptions, expectations and personal values. They've discovered what will not only encourage customers to buy in, but just as importantly, what factors—emotional, financial, and psychological—will keep them away. Armed with this knowledge, they've established an emotional connection with members that drives them to consistently exceed expectations.
In the club world, the sum of customer experiences creates the brand.What are you doing to establish a point of difference between your club and others down the street? How are you increasing the loyalty and lifetime value of each customer? Are you delivering on your promises, keeping integrity in your message, and continually demonstrating that customers can depend on your club for a unique experience?
Remember: It's one thing to get new members, but quite another to keep them spending, participating, raving about your club, and spreading the word about what it represents. That's the difference between being a flash in the pan, and succeeding as a lasting brand.
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