Making full use of all the tools needed to provide, and explain, a thorough financial picture will ensure successful completion of the annual process.
When you enter the world at ten pounds, ten ounces, the likelihood of ever being confused with a triathlete is slim (no pun intended) to none. So when I was working at a club in Minneapolis and three of my co-workers decided to do a triathlon, I surprised even myself (not to mention my wife) by agreeing to join them in the endeavor.
And—other than the fact that I can’t swim farther than one lap in the pool, loathe bike riding and am not an endurance athlete—it somehow seemed like a great idea to swim a half-mile, bike twenty miles, and run four miles, back to back to back.
Before fully committing, I had to strongly assess the risk to my health and mortality. The highest odds of serious injury, or potential death, lay in my attempting to swim a half-mile in an open lake (with a water depth of 113 feet). Without a small miracle, my chances of survival would be solidly between zero and none.
Fortunately for me, it was then that I remembered my collection of wetsuits from my days attempting to surf in Southern California. My winter suit translated into that critically important miracle, also known as buoyancy. As long as I didn’t purposely fight the suit, I could just sit in the water and it would keep me afloat. With this newfound tool, I felt like Mark Spitz, and was ready for the challenge.
Jeffrey Kreafle is the General Manager/COO of Bellerive Country Club in St. Louis, Mo. Founded in 1897, Bellerive CC is only the third club to host all of the men’s rotating majors. Bellerive will also host the 100th PGA Championship in 2018.
In his regular “Yes…But How?” articles for Club & Resort Business, Jeffrey will focus on topics of the greatest interest to club managers—including (but not limited to) master and capital planning, finance, technology, membership development, Board/committee/member relations, insurance/risk management, human resources and compensation/benefits. Questions and suggested subjects for Jeffrey to address in future articles can be sent to [email protected]
The more closely you get in touch with your dreams, the more able you are to make them real. The more vividly you consider how you want your world to be, the more real and effective tools you will have for making it so.
In many ways, our club operations are similar to the triathlon—without the right tools, it would be impossible to cross the finish line. Any serious discussion centering on operations must focus on the tools you have at your disposal. These tools can originate from your own personal training, be part of your team’s training, or come from an external industry consultant’s training. But they must be present for success.
Man is a tool-using animal. Without tools he is nothing; with tools he is all.
At Bellerive CC, we are constantly developing and using financial tools to provide our Board of Governors and committees with the necessary amount of information in their decision-making process. This is never more evident than during our annual budget process, where we utilize numerous tools that systematically build on each other.
A typical budget binder for us has the following trappings:
- Budget timeline and list of general assumptions. (It is critical to develop this one-page sheet early in the process, so everyone is on the same page. Failure to create this alignment can lead to significant edits and work later.)
- Historical summaries in charts (green fees and cart fees, rounds, member levels, etc.).
- Detailed pricing schedules for the last seven years. (In many cases, people are surprised to learn how long a price has not been raised.)
- Dues and initiation fee worksheets. (For private clubs, these are their backbones; for public courses, this could be your green and cart fee worksheets.)
- Upcoming year’s cash flow model, with several options that also identify sources and uses of funds (one of the most critical tools, as you can demonstrate the impact of key decisions on the bottom line).
- Capital improvement fund allocation sheet—a great way of demonstrating all the requested items, and which ones you are able to fund that year. (We also have an 11-point priority scale, to make sure we are focused on safety and infrastructure, not just aesthetics and competitive responses.)
- 10-year financial model (acts as a financial “north star” and helps inject long-term thinking into the annual budget approval).
- Operating statement with three previous years of historical data (which, in our case, is developed with a tool that automatically populates historical data and provides seven lines of detail for each account).
Technology is nothing. What’s important is that you have a faith in people that they’re basically good and smart, and that if you give them tools, they’ll do wonderful things with them.
You will never hear of a triathlon starting with anything but the swim. Whether this is because of potential safety issues with cramping, or the time it would take to put on a wetsuit in a transition—or just simply tradition—it never varies.
Unfortunately, many of us still start our budget review sessions with the operating statement first, and continue to wonder why so many details are questioned. Next time you prepare a budget, be sure to include and start with some of these other tools. You may not become the “Mark Spitz of budgeting” overnight, but you will be amazed at how much smoother the financial waters become in the future.