Costs in Maintaining the Primary Amenity, The Golf Course – Fred Layman

Fred Layman, aka “The Club Doctor” is a veteran golf course and clubs in transition operations director/consultant. In a series of blogs, he will be speaking about “Keeping your club successful by Giving the Full 360 Degree Experience.”

Costs in Maintaining the Primary Amenity, The Golf Course

As a multi-sports and golf club consultant, I am often asked, “How much a club should budget to maintain its golf course?”This seems like a never-ending Board of Directors/Owners concern, and that’s understandable. The golf course will consume a significant portion of the cash required to run a club and it is also one of the most visible and member-impacting amenities, so a high level of focus in allowed.  

Since I began working in the club industry in 1994, I have had the opportunity to interact with leaders of clubs across the country. Typically, the discussions I hear about course maintenance budgets involve benchmarks such as cost per hole or cost per member and a variety of specific characteristics ranging from type of grass to geographic location. To understand the way in which these factors might be used determine how much money a club spends on course maintenance, you can undertake extensive analysis of club industry data.

That data reveals that while traditional benchmarks (cost per hole, cost per acre, cost per member, type of grass or geographic location) may represent the actual spending of an individual club, the simple fact that the club up the road is spending more on their course than you are is not enough to justify a decision to beef up the budget. So, how much should you be spending? Contrary to conventional wisdom, industry leaders and myresearch clearly shows that the answer is ultimately not determined by some combination of physical characteristics. The reality is the clubs spend what they can afford.

Before you dismiss this idea as random or arbitrary, consider this: The amount a club can afford to spend is eminently quantifiable and can be easily and accurately benchmarked. The proportionality of spending in clubs is highly consistent and represents the foundation of the common club business model. The business model of clubs, defines these proportions as the benchmark. So roughly one-third of a club’s gross profit (don’t think net) is the affordability at the average club.

Bottomline: Next time you’re in one of these discussions, remember that your club, like all clubs, is subject to the common industry business model and your budget is driven by your gross profit.

Fred W. Layman III, USPTA Elite, Director of Operations/COO, The Windermere Country Club, is the president of an Augusta, GA based Sports Club Consulting Company, Fred Layman Ventures, LLC. His articles can be viewed on FredLayman.com.