Managers

1 May 2014 admin

UNDERSTANDING FLEET FINANCE

By Marc Gelbke The last piece of my series “puzzle” on golf cart fleets is to cover what may be the most important part, and that is fleet finance. What is fleet finance? It is to determine whether or not the cost of the fleet you have in mind is suitable for your facility, and will strongly depend on how much revenue you expect the carts to bring in, as well as the expenses involved in setting them up and operating the program. Another aspect is, of course, how much profit you would like to make with your fleet program. As a general rule, fleet size, rental rates, and cart per rounds should generate income that averages about $1,900 per cart annually. To calculate your number for your facility, you need to forecast golf cart revenue, expense, and profit. Factors you need to take into account when forecasting revenues are cart rental fee charged, cart rounds, number of carts, the trade-in value (if properly serviced it can be 25%-40%), and other income (private or member carts). For the expense side, you need to account for operating expenses (cost of gas or electricity, cost of parts for repairs and labor), acquisition cost – which is two-fold and includes the interest on the purchase loan and/or your leasing charges, and other costs such as storage, cart paths, etc. On average and to figure hard numbers, you can use the rule of thumb of $3 per round for operating expenses. Your next step is going to be to determine your estimated gross revenue (EGR), and the factors you need to determine your EGR are number of carts in your rental fleet, number of rounds per cart, and your rental fee. For example: 57 carts x 185 rounds per cart = 10,545 rounds annually X $17 rental fee = $179,265 gross revenue; 10,545 total rounds X $3 = $31,635 operating expense; $179,265 revenue – $31,635 expense = $147,630 net operating income (NOI); $147,630 NOI – 25% trade-in value ($29,526) = $118,104 estimated annual profit. In closing, as you can see from the example above, managing your cart fleet is an important and vital part of every golf course operation that operates carts, and you as manager should be involved in your fleet program to make sure carts are being maintained properly and serviced on a regular basis to maintain the highest trade-in value possible, which will strengthen your bottom line and keep your golfers and guests happy.

8 Apr 2014 admin

ELECTRIC VERSUS GASOLINE-POWERED GOLF CARTS

By Marc Gelbke In my previous editorials, we’ve covered and discussed the importance of a golf cart fleet, and last month we covered how to determine an appropriate golf cart fleet size for your facility. To continue along this all-too-important topic for managers, we will be going over what you should consider when it comes to comparing between electric and gasoline-powered golf carts, and which one to choose for your facility. Today, roughly 56 percent of golf carts in use are electric and 44 percent are gas-powered. My personal opinion is that both types, if maintained properly, will perform well and satisfy your customers. In terms of leasing and interest rates, both are going to be the same in most cases, so deciding one type over the other can be a difficult choice you have to make, and can come down to personal preference and maybe on the type of cart that has traditionally been used at your facility in the past. Some differences in the type of carts to take into consideration are that electric carts are quieter and don’t emit fumes. Electric carts are also simpler from a mechanical standpoint, but don’t provide nearly as much power as gas carts, which can be an important decision-maker when managing a facility that is very hilly. Gas-powered carts are extremely reliable, and, as mentioned before, have a higher range of power than electric carts. They also don’t require special electric hookups and battery-charging equipment, and are lighter than electric carts and are less likely to damage your course. In relation to operating costs, they are hard to compare and can depend on a variety of factors such as condition of the cart, characteristics of the course, and local differences in cost of electricity and gasoline. When taking the cost of batteries into account, electric carts can be slightly more expensive to operate on a per-round basis; however, gas carts can cost more to maintain. Both types have pros and cons and should be weighed in relation to your specific location, budget available, needs, and preferences of the facility’s members and guests. As you can see, it is important for managers to be informed, knowledgeable and confident in their decision, especially when mangers have to make recommendations to facility owners.

3 Mar 2014 admin

HOW TO DETERMINE A GOLF CART FLEET SIZE

By Marc Gelbke In an effort to continue from my last editorial where I wrote about “The Importance of a Golf Cart Fleet,” I would like to continue with this all-too-important topic on another theme, one that is sometimes an underestimated or even overlooked category by golf managers. Being able to determine what size fleet your facility requires or needs is important from many points of view, such as financials, facility space, and staff. How many carts should you buy or lease? On one hand, you want to accommodate all of your customers and have carts available when golfers request them.  However, having more carts than you really need is a poor investment and can cost the facility (owner) precious revenue. Therefore, having the right amount of carts results in more revenue for the club. Of course, there is no magic formula you can use, as it all depends on the circumstances at your particular facility. There are some basic statistics that are readily available with averages that can be applied to an extent.  For instance, the average 18-hole course has a fleet size of 60 carts in the United States for daily fee facilities and private clubs, whereas municipal courses average 55 carts. South Florida has the highest average size with 77 carts.  Lastly, the national average is 57 carts per facility. The best advice I can give, in my opinion, is to study your facility and situation in order to come up with the right number of carts. There are additional guidelines that can be applied to help determine your number, such as one cart for every 500-800 rounds played annually, or one cart for every eight playing members.  You can also use as a rule of thumb the guideline of 72 carts (two on each tee and two on each green). Other important factors to keep in mind is that you need carts for staff such as course marshals and others.  You need to clean carts in between rounds, and location and usage of your practice facility is another factor. Other considerations are tournaments played at your facility and if you allow private carts to be used, as it may reduce the number of carts you need and the size of your cart barn or cart storage facility. Figure on about 75% of your fleet being rented on a normal daily basis and 25% available for peak demand periods.  As a final note, rent or buy fewer carts than you think you’ll need, as it is relatively easy to add carts to your fleet if needed, and you won’t end up with more carts than you can rent out.

12 Feb 2014 admin

THE IMPORTANCE OF A GOLF CART FLEET

By Marc Gelbke, Contributing Writer, US Golf Managers Association Often overlooked by golf course managers is the importance of a golf cart fleet at our facilities. Fleets directly relate to revenues and budget, and must be successfully managed. Most managers are not aware of the fact that our fleets are the second-largest source of revenue (after golf fees), and often the largest profit center. This article is designed to explain in some detail and point out the importance of a cart fleet and how it could be viewed from a manager’s point of view. I will touch on other aspects of cart fleet management in future editorials, such as:  How to make a fleet program successful; the responsibilities of a fleet manager; how to determine fleet size; and, maybe even how to decide between electric and gas-powered carts. For now, I would like to return to and point to the realization of the importance of having a fleet. Based on US averages, a typical rental concession should generate about $1,900 in income annually per cart (of course, lots of facilities generate even more).  That translates into an average fleet size of 57 cars to $113,430 of annual revenue/profits. Based on these numbers, it is obvious that it is an important part of your operation, and many facilities use this revenue to afford things like an on-site golf professional, pay for improved services, staff, or equipment. Now that you are aware of the importance of a fleet in terms of revenue, profits, and services it can provide to your facility, let’s move on to the “value” a golf cart brings to a facility and your operation. Of course, as managers we all want to provide services to our golfers, as it creates repeat business (again, our number one source of revenue is golf fees). The services a golf cart can provide to our golfers, are, for example: –          It provides a means of transportation to the golfer who can’t walk the course due to physical or health reasons and would otherwise not be able to play your course. –          It eliminates the need to carry your clubs, especially important in rough climates and rugged terrain. –          The use of golf cars can increase the speed of play if properly managed. –          The car rental income has continually offset golf fee increases to golfers, which I am sure golfers can greatly appreciate. Some pretty convincing values to a car fleet, don’t you think? However, on the other side of the spectrum is the facility or your operation, so let’s look at some values a cart fleet provides to your facility: –          It’s a direct source of income and profits. –          The rental income helps pay for salaries, services, and equipment. –          Having carts can increase your facilities image and reputation. –          Car fleets promote more rounds played at your facility, which directly can impact and result in increased merchandise sales in your shops, as well as your food and beverage operations. Once again, some pretty good arguments for the importance of a fleet from the facilities point of view.  In closing, the importance of a golf cart fleet is obvious, and we as managers should be directly and deeply involved in managing our fleets to assure maximized profits for our operations.

14 Jan 2014 admin

The Essence of Golf Club Management

By Geoff Bryant, Contributing Writer, US Golf Managers Association Have you ever entered a pro shop facility where the staff barely gives you the time of day, does not make you truly feel welcome or could care less about any idle, friendly chit chat? I’ve always known that the way employees treat customers, reflects the manner in which they’re being treated by management. The pro shop staff for instance can truly set the mood for the facility itself. They can in fact, give any customer “a good feeling“  about the facility. Customers want to be recognized, they want to be greeted with a warm friendly smile along with eye contact and they want to feel as though they’re special.   Which of course they are. A golf club manager therefore has to be wise enough to understand this and hire an individual with the personality that will fit this bill. How you educate your staff therefore can be a huge factor in the popularity of your facility………. a direct reflection on you, the golf club manager. Education of staff takes continual observation to ensure that staff attitudes remain upbeat and positive.  Tommy Lasorda, the legendary baseball manager of the LA dodgers, once said that managing people is like holding a dove in your hand.  If you hold it too tightly , you kill it, but if you hold it too loosely, you lose it.  In other words employees are not necessarily bad or inferior people because they make mistakes.  They may be doing the wrong things the wrong way because no one has taken the trouble to educate them in the business of golf.  Even though we may be living in a sea of information, many individuals are still looking for direction. Most importantly, when handling your staff though, be sympathetic and encouraging. If people make even a little progress, show them you have noticed and appreciate it. In brief, put yourself in the shoes of your employees on occasion and  ask how you would like to be taught by someone who understands the business of golf protocol more than you do.

3 Jan 2014 admin

WHAT MAKES A GOLF COURSE GREAT?

By Marc Gelbke, Contributing Writer, US Golf Managers Association As golf course managers, we have to ask ourselves, “What makes a golf course great?”  You can ask around, and some will no doubt say it is the location of the course, the layout, the condition, etc.  While there is no question that these are important, in my opinion, the main reason a golf facility is great and has golfers come back is YOU AND THE STAFF. Time and time again, you hear from golfers and guests that they would come back because of how the staff makes them feel. You can have the best-kept secret, most beautiful facility, but if you don’t have a staff that sincerely cares about the players, members, guests and facility, they will inevitably find fault. Service and profits will increase and decrease according to the level of service provided.  As a manager, the three most important words you can hear from your customer are, ”I’ll be back!” “I’ll be back” means satisfied customers; satisfied customers mean increased profits and a successful facility with staff that cares.  Remember, I always used to teach my staff one important aspect of our business, and that is that I can spend a lot of money on merchandise to stock the golf shop, uniforms for all to wear, and a ton in maintenance to make our course look great, but the one thing that is FREE and makes us the most profits is “customer service.” We can overcome many obstacles in our day-to-day duties of running a golf course when we provide excellent service to our customers and treat them with respect, courtesy, and professionalism.  One way to achieve excellent customer service is to create regular scheduled supervisor and staff meetings.  Short, well-orchestrated meetings allow you to visit your vision and goals as manager, and allow you to bring forth issues that need attention and corrections. These meetings are an excellent time to role-play situations that have occurred on the property, and to remind each other of the commitment to service excellence, despite challenges that we all face from time to time. You can also use this time to provide positive feedback for a job well done. So, the next time you ask yourself, “Is my golf course great?”, you may look at it from a different perspective.

19 Apr 2013 admin

PERFORMANCE REVIEWS

Marc Gelbke, Contributing Writer, US Golf Managers Association Conducting performance reviews with your employees is an important part of a manager’s responsibilities. It is a great tool to see where you are in terms of productivity, knowledge, and performance. Additionally, you get the opportunity to see how each of your employees thinks they are doing during their self-evaluation, which usually leads to an “in-the-middle” balance of where they actually are, and you the manager can now prepare a plan for improvements. Employees often see performance reviews as a session of criticism, but in actuality, it is used to discover ways in which an employee’s skills can be better utilized to fulfill your facility’s goals and objectives. When administering performance reviews, plan in advance and schedule specific appointment dates with your staff. I would recommend beginning preparations at least 2-3 weeks in advance. Allow at least one hour per review, and provide your staff a blank copy of your review form, instructing them to use it for a self-evaluation form to be completed by the employee and returned by the appointment date session for your review. Your performance review should into account your specific subject areas of review, such as quality of work, punctuality, attention to detail, job knowledge, judgment, decision-making skills, reliability, attitude, and any other aspect that you feel is relevant to your operation. Your review should also include short definitions next to each subject area to avoid any kind of misunderstandings as to what specifically you are looking for as a response. For example, “Punctuality = meeting deadlines and completing assignments on schedule.” Understand that your performance reviews are an important part of each of your employee’s personnel file, and can be used to determine promotions, pay increases, and even disciplinary actions, if needed. Reviews should be conducted at least annually for each employee, but it is a good idea to do them more often, such as every six months, to be able to follow progress guidelines and improvements. Remember, performance reviews are not to criticize employees but to improve your staff, your facility, and your overall operation.