Membership numbers and economics

Thread starter #1
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Hi all

This is just from curiosity:

How many members can a one course club support in terms of access to play? Then, how does the economics work? What kind of cost needs to be covered? (And what can cause variability between clubs in this?)

If you add a second course, does everything just double or are there economies of scale?
 
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Good questions but I’m not sure I can answer the huge question ‘how does the economics work’ within the confines of an online forum.

In purely simple terms, the economics of any viable business works by making enough in revenue income to cover all your outgoings and taxes.

To answer what costs you have to cover, consider some of these :

staff salaries
premises (mortgage or rent)
machinery (buying or renting)
cost to buy stock (food, drink, pro shop etc)
furniture and interior fit out
business rates
utilities (water, electricity etc)
business insurances
corporation tax

And don’t forget to make paying your VAT a priority. 👍
 
Thread starter #3
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Good questions but I’m not sure I can answer the huge question ‘how does the economics work’ within the confines of an online forum.

In purely simple terms, the economics of any viable business works by making enough in revenue income to cover all your outgoings and taxes.

To answer what costs you have to cover, consider some of these :

staff salaries
premises (mortgage or rent)
machinery (buying or renting)
cost to buy stock (food, drink, pro shop etc)
furniture and interior fit out
business rates
utilities (water, electricity etc)
business insurances
corporation tax

And don’t forget to make paying your VAT a priority. 👍
Thanks.

I was thinking more in terms of what the cost of running an 18 hole course is, and what might cause variation between courses.
 

Traminator

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Thanks.

I was thinking more in terms of what the cost of running an 18 hole course is, and what might cause variation between courses.
Courses vary greatly in land area, therefore varying the cost involved in maintainence. The cost of the man hours will vary depending on the area and of course quality of the course, as will the cost of all the consumables needed, eg fertiliser and all the magic potions that keep the grass in good order.

A links and a parkland of equal area will have different running costs as the grass is different.

The variables are many.
 

Lord Tyrion

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In terms of variations then the number of staff, number of greens equipment and age of equipment will be key. For example, my course has, I think, one head greenkeeper and 2-3 assistants. I imagine a top course will have twice that number. They will have more equipment, better equipment, newer equipment. This keeps their course more pristine, allows the clubs to charge more for membership and green fees.

The same will apply in the clubhouse. How many staff are employed at a prestigious club compared to a regular course?

In my limited experience the differerence in staff numbers is quite marked.

I'm sure there will be other issues but staffing must be important
 

murphthemog

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In theory we have a by law in place which states the number of members in each membership category. Not sure how or why, possibly due to leasing the land from the council, and being accessed through a housing estate, limiting local disruption.
 

patricks148

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In terms of variations then the number of staff, number of greens equipment and age of equipment will be key. For example, my course has, I think, one head greenkeeper and 2-3 assistants. I imagine a top course will have twice that number. They will have more equipment, better equipment, newer equipment. This keeps their course more pristine, allows the clubs to charge more for membership and green fees.

The same will apply in the clubhouse. How many staff are employed at a prestigious club compared to a regular course?

In my limited experience the differerence in staff numbers is quite marked.

I'm sure there will be other issues but staffing must be important
spot on, i'm a member at two very different clubs, Nairn had 12 full time green staff plus 4 or 5 casual, at least the same full time club house/office staff and two starters ( summer only) then thers the pro shop, comp with the Kings that has 4 green staff 2 bar staff and one and a half in the office office
 

saving_par

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We have 4 full time green staff, not sure about casul but a max of 1 would be my estimate.

Full time secretary plus 1 part time office staff, Professional has 2 part time staff who man the shop when he is coaching.

Very tight ship for a quality club but it works well.
 

rulefan

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Ball park figure.
140 acre parkland course plus driving range and two iron practice areas. 5 staff (6 in summer). Greens budget £450,000 - £500,000 pa.
 

chrisd

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I was quite astounded at the business rates golf course pay. Mine is rated at well over £50k and a nearby course if I remember correctly was nearer £58k
 

jim8flog

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Normally we have 800 members mixed categories Full member about £1000 Two courses and driving range
8 greenstaff, 3 office staff, franchised caterer.

Over the years we have a £100k difference between the good and bad years ie +£50K or -£50K depending on the capital expenditure and maintenance costs in a given year.

The biggest problems with access to play are Saturday and Sunday mornings, particularly in winter, with that level of membership even with a large number of ours being 5 day only.
You just need to work out available tee times to see the problem.
 

jim8flog

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I should say we have one 18 hole course and one 9 hole course and the start problems are mainly with the 18 hole course.

There are certain economies of scale based upon the greenstaff schedule , the same piece of equipment can be used on both courses on different days. The more fertiliser etc you by the better the discount.

When we had just the 18 hole course there were 2 office staff and 6 greenstaff.

With two courses we can have a lot more visitors.
 

rulefan

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I should say we have one 18 hole course and one 9 hole course and the start problems are mainly with the 18 hole course.

There are certain economies of scale based upon the greenstaff schedule , the same piece of equipment can be used on both courses on different days. The more fertiliser etc you by the better the discount.

When we had just the 18 hole course there were 2 office staff and 6 greenstaff.

With two courses we can have a lot more visitors.
But what are the costs?
 

HomerJSimpson

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Not sure what our costs are. I should do as we get a full breakdown at the AGM but that was November and I've long since got rid. However, do people think this is the crux of clubs surviving and folding. If they can't get sufficient membership fees in for initial capital, then irrespective of trying to run operating costs on a shoe string, it's a losing battle, as conditioning on the course suffers, members get annoyed and move on. Some costs like business rates, salaries and equipment are constants. Of course this is a massive generalisation but I think it paints a picture

Of course a lot of clubs do ok, and most I would argue are keeping heads above water, some better than others and this crisis will have tested the financial robustness even with government help. Will this see some clubs (perhaps some historical and established clubs) struggle to survive. How do the better clubs balance the books and keep members happy while others cant?
 

sunshine

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As others have mentioned, the costs vary hugely.

Course: natural links with free draining sandy soil and fine links grasses is much easier to maintain. Some even have sheep grazing to reduce the need for mowing! A parkland course needs more maintenance because it is either too wet or too dry, extensive fairway irrigation costs a lot to maintain.... think of the miles of underground pipes and sprinklers. Use of water: some courses need to pay for water, others have their own source from boreholes or lakes, and some can rely on rainfall.

Clubhouse: a huge Georgian mansion looks impressive but costs a fortune in upkeep. Contrast with an efficient modern building. Some clubhouses are massive and others are not much more than a large shed.

Staff: Significant difference in salaries across the country. As others have said, number of staff could range from 10 to 50 depending on quality of conditioning and level of catering functions etc.
 
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