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key compacting areas on the golf course and/or GPS in carts save the need for rangers? Can signage and other forms of communication improve a patron’s experience and reduce overall costs?
From a driving range perspec- tive, evaluate whether a machine with credit card payment options will reduce labour and perhaps increase use of the range, especially ifthereissignificantdistancefrom the pro shop to the range.
Depending on the quality of the golf experience, some courses have combined the pro shop operation with the food and beverage opera- tion so that one person could oper- ate both functions at slow times.
4. food and bEvEragE
This is an area where most courses have difficulty controlling costs. Typically, the cost control is based on evaluation of margins. As such, the essential process for this operation is appropriately pricing the sales price for both food and beverage. This pricing model allows for the evaluation of costs based upon a margin analysis.
For example, the average cost of goods for food and beverage should average 32% to 36%. The cost of labour typically bench- marks at 46% to 48% of revenue and other costs run 8% to 10% of revenue.
In order to improve margins, operators have examined methods to reduce labour. The opportunity is dependent upon the quality of facility and the type of functions offered. If your facility predomi- nantly services golfers, then most operators have looked to eliminate table service and create more of a ‘cash and grab’ process, whereby patrons place their order and either wait while the food is being prepared (i.e. a ‘Subway’ approach) or come back and receive when their order is called (i.e. a ‘McDonalds’ approach).
The food and beverage area is a function area which may require more in-depth analysis and as eval- uated in previous articles (specifi- cally Golf Business Canada Winter 2016 feature article), may cause an operator to consider outsourcing.
Overall, this area may have the greatest opportunity to improve profitability and reduce headaches for senior management.
cusToMereXPecTATIons
Some operators have considered completing a business plan with the profit predetermined and working backward with conserva- tive projections on revenue and required costs which produce the expected revenue. This is an inter- esting projection. The key is to examine all the functions listed above to determine the impact on quality and service levels.
“From a driving range perspective, evaluate whether
a machine with credit card payment options will reduce labour and perhaps increase use of the range, especially if there is significant distance from the pro shop to the range.”
A key observation is that facili- ties of the future will become more automated with payroll costs matching the quality of product and service, which coincides with the ‘value for money’ expectations of patrons.
Payroll will continue to be the highest expense for a golf course operator in the near-term. Control- ling this cost is essential to a successful operation; however, cutting these costs cannot impact the ‘value for money’ expectation of patrons; otherwise, the loss in revenues will far exceed the cost reductions.
Measurement of customer satis- faction is key. As such, owner/ operators need to measure custom- er satisfaction and/or expectation of service. This can be completed on a periodic basis with a satisfac- tion survey and/or survey of expected service. The best opera- tors always gain insight from their customers to ensure they are meet- ing their expectations.
Golf Business Canada
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Golf Business Canada