Thursday, April 25, 2013

I PREDICTED TODAY'S GOLF BUSINESS DILEMMA IN AN ARTICLE I WROTE YEARS AGO


I wrote this paragraph over 12-years ago - updated in 2009-10. In particular, it's the last paragraph on my article about the modern golf ball.  

"Unless cooler heads prevail in the construction of new golf courses, look for a decline in golf participation in the next few years - with or without Tiger. There are already a number of golf course in financial trouble in Canada and the USA (some estimates as high as one in four golf courses cannot pay their bills). They can't pay their bills, because play has dropped."
Michael A Kahn, 2009 - 2010


The full article was about the development of the golf ball, particularly the Surlyn cover and solid core developed in the late 60's and early 70's. I tested the Spalding range ball when it first came out.

The article was really what I felt was one of the reasons golf grew so dramatically in the 70's and 80's - the economics of the golf ball. Mainly, the price of golf balls was coming down while the durability of the modern golf ball is almost forever. 


Wednesday, April 24, 2013

WHY DO SO MANY GOLF COURSE OWNERS CHASE 10-CENT DOLLARS?

WHY DO GOLF COURSE OWNERS SPEND SO MUCH TIME AND ENERGY CHASING 10-CENT DOLLARS?



Let me make it simple: When a person hands the clerk $60.00 to play a round of golf the only exchange in inventory is the pencil and score card. All the preparation is done - golf course maintenance, etc. 

If a person spends $10.00 in the grill room for a beer, burger and fries, the cost of that sale including ingredients, preparation and serving, plus support infrastructure will be at least $9.00. So here's my simple math:

Collect $60.00 for a green fee. Net = $60.00
Collect $10.00 for beer and burger. Net $1.00. But wait!

I need to sell 60 cheeseburgers to take in $60.00! So, what's my point?

Concentrate 90% of your total energy into putting golfers on the golf course. Chase those 100-cent dollars - then make the best of the concession 'opportunities' while the customer is on your property.

MY FORMULA: 80-15-5 
I believe the revenue formula for a daily fee or semi-private golf club should be 80% from fees, 15% from the grill room, and 5% from merchandise. The closer a golf course business is to my formula, the more likely it will be a successful business. 



What is your experience? Write me: mike@golfmak.com



HOA BATTLE WITH THE DYING GOLF COURSE


“In the RED corner, representing 90% of the community who are non-golfers - the HOA that wants to kill the golf course. In the BLUE corner, the 10% who are golfers who want to save the golf course.”



THERE IS ONE THING THE BATTLE BETWEEN GOLFERS AND NON-GOLFERS HAVE IN COMMON

I receive calls almost every week from a home owner’s association (HOA) board member about the dilemma facing the community’s failing golf course. In every case the classic confrontation between the golfers and non-golfers develops. Unfortunately the non-golfers outnumber the golfers as high as ten to one. In essence, if the golf course cannot pay its way and the non-golfer group prevails the golf course is doomed! But there will be consequences.

The battle often obscures the economics that goes right to the core of the individual household: Its Market Value! The Golfer feels if the golf course closes part of the beauty of the neighborhood is lost. The non-golfers, especially the home owners on the other side of the street, say they don't give a damn about golf, because they don’t play golf. They (non-golfers) call golf a waste of time, money, and real estate. “Why should I pay so clowns in pink shirts can chase a little white ball around a field and curse like truck drivers?”

ARGUMENT ON BOTH SIDES

The writer agrees, somewhat, with both sides in the debate. I do feel a person who is not a golfer should not be required to subsidize a person to play golf. After all, golf is probably one of the greatest wastes of time, money and real estate ever devised! I mean, golf was illegal in Russia till very recently. On the other hand, however, a golf course is permanent open space or green space. Managed, yes, but 99% of golf courses built since the early 80’ are on designated green space land and likely cannot be used for any other (commercial) purpose. So, the non-golfers just say, “Let it grown in.” Grow in? Have a look:




MY POINT…
THE ONE THING GOLFERS AND NON-GOLFERS HAVE IN COMMON – THE VALUE OF THEIR PROPERTIES.

First of all, while the debate goes on the one thing that hurts the neighborhood is uncertainty. Let’s make it simple: If you want to sell your house, what do you say to a potential buyer when you don’t know whether the golf course will survive or not? Wait! You be the buyer. Would you buy a home not knowing whether the golf course behind you will survive or not? Would you buy a home in a neighborhood with an HOA in full battle over the plight of the number-one amenity? Which adds another question: 

What is your home worth if nobody will buy it? Ask the residents at Turkey Creek in Alachua, Florida. The golf course has been closed since May, 2010. Check this aricle: http://www.golfmak.com/residential%20golf%20course%20dilemma.html. Also, this article:  http://www.golfmak.com/HOA%20Golf%20Course%20Home%20Facts%20learned%20january%2017%202012.html

So, both sides have the value of their property at stakeespecially during the uncertainty period. In my experience I believe higher end golf course residences have far more to lose than more numerous lower priced residences. Sorry, but nobody seems to have useful data to back up my assumption. 

First of all, I believe the higher the price of homes in a golf course development the more they have to lose both percentage (%) wise, and in real dollars ($) if the golf course closes. A $1 million dollar home could drop 50% or more if its community golf course fails. However, I don’t believe a $200,000 home will lose more than 20% if the course closes. In fact, homes that do not have golf course exposure in a lower priced golf neighborhood may actually become more valuable than those backing up to a weed patch that was once a pretty green golf course fairway. I believe too, since there are many more lower priced golf course residential properties around a community golf course than upscale developments, individual homes would be less vulnerable, collectively, by the loss of the golf course. Based on my assumptions, I believe saving a golf course may be more important for home values in high-end neighborhoods than ‘average’ priced golf course neighborhoods. 

Then, I have further for arguments or a question for the high priced home owners who say they don't care about the golf course: If you don’t play golf and don’t care about the golf course, why would you buy a home in a golf course community? Secondly, if you can afford to own a home in an upscale golf course community you’d better be prepared to pay whatever it takes to maintain the full integrity of the neighborhood, whether you play golf or not. Unfortunately, golf course communities that do not have covenants that protect the golf course via HOA financial support have a tough road to haul. Attorneys will line up for that fight all day long! Nobody win but the attorneys - believe me!

I spoke with an HOA board member recently who outlined exactly the above dilemma. The development had only 230 upscale homes trying to support an ultra-high end golf course. Classic: The non-golfers say, “Let it grow in!”

If the upscale neighborhood golf course grows in (fails) I believe home values in that neighborhood could plummet 50% or more (my assumption only). I say that, because with a failed amenity (the golf course) the overall development becomes known as a failed neighborhood. Nobody wants to own a home in a failed neighborhood.  Ask yourself, “Would you?”

I know it can be expensive to keep up an upscale golf course with 12-foot green speed maintenance demands. But if homes in the neighborhood are $1 million plus value with a golf course in the back yard they need to come to grips with it and pay what is needed to keep the golf course alive. It’s an insurance policy on the value of your property. If you have to pay $5,000 a year to belong to the golf club to avoid a $500,000 drop in the value of your home, I would call that a pretty good investment. 

Hey! I say, "If you can afford a $1 million dollar home, you can afford to contribute to the integrity of your neighborhood – golf player or not."

By the way, I get calls from everywhere, like; Wyoming, Montana, North Carolina, New York, Virginia, Georgia, Wisconsin, Alabama, California, Florida… well, you get the point. Same dilemma every time! Some described meeting with screaming and hollering - even fist fights!

The key, in my opinion, is for all to agree on one thing: The value of each resident's property. Then the arguments can start making sense.

Remember, your First consultation is always free: mike@golfmak.com, of call me: 941-739-3990. 

Any comments?

Mike        

Monday, April 22, 2013

NEW GOLF COURSE OWNER? READ THIS

MISTAKES FIRST TIME GOLF COURSE OWNERS OFTEN MAKE


I deal with first-time golf course owners often. I refer them to an article on Golfmak.com: http://golfenomics.bizland.com/what-not-to-do.htm.

The article basically says, "Make changes slowly and carefully." I recommend sitting back and observing before making verbal or written commitments to customers, employees and services.

Instead, take your time and find out how the business and the asset behaves. Often, changes you had in mind will have more serious consequences than leaving them alone.  

Mike


Wednesday, April 17, 2013

GOLF CLUB BOARD OF DIRECTORS - A PUZZLE!


I guess I really need a psychologist to understand the mindset that drives a golf club board of director’s. In my experience, I can only anticipate that a golf club board of directors is almost certain to make a dubious decision – especially when being advised otherwise by experts in the industry.

Here are a few examples (in my experience):

1.       Near Carlton, Ontario the board chose a clubhouse design that looked more like a school than a comfy golf course clubhouse – even though one of the designs they were presented with was an excellent well thought plan by an expert. One (hilarious) result of the final product placed the men’s room such that every time the door swung open there was absolutely no privacy while men were going about their business. Another flaw was that the pro shop was a completely separate building, a cost control issue, which requires additional personnel to manage as a completely separate building – even during the slowest periods. It was also a security issue. The board knew all that, but chose to overlook it.

2.       A board of directors of a club near Hazelton, PA, watched their club’s membership fall from over 350 to fewer than 200. The club was desperate for an experienced general manager with the skill to manage a country club in the marketplace of 2012. With that recommendation clearly advised, the board hired a person with no clubhouse experience, no turf experience, no food service experience, and no knowledge of the game of golf. A decision that made absolutely no sense.

3.       A board of directors at a golf club in upper New York State decided they needed a large clubhouse with 400 men’s lockers (now 90% empty), a full service restaurant and a banquet hall. With an experienced building contractor in their midst, pleading with the board to adopt a sensible clubhouse plan, they went ahead with the ‘palace’ anyway. Five years later the club was bankrupt. The board members who pushed for the monster clubhouse abandoned the club. Soon after, the property was sold at an auction for approximately 40 cents on the dollar.

4.       A board of directors at a Sarasota-Bradenton golf club spent over $1/2 million to re-grass its 18 greens without bidding the job. Instead, the board hired a contractor who set the crew to work. A few greens were re-shaped as was one fairway. However, around the same time, I re-grassed 18 greens with average sizes twice the greens at the Bradenton course for $110,000 complete! We hit with Round Up on June 14. We corrected some drainage issues, tilled, gassed, and sprigged (in Champion Ultra Dwarf). They were ready to play by August 15 - the same summer! Players raved about them too!

5.       Here’s the most puzzling board behavior: It’s my own board of directors at the club at which I am a member! I live on the fifteenth fairway. Even though I advise golf courses all around the country, which this board knows, they chooses not to ask my advice – even when it is offered completely free. In fact, when I offer to sit in meetings as a ‘fly on the wall’ I am (currently) not even invited.

Those are the board of director puzzles. It seems their apparent intellect evaporates when they meet around a conference table. What comes over them?

In the golf industry everything was fine 30-years ago when golf was still in a seller’s market mode. Private clubs had waiting lists and lots of money to work with. However, about 1995 (yes that early) private clubs began losing their waiting lists, because aging members were resigning (or dying) at greater rate than the waiting list was being absorbed. In a short span boards were suddenly faced with deficit membership rosters and financial problems. They were completely baffled. So, the big fat treasury that could do no wrong was empty – and the clubhouse needs a new roof!

Beyond the tipping point, survival of the golf course required a high level of ‘golf course’ business skill. Boards were completely inept to manage shortfalls. They tried the same strategies: Cut back employee hours, cutback clubhouse service hours, bunkers groomed every ‘other’ day, and the greens mowers will have to make it another year. However, in all they attempt to do, they seem to avoid expert golf course business advice.

I think a board of directors, collectively, is like the man who refuses to ask for directions! He’d rather become hopelessly lost rather than admit he needs help. Does that analogy sound right?

What is your experience? My email: mike@golfmak.com

Mike

Thursday, April 11, 2013

GOLF COURSE WEB SITE MISTAKES

GOLF COURSE WEB SITES

I am told by Internet marketing experts (I have a close personal relationship with a web site expert) that web sites today need to be designed to get to business - the sale - as quickly as possible. Too much 'razzle-dazzle' slows down load time, which is the cardinal sin of the web sites these days. Slow loading web sites lose impact!

A web site needs to be somewhat the way a newspaper news story reads: It answers the 5-W's in the first paragraph. Who What, Where, When, Why. Then the story follows. I believe the first glimpse of a golf course web site should answer 'What, Where' first - with address and phone number clearly visible at the top of the page (because that's where your eyes look first).  

Read my article at the Golfmak web site: http://golfenomics.bizland.com/golfcoursewebsitemistakes.html.

I know I am adamant that golf courses need to broadcast advertise as well as networking, but a web site is a first impression for many new customers. Fast loading, easy navigation, and easy and fast to make a purchase should be the goal of your web site today.

Mike



Tuesday, April 9, 2013

FAILING GOLF COURSES AND THE HOA


“In the RED corner, 90% who are non-golfers, the HOA, wants to kill the golf course. In the BLUE corner, the 10%, who are golfers, want to save the golf course.”



THERE IS ONE 1 THING THE BATTLE BETWEEN GOLFERS AND NON-GOLFERS HAVE IN COMMON

I receive calls almost every week from a home owner’s association (HOA) board member about the dilemma facing the community’s failing golf course. In every case the classic confrontation between the golfers and non-golfers develops. Unfortunately the non-golfers outnumber the golfers as high as ten to one. In essence, if the golf course cannot pay its way and the non-golfer group prevail the golf course is doomed! But there will be consequences.

The battle is economics right to the core of the individual household. The Golfer feels if the golf course closes part of the beauty of the neighborhood is lost. The non-golfers, especially the home owners on the other side of the street, say they don’t give a damn about golf, because they don’t play golf. They call golf a waste of time, money, and real estate. “Why should I pay so clowns in pink shirts can chase a little white ball around a field and curse like truck drivers?”

ARGUMENT ON BOTH SIDES

The writer agrees, somewhat, with both sides in the debate. I do feel a person who is not a golfer should not be required to subsidize a person to play golf. After all, golf is probably one of the greatest wastes of time, money and real estate ever devised! I mean, golf was illegal in Russia till very recently. On the other hand, however, a golf course is permanent open space or green space. Managed, yes, but 99% of golf courses built since the early 80’ are on designated green space land and likely cannot be used for any other purpose. So, the non-golfers just say, “Let it grown in.” Grow in? Have a look:


Ravines Golf Resort was a first rate golf course in Middleberg (Jacksonville), Florida. The weeds will just grow taller. It will take many years (generations) before the original forest returns. 

MY POINT…
THE 1 THING GOLFERS AND NON-GOLFERS HAVE IN COMMON – PROPERTY VALUES

First of all, while the debate goes on the one thing that hurts the neighborhood is uncertainty. Let’s make it simple: If you want to sell your house, what do you say to a potential buyer when you don’t know whether the golf course will survive or not? Wait! You be the buyer. Would you buy a home not knowing whether the golf course behind you will survive or not? Would you buy a home in a development with an HOA in full battle dress over the plight of the number-one amenity? Which adds another question: What is your home worth if nobody will buy it?

So, both sides have the value of their property at stake – especially during the uncertainty period. I believe higher end golf course residences have far more to lose than more numerous lower priced residences. Sorry, but nobody seems to have useful data to back up my assumption.

First of all, I believe the higher the price of the homes in a golf course development, the more they have to lose both percentage wise, and in real dollars if the golf course closes. A $1 million dollar home could drop 50% or more if its upscale golf course amenity fails.  However, I don’t believe a $200,000 home will lose more than 20% if the course closes. In fact, homes that do not have golf course exposure in a lower priced golf neighborhood may actually become more valuable than the ones backing up to a weed patch that was once a pretty green golf course fairway. I believe too, since there are many more lower priced golf course residential properties around a community golf course than upscale developments individual homes would be less vulnerable collectively by the loss of the golf course. Based on my assumptions, I believe saving a golf course is more important for high-end neighborhoods than ‘average’ priced golf neighborhoods.

Then, I have further for arguments with the high priced home owners: If you don’t play golf and don’t care about the golf course, why would you buy a home in a golf course community? Secondly, if you can afford to own a home in an upscale golf course community you’d better be prepared to pay whatever it takes to maintain the full integrity of the neighborhood, whether you play golf or not. Unfortunately, golf course communities that do not have covenants that protect the golf course via HOA financial support have a tough road to haul. Attorneys will line up for that fight all day lng!

I spoke with and HOA board member recently who outlined exactly the above dilemma. Only 230 upscale homes trying to support an ultra-high end golf course. Classic: The non-golfers say, “Let it grow in!”

If the upscale neighborhood golf course grows in (fails) I believe home values in that neighborhood could plummet 50% or more (my assumption only). I say that, because with a failed amenity (the golf course) the overall development becomes known as a failed neighborhood. Nobody wants to own a home in a failed neighborhood.  Ask yourself, “Would you?”

I know it can be expensive to keep up an upscale golf course with 12-foot green speed maintenance demands. But if homes in the neighborhood are $1 million plus value with a golf course in the back yard they need to come to grips and pay what is needed to keep the golf course alive. It’s an insurance policy on the value of your property. If you have to pay $5,000 a year to belong to the golf club to avoid a $500,000 drop in the value of your home, I would call that a pretty good investment.  

Hey! If you can afford a $1 million dollar home, you can afford to contribute to the integrity of your neighborhood – golf player or not.

By the way, I get calls from everywhere, for instance: Wyoming, Montana, North Carolina, New York, Virginia, Georgia, Wisconsin, Alabama, California, Florida… well, you get the point. Remember, the first consultation is free. 

Any comments?

Mike        

Monday, April 8, 2013

FLORIDA’S WILD PIGS TEARING UP GOLF COURSES

Have you heard about wild boars (or pigs) running around Florida’s hinterland? This article says there are over ½ million of them in Florida – apparently a perfect environment for feral (wild) boars: http://abcnews.go.com/Technology/DyeHard/story?id=827155&page=1#.UWK5bZNg-bM

I’m seeing quite the damage to golf courses from foraging bands of pigs. They will virtually roto-till patches of fairway from a few square feet to several square yards. I'm told they are digging for worms or grubs that are found within four to six inches from the surface.

Damage to golf courses by wild pigs can be sudden and extensive. The image here shows part of a golf green torn to shreds by pigs on an overnight forage. We were chasing them continually when I was managing a 27-hole golf course east of I-75 in Sarasota County, Florida.

Our crew would report a 60-square foot dig on a fairway that was not there the day before. We placed traps and hunted them with bows. One of our employees was an expert with bow and hunted them daily. A bow makes no noise so he could kill several in a pack before they realized the danger and ran off. A gun only gave him one chance, because the 'bang' sent the pack running, which he said would take them non-stop for miles. One summer he told us he had over 200 kills. He called them good eating, but they had a wild flavor most of us don’t like. Those he trapped he took home and fattened them up.

About a dozen years ago I was doing some work at a golf course called Turtle Hill, in Meunster, Texas. The entire course perimeter was fenced with electric wire - set at about ten inches in height. The owner was protecting the course from boars he said were tearing his golf course to pieces.

If anyone has any comments or have successful preventative measures to keep feral boars from tearing up a golf course please comment here. One solution I suggested is to make sure there are no grubs in greens and fairways to attract foraging boars and pigs.

One thing I believe: There are few businesses out there that address as many different issues as a golf course. Even wild pigs! 


Mike

Sunday, April 7, 2013

GOLF COURSE MARKETING TRAP?

DEPENDING SOLELY ON EMAIL AND NETWORK MARKETING I BELIEVE COULD BE A TRAP!


I was one of the very first in golf to utilize email lists to promote tee times. I started the idea as manager of Oak Ford Golf Club in Sarasota, Florida. It was actually my son who told me about a list service known as 'One List' that would send bulk emails. I found it handy, because every day we had an empty period on the tee sheet for about 30 minutes before the mid-day price drop. For instance, on Friday night we would check the tee sheet, then try to sell those empty tee times at a discount. It was an easy 'click-of-a-mouse' to inform thousand of already-customers of the special.

My use of email began away back in the 90's (I think a Tyrannosaurus Rex was on our list). Remember, email addresses were difficult to collect and many were misspelled and never got to their destinations. I remember almost all emails then were AOL. Back then we'd send the emails and wait for the phone to ring (no online tee times back then either).

Anyway. it was so easy to sell a couple more tee times using email. I mean, you could not place an ad in the newspaper that quickly.

Well, that was the beginning of using the Internet to market a golf course. If I wasn't the first for golf, I was damn close to it!

Since about 2005 or so, I noticed everyone was building email lists and ignoring their traditional marketing avenues like newspaper, radio and TV. Marketing budgets went from $60,000 to almost zero by using the network to sell tee times. So here we are in 2013 and it seems the only way to market a golf course is via the Internet. Has this change in marketing golf courses contributed in some way the a decline of golf players? I believe there is at least some connection. My rather crude illustration above tries to make my point:

I believe you need to be clearly visible in the marketplace to get new customers, and to remind occasional customers who are not on your email list to think of your golf course next time they play. I mean, how do they hear about your golf course if they are not on your email list - if that's the only way you advertise?

That's the trap you fall into.

I learned how to market a golf course during my 25-years in Peterborough, Ontario. I never forgot a mistake I made one spring when I figured I could save close to $50,000 by not advertising at all. I figured I could have a great time with $50K to myself (and my family). What a disaster!

In 25-years I only had one single two-month period when my numbers actually went 'south' and that was the year I decided not to advertise. And I am a numbers guy. I watch my receipts almost every hour. As numbers decreased I could see the $50K plans for me and my family were in jeopardy.

I woke up to the power of marketing, and I can tell you, that year would up my best ever.

I engineered a marketing plan that blew the lid off numbers for the rest of that season. Without going into details, hit every media avenue out there. By mid July my number-1 complaint was. "No place to park!" People who know me love to hear me say that!  

I spent the $50K and more in marketing and also earned my $50K to boot! If anyone tells me advertising doesn't work I see a person doomed to a business failure.

From my marketing experience in Peterborough I learned to fully appreciate the power and necessity of broadcast marketing, which brings me back to my point: You cannot depend solely on Internet network marketing to promote your golf course, or any business.

Yes, the Internet should be part of your marketing, but not your only marketing source. I believe those who have depended on network marketing entirely are the ones who's rounds are down the most.

Don't fall into that trap. You still have to advertise.

Mike

      

Saturday, April 6, 2013


MOE NORMAN AND THE MASTERS

Now that he is gone, the late Moe Norman, the eccentric Canadian golf pro, gets more recognition than he ever got while he was alive. I have a little guilt about appreciating his greatness myself, because I had a whole summer with the greatest ball striker ever and didn't realize it.

I was a member of the Canadian PGA, and pro manager of a golf center in Peterborough, Ontario. My boss at the time was PGA Pro, Bert Turcotte, who was considered the first real golf business entrepreneur in Canada. Moe Norman worked for Turcotte's company, Eglinton Golf Enterprises, at the time and Bert thought it would be good publicity for his fledgling golf center in Peterborough for Moe to 'play' out of the golf center. So I saw Moe every day during the 1964 golf season. I even played a few rounds with him - just the two of us. Moe and I played Peterborough's Kawartha Golf Course, par-70. He was never over par. Always somewhere between 60 and 65. 

So, Moe came into the Peterborough golf center every morning and hit hundreds of balls, then left to play Kawartha Golf Course on the other side of town. He always had a Coke in his hand. Picking the range after his practice sessions - up to 500 balls - was easy, because it took about three passes of the ball picker to bring them all back. In fact, it looked like someone dumped a 500-ball bucket of balls in one spot. Later in the day Moe would disappear somewhere, then show up on the range next morning. He never spoke much, except to razz me about one thing or another.  

Moe kept his entire life in the trunk of his car - a Cadillac - even his cash! 

But this is about Moe Norman’s one-time participation in the Masters. I heard the truth directly from the man in the middle of the controversy, the late Sam Snead (May 27, 1912 – May 23, 2002).
Sam Snead and me at Homestead in '99

Back in 1999 I was invited to Homestead for a business meeting with Anne Snead and his son Sam at the Homestead in West Virginia. While there we got to hit balls on the range with Sam Snead himself. I had a chance to talk to Mr. Snead and I mentioned I had a year with Moe Norman as my playing pro in 1964 in Canada. Sam did a double-take and told me he believed Moe to be the best golfer ever. I asked what he (Sam) knew about Moe’s withdraw from the Masters. This is what Sam Snead told me;

“On the night before the first round Moe and I talked about the golf swing and I gave him a tip about the grip. Moe went to the practice tee and hit balls all night. The next day his hands were raw and bleeding so badly he could not play.”

History says Moe Norman played nine holes on the first day of the 1957 Masters and withdrew. He never played there again.

Too bad, because Lee Trevino, a golf legend himself, said in an interview that, “Moe Norman should have won every major tournament in the world.”    

Anyway, there’s confirmation of what Sam Snead told me on a CBC program: http://www.cbc.ca/archives/categories/sports/golf/on-the-ball-canadas-golfing-greats/moe-norman-my-way.html.

I would love to hear anyone’s experiences playing or watching Moe Norman. I will repeat them here from time-to-time. However, be advised; Most people don’t believe half the stories about Moe, because they are unbelievable. But in my experience after a year with Moe Norman, I can believe them! 

Mike  


Friday, April 5, 2013

YOU HAVE TO SEE THIS!

Bubba's Hovercraft Golf Cart: http://www.youtube.com/watch?feature=player_embedded&v=z5u_2bGPdUY#.

Mike

HEAD COVERS ON LINE, SPAGHETTI AND GOLF BALLS – NEAT ONLINE GOLF SPECIALTY SHOPS

My good friend and business colleague, Bill McIntosh, a PGA Professional, has operated web site, "Head Covers Online" (http://www.headcoversonline.com/) for several years. It started small, as do most such businesses. But Bill and his wife, Dianne, stuck with it to the point it is now a going concern. They've added many products and made it very easy to place an order for all sorts of golf accessories.

Head Covers Online built itself around specialty items like; head covers (of course) in any animal you can imagine, plus, college logos, favorite sports teams, etc. They expanded to many accessory items and now have an endless selection, which they can ship directly to you - virtually everywhere.

Bill and Dianne opened another brand new site with a super name: ‘Spaghetti and Golf Balls’ (http://www.spaghettiandgolfballs.com/) including a wide selection of accessories including golf bags, logo golf balls, umbrellas, divot tools, practice nets and just about everything.

Bill and I go back several years and have collaborated to managed golf courses together. Between us we have over 100-years’ experience in every type of golf course operation – snow country or palm trees. We are always ready to team up to provide short term interim golf course management.

Anyway, I hope you’ll visit both of Bill and Dianne’s golf accessory sites and keep them in your favorites - handy when you’re looking for thoughtful gifts for the special golfer in your family or office.

Mike

Thursday, April 4, 2013


3 REASONS WHY YOU SHOULD RE-EXAMINE YOUR GOLF COURSE MARKETPLACE

By Michael A Kahn, Golfmak, Inc. Golf Course Business Consultant, Member of GCBC.

If your golf course or country club is doing better than it was five years ago you don’t need to read any further. For most of you, I believe a market update is the most important exercise you will undertake for the future of your golf course or country club. Make no mistake: The market you served ten years ago has changed. Have you adjusted to it? Nope!
I call it, “Asleep at the wheel!”   

So what has changed?

1.      Participation in golf in general has flattened – I say, “Declined!” in the past dozen years (read an article I published on my web site in 2000: http://www.golfmak.com/ball.htm – particularly the last paragraph in the article). For instance, in Sarasota, Florida over 90-holes of golf closed for good in a matter of a couple of years. But rounds at the remaining courses did not increase. Whoa! In 2012 we lost 154 golf courses nationwide. Remember, they were adding over 300 courses a year in the 90’s.

2.      The club’s grill room looks like a senior citizens lunch room. Twenty years ago the average member’s age was 55, now it’s 75. Are you ready for when they’re 85? I recently dealt with a private club that became suddenly financially desperate. They realized too late that the average age of the membership was over 70. No future! Every time they had to assess the membership to pay for capital emergencies more would simply resign (the ‘green banana’ syndrome).

3.      One private country club suddenly found out their 99.9% all white neighborhood had become over 30% non-white. The new local population had a much lower golf participation rate – less than one percent (national average hovers around 10% - National Golf Foundation, Jupiter, Florida). Mathematically, the reduction in participation by the new demographic more or less matched the drop in membership at the club. I call it, “Asleep at the wheel!” 
  
If the three reasons above don’t drive your decision to re-examine your marketplace, I predict your golf course is doomed.

I understand and appreciate the power of marketing. However, I learned over 50-years ago not to waste time and money chasing a customer who has no interest in my product (golf).
   
So, what should you try to learn, and what do you do with it?

You need to know your current loyal customers. They tell you they like to play your golf course for one reason or another. Look for commonalities like ages, skill levels, busiest tee time hours of the day, favorite grill room items, etc. When you have a profile of your main customer base you either need to change the profile – especially if they are all over 70, or if they are younger, go to the market to find more people like the ones you already have. That’s why you need an updated market analysis. Then you can decide on your next move.

I have colleagues who specialize in a golf course market analysis. The cost is not much more than a weekend ad campaign, but it can be a map to a gold mine for your golf course.

Want to discuss this article? Call me: 941-739-3990, or write: mike@golfmak.com. It’s a free consultation.   

Wednesday, April 3, 2013

April 3, 2013. While walking the dogs this morning...

I met my golf buddy-neighbor on the sidewalk while walking the dogs this morning. He was telling me how he was frustrated trying to stop a leak after he installed a new water heater himself. It was a brass coupling that he could not tighten enough to stop a small drip. No matter how tight he made it the leak still persisted. I can hear the expletives - like missing a 3-footer.

A one-hour job lasted all afternoon - not to mention two trips to Lowes, missing a golf game, and rising blood pressure.

Next day at the golf course he mentioned his dilemma to another golf buddy who happened to be a master plumber. Of course, the expert (plumber) said he knew exactly what the problem was and further, it would be a 2-minute fix! It was the way the seal was placed - backward.

Fixed!

The moral of this story is that the expert, in this case the plumber, understood the problem immediately. He drew from many years of experience as a professional plumber. That's the kind of experience I use as a consultant in my (golf) industry.

With the golf course business in a correction spiral (I'm being nice), I see golf operations operating like my neighbor and his water heater. I'm the plumber.

When I take on a golf course analysis assignment endless things jump out at me like Jack-in-the-boxes. Every one of these Jacks is throwing money into the wind - dollar bills, ten dollar bills, hundred dollar bills - even $1,000 dollar bills! Money gone for good! The sum of all those Jacks adds up to thousands and thousands of $ dollars every day week, month and year.

Really! I once walked into a golf course and found over $110,000.00 (that's one hundred and ten thousand dollars) in less than three minutes. At an evaluation of 10 X earnings, which was the norm at the time, that $110 thousand computed to $1.1 million in value to that particular golf course. My modest fee made that owner over $1 million dollars in a heartbeat!

I believe many failing golf courses can come back. I can find out very quickly. Sure, many are also doomed. I call them 'boats that won't float'. I'm not a patronizer. I mean, why try crossing an ocean in a boat sure to sink? If your ship is doomed I'll tell you.

But, if I see a way to survive I am 100% confident in my analysis and advice. Not only that, but my approach is not all that hard to follow. Not rocket science. I use very simple and basic principles. I mean, if you can tie your own shoes we can accomplish success.

If you are a board member of a troubled golf club give me a call. You'll be amazed at how your situation is so prevalent - everywhere. In a short, in a free consultation I can enlighten you. If nothing else, you'll feel better knowing you've got lots (and lots) of company.

I am an expert with over 50-years experience in the golf business world.

Mike

  

Tuesday, April 2, 2013

I love this...

A good friend and a real classy country club manager, Allan Irwin, just announced his new position at Niagara Falls Country Club/Youngstown Yacht Club. What a perfect match.

Allan and I go back to about 1990 when we were contemplating which direction we would go in the golf business. He came up on a vastly different track than I did. Allan has the polish and skill to manage high-end country cubs, while I came up from the down-and-dirty daily fee golf world. However, it was amazing that we had then, and still have the same fundamental approach to golf as a business today, which says, "At the end of the day the balance sheet rules - period!"

Allan stuck to his country club route with a long stint with Toll Brothers, Inc. as Vice President of Country Club Operations.

Congratulations to Allan Irwin and good fortune for Niagara Falls Country Club.

Mike
I'm gonna brag a bit here...

I just received a real nice testimonial from Brian Crawford, PGA Professional and an owner of a golf club in Missouri:

"I have known Mike Kahn for years and his experience and wisdom of the entire golf industry is legendary. I am the head golf pro and an owner of a golf course and country club in Mo. I have been in the industry for many years and know enough to always seek good advice. It's crucial in any business to have people you trust and respect. To this day I still pick his brain for advice and ideas. Before you make a move in this ever changing world of golf I strongly suggest you contact Mike. Reach out and spend just a little time with Mike and it can save you big in the future. "

I love to answer inquiries from anyone, anywhere in the golf world. I hear from students, golf course owners, appraisers, persons aspiring to own a golf course, brokers and even attorneys. I always reply with my advice or comments.

Try me anytime: 941-739-3990, email: mike@golfmak.com, Skype: GOLFMAK. 

Mike

Monday, April 1, 2013

April 1, 2013: Application for a Golf Course Bank Loan

Last week, as consultant for a golf course buyer, I attended a loan application meeting with the bank loan officer, the bank branch manager, the golf course buyer and borrower and an attorney. The golf course buyer was under a purchase and sale contract to buy the golf course and was seeking bank financing for a portion of the purchase. Earlier, I visited and reviewed the subject golf course, its marketplace, and reviewed three years of financial statements.

There was one very impressive aspect of the golf course property that I knew would impress the banker: It is a 'some-day' valuable piece of land.

However, in the world of banking the same holds true today as it has for 100-years: The banker looks at the ability to repay the loan, which must be clearly demonstrated in the recent financial history of the course. Unfortunately, the financial history was not impressive enough to qualify for a head-office-approved loan - for which I was not surprised.

It was an interesting meeting, because the loan officer and the branch manager knew the property and really wanted to approve the loan. That's because the land under the golf course still retained most of its property rights. That fact is typical of a golf course built forty or more years ago. Therefore, future value of the land could be anywhere from $10 to $20 million, more than adequate to support a $1 million dollar mortgage. Nonetheless, the ability of the borrower to make loan payments today could not be demonstrated, so the borrower was advised the bank could not process the loan request.

So, how can one finance a golf course with a bank?

Conventionally, the business must show the banker it can meet debt service based on the most recent financial history - usually the trailing 36-months of income less expenses.

But wait! Some loan officers can make loans of under $1 million without going to head office for approval. However, it will likely be a loan of 50% or less loan to value (LTV). If a convincing business plan can show the loan officer the true potential and performance of the business will meet debt service, a 50% loan might be approved. So, we continued...

Applying my expertise, plus exceptional field work by the borrower a presentation in power point was created. I believe the assumptions and forecasts are very attainable and could get a positive response from the bank. The presentation is in the final edit stages.

Stay posted. It will be an experience to achieve the first golf course bank loan I have seen in at least 8 years.

Mike

  
    
Monday, April 1, 2013

I am looking for a golf course for an investor in Maryland. He will look anywhere in the USA - preferring the eastern side. He has a down payment and will need seller financing.

The ideal golf course for this person will be 18-holes, clubhouse, but not a monster. Public or semi-private, making at least some money - enough to cover the seller's mortgage and make a reasonable profit. This person will be an n site owner-operator.

Send me an email (mike@golfmak.com) if you have a golf course available that might fit. I am his consultant and buyer-broker.

Mike

Sunday, March 31, 2013

Hi...

Well... I just joined the Golf Course Business Consultants (GCBC) a group of highly specialized experts in the golf industry. I am in the company of well established gurus like Jack Brennan. Paladin Golf Marketing, Ron Garl, leading golf course architect, and John Johnson of J2 Marketing. Check out the GCBC site at: http://gcbcinc.com/.

Man! We're watching so many sinking ships out there. In desperation I see what were once high end private country clubs with tee times on all the re-seller sites. Some have hired management companies to market tee times competing with traditional daily fee golf courses. I'm seeing $100.00 rounds going for $39.00 in the Sarasota - Bradenton (Florida) market. One course is advertising $19.00 rounds that were $65.000 ten years ago.

Where are we going from here? I mean, expenses have not really gone down - except cutting corners.

More later.