CGAM has been successful in applying an owner’s perspective to assets on behalf of our clients. We deliver on the necessary sales, marketing strategy and planning and provide reasonable expectations on opportunities for improvement. However, we have been able to make significant improvements in financial performance by focusing on fixed costs and overhead. Focusing on these areas has direct impact on the value proposition of the golf experience and in most cases allows for improved real value through conditions and service with reduced operating expense. This reverse engineered approach allows for a greater instance of improved financial performance with less risk of failure as the sources of income have not been inflated to support increased operating and capital expense output. Some examples are offered below.
- Mike Bennett has served as the General Manager for several client clubs allowing the department heads to report directly to him after removing the General Manager position. This strategy has proven very effective for several reasons;
- Allowed for an immediate reduction in payroll without compromising service or standards.
- In many cases (3 x’s) the department heads were empowered to manage and there was a noticeable attitude change throughout the facility as these folks were allowed to be part of the decision making and setting the culture of the club.
- The opportunity to work directly with the department heads to evaluate their abilities, experiences, background and goals for the future.
- With the layer of the GM removed, weak department heads were exposed
- After unsuccessfully appealing Real Estate Taxes for a high end daily fee club we filed a law suit against the County, appeared in front of the Board of Equalization and won a reduction of 30% in valuation. This improved NOI and ultimately added value to the property when it was appraised next for the purpose of a sale.
- Lowered the merchant services processing costs by .5% for a portfolio of 20 golf courses which allowed for a savings of $20,000
- Restructured the property insurance to schedule all equipment with a value down to $2,500 rather than using a general blanket policy for equipment. It is always less expensive to schedule items than blanket them. We also worked with the same client to use co-insurance for building coverage.
- Instituted a Self Funded Health Insurance plan that allows the company to use loss reserves that are built up to buy down future premiums as opposed to letting an insurance underwriter keep the loss reserves. In this instance we purchased a stop loss policy to provide coverage against catastrophic claims. By using this the company was able to buy down over $100,000 in premiums which serves to lower employees contributions and reduce the employer’s contributions.
- Converted several assets to gas powered golf cart fleets and conditional sale contracts. This allowed for the owner to take non-cash depreciation expense and build up equity in the golf car fleet that they were able to liquidate by applying towards a new fleet after the financing term ended. The cars have a residual value of about $1,500 each which in several instances amounted to over $100,000. This was applied to a new lease and lowered the financing cost on the second fleet by $25,000 annually. In one instance this proved helpful in the sale of the asset as it improved cashflow by $25,000 and when appraised this was given a value of $200,000 more than if the lease payment had not been reduced.
- Worked with a Work Comp carrier to reclass one clients maintenance workers from “Lawn Care” to “Country Club Employees”. Because of the mod factor associated with “Lawn Care” compared to “Country Club Employee” the savings was several thousands of dollars annually.
- Provided a financial overview of the benefits in converting the greens at a facility to Ultra Dwarf Bermuda Grass. This included;
- Year 1 Bonus Depreciation Allowance of $50,000
- Reduced operating costs of $4,250 per acre annually from maintaining bentgrass
- Less down time due to closing for aerification
- Advised one client to simply use an alternative to the pre-emergent Ronstar called Barricade which is 60% less expensive. Barricade does have some drawbacks and caution should be used on weak Bermudagrass as it has a tillering effect, but in most cases this is a reasonable alternative to Ronstar or Spectacle.
Experienced in using warm season grass paints and pigments as an alternative to rye grass overseeding.