Golf clubs operate in an increasingly complex environment, where financial sustainability, member expectations, governance standards and long-term asset management must all align. This was the central theme of the recent Strategic Business & Capital Planning webinar delivered by Club Benchmarking EMEA in partnership with Golf Accountancy Matters. The session provided a powerful, data-driven framework for understanding how clubs can move from reactive decision-making to structured, forward-looking financial leadership.
From Firefighting to Data-Driven Leadership
The presentation opened by addressing a reality many club leaders recognise – management teams often operate in “firefighting mode”, dealing with daily operational pressures across golf, hospitality, accommodation and staffing. While these challenges will always exist, the webinar reinforced that true leadership requires mastering the club’s financial and business model and being able to communicate that clearly to boards and members.
Clubs, it was stressed, do not compete on price – they compete on experience. This shifts the mindset away from short-term cost-cutting and towards long-term investment in facilities, amenities and service quality.
Operational Governance vs Strategic Governance
A major focus of the session was the distinction between operational governance and strategic governance:
- Operational governance is dominated by monthly profit and loss reviews, cost control debates and reactive responses to complaints.
- Strategic governance, by contrast, looks forward, focusing on long-term member experience, capital investment, asset condition and financial resilience.
Best practice clubs spend at least 90% of their governance time on strategic matters, using the income statement as a tool to drive the future experience rather than simply analyse the past.
Understanding What Business Clubs Are Really In
The webinar reinforced several essential truths about the club business model:
- Clubs are capital-intensive, high fixed-cost businesses.
- Operating income exists to deliver the member experience.
- Capital income exists to reinvest in, refresh and evolve that experience.
- Every generation of members has a responsibility to leave the club in equal or better condition than they inherited.
Members were also encouraged to think like owners rather than customers, recognising their role in sustaining the club’s long-term value.
The Growing Gap Between Successful and Struggling Clubs
Using benchmarking insight, the presentation illustrated four broad club performance profiles, from shrinking and stagnant clubs to dynamic, purpose-driven clubs growing above inflation.
Key differentiators of thriving clubs include:
- A strong and growing balance sheet
- Fresh, well-maintained assets
- Adequate cash reserves
- Full or near-full membership
- A governance culture focused on future value
- Competition based on experience, not price
Capital Planning: The Weakest Link in Most Clubs
One of the most striking messages of the webinar was that capital planning is the weakest financial discipline in most clubs.
Common problems include:
- Poor or inaccurate fixed asset registers
- Assets still in use but fully depreciated
- Large renovation projects grouped together rather than broken into components
- No clear understanding of when assets truly need replacing
- Capital budgets built through annual negotiation rather than long-term planning
The result is deferred maintenance, flat or declining net worth, reactive member levies, and increasing reliance on debt.
Obligatory vs Aspirational Capital
A critical distinction was made between:
Obligatory Capital
- Covers repair and replacement of existing assets
- Should be funded through recurring capital levies
- Requires a minimum 3.5% annual net worth growth simply to stand still in real terms
Aspirational Capital
- Funds growth projects such as new amenities, clubhouse expansions and enhanced facilities
- Should be funded through entrance fees, one-off levies and well-structured debt
- Must demonstrate return on investment through increased capital income
The session highlighted the danger of using debt for obligatory capital, which traps clubs in a cycle of paying off loans while their assets continue to age.
The Balance Sheet: The True Measure of Club Health
The webinar emphasised that a club’s balance sheet tells the real financial story. Most club wealth is concentrated in just two areas:
- Property, Plant & Equipment
- Net to Gross PPE ratio provides one of the most accurate indicators of the physical condition of club assets. Ratios above industry medians reflect fresh, well-invested facilities, while lower ratios indicate aging infrastructure and deferred investment.
Capital Reserve Studies & 10-Year Planning
A properly executed Capital Reserve Study (CRS) was described as the foundation of all responsible capital planning. This consists of:
- A full inventory of all physical assets over £3,000
- An objective assessment of useful life and replacement timing
- Current and future replacement cost modelling
When supported by a fully funded 10-year capital plan, clubs gain:
- Predictability instead of financial shocks
- Strategic clarity
- Stable member funding
- No surprise assessments
- Assets that remain consistently fresh and fit for purpose
The Key Takeaway for Club Leaders
The concluding message of the session was clear and uncompromising:
The single most important driver of long-term club sustainability is a comprehensive, forward-looking, fully funded capital plan.
Clubs must ensure that:
- Obligatory capital is always covered
- Aspirational growth is planned, not reactive
- Deferred maintenance is eliminated
- Each generation of members pays its fair share
- Debt is used strategically, not as a substitute for discipline
Leave a Reply