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Insights from Bobby Jones Links

Lies, Damn Lies, and Statistics

Bobby Jones Links

A famous saying erroneously attributed to Mark Twain says there are three kinds of lies: lies, damn lies, and statistics.

There is truth in that. But, some statistics are worth noting - certain proven measurables and metrics that guide profitable and successful clubs. Of course, not every club is the same, yet the following help answer the question, “How is my club doing?”

⭐  Food and beverage should be making at least a 15% profit. That’s 40% for the cost of goods sold, 35% for labor, and 10% for other expenses. Bobby Jones Links makes money at over 90% of our club’s F&B operations. There are exceptions to this rule for very high-end private clubs where ala carte dining is frequent and high-end.  

⭐  The profit from special events such as weddings should be 40% or more.

⭐ The average green and cart fees per round (yield) for a daily fee club or resort should be 60% or greater of the highest rack rate. Any less, and you are discounting too much.

⭐  How much can you charge for a green fee? A good rule of thumb for profitability is .0001 for your total golf course maintenance budget. So, a $1 million budget means your rack rate should be around $100.

⭐  A club’s payroll should not exceed 50% of revenues.

⭐  Total benefits should be at most 25% of payroll cost.

⭐  The pro shop should be making at least a 30% profit.

⭐  Golf course maintenance expenses should be at most 60% of total revenue. Ideally, it is 45% or less.  

And what about overall profitability?

Again, not all clubs are the same, but a property’s EBITDA (earnings before interest, taxes, depreciation, and amortization) should be 15% to 25% of total revenue. Some very efficient and busy daily fee clubs make 30% or more.

This margin is extremely important for non-profit private clubs to fund capital improvements and repairs. For those clubs owned to make a profit, this margin is doubly important for the same capital reasons and for a return on equity.

There you have it. Let’s not call them statistics but key metrics and heuristics.

So, how’s your club doing?

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