Mr Business Golf

No, I am not talking about Fred Couple’s former sponsor..Cadillac.  I am talking about what could be the answer to golf’s Slow Pace of Play..the Caddy.

PROBLEM

OK, here is the problem with golf that is getting out of hand.  Golf is going to die a slow death if the slow pace of play is not addressed.  Golf facilities are not going to survive unless they bring the green fees down.  To do this they need to be able to put more golfers on the golf courses which starts the slow pace of play.  So, how will golf survive?

ANSWER

Bring back the Caddy for each player.  I know, I am not the first person to rethink the use of caddies.  So I am not taking credit for my thoughts being an epiphany.  However, I do think with the millions of people laid off including many golf course employees it would put a large number of people to work, even if it is a minimum wage environment..at least it will be someone who works for the golf course in the group to keep the players focused on play and not shagging up every ball they can find in the creeks along the fairways.

NOT A POPULAR IDEA..DUH

I am aware that the golf cart industry does not like this idea of caddies since it would do away with Cart Rental Fees, but at least they have an alternative to providing another product to the market like battery powered cars, farm tractors or golf carts for small town communities to use.

Golf Courses brought on the golf carts to control costs and bring down the amount of funds they had to spend to employee benefits plans. As I can agree that the pleasure of riding in a golf cart out to my golf ball sitting pristinely in the middle of the fairway does have some pleasure to it, but it didn’t help the other three guys (or gals) in my group who headed off to the out  of bounds markers looking for their balls since they felt they should of used a driver instead of laying up like I did.

If there had been caddies involved with this situation more than likely all of my group would be heading down the middle of the fairway since the caddies would have made them put the drivers back in the bag.

A duty of a good caddy often overlooked is the ability to keep their golfer focused and not waver psychologically from the task at hand. This is clearly the toughest of all caddy skills to learn and it requires a great deal of experience and understanding of the game of golf. A caddy that can positively impact the psyche of their golfer, especially if the golfer is not consciously aware of what the caddy is trying to do, can be extremely valuable. Golf arguably relies on mental aspects of the body more than any other sport in today’s world and if the mind is not comfortable, calm, and focused, disaster is likely to occur. A crucial factor in performing the psychological duties of a caddy is that to be as effective as possible, the caddy must know the golfer very well. This is typically only possible if the caddy is on the pro tour, a family member/friend, or works regularly for the same member at a country club. Psychological caddying can be as simple as distracting the golfer as you walk down the fairway after a poor tee shot by talking about something the caddy knows will make the golfer be happy or laugh. While this may sound superficial, it can have an amazing effect on the mental state of the golfer as they enter into their next swing. The caddy might also try talking out exactly how the golfer wants to hit the next shot because positive visualization can be the difference between a birdie and a bogey.

GOLF is going to have to take a few steps back in order to survive this struggling economy.  I would be interested in hearing what you have to say and what solutions you could offer GOLF.

I would like to see this year is the Golf Industry finally make “The Change”.  Since 2004 when I broke loose from the bounds of corporate America and hit the ground running to shore up the leaks in the best game/sport/activity every invented, I have learned a lot about the golf industry.

There are several things in the golf industry that need to change if it is to survive as an leisure and business activity.  Matter of fact I have made a list of the areas that really need to take a hard look at reality.  Here are just a few on my list I will bring up for discussion today:

• Golf Resorts
• Country Clubs
• Golf Equipment Manufacturers

On the most part, the first two industries hit Business Golfers squarely in the pocket book which is located rather close to the groan.  The last one, Golf Equipment, hit all golfers and controls a lot of the golf economy.  Each of these icons of GNP (Golf National Product) will HAVE to change if they plan on being around more than a few more months.

What I find interesting when I talk to many of the executives of the golf businesses who are in these at risk categories in the golf industry is their ‘denial’ that the economy is affecting their business.  Naturally, these leaders of their business are not going to let their guard down to the image they want to keep in the eyes of their employees and investors.  However, there is not hiding from the fact that golf has become a ‘four-letter-word’ in the mainstream of the business world.  To change that impression, a more open approach to what is really going on in the golf industry needs to be made.  This is part of what needs to be changed.

Let me breakdown my thoughts on how each of these businesses will need to change.

Golf Resorts

It is no surprise that the cost of travel is over the top too high.  Golf Resorts depend almost entirely on out of town golfers.  When business and leisure travel costs get out of hand it is going to be simple for businesses and consumers to make the natural decision to not travel.  I hear many of my clients tell me..

When I add the increases the airlines have made on a flight to Phoenix with the day rate for a room at a golf resort in Scottsdale I could have bought all my employees new drivers or paid for each of their country club’s monthly membership dues.

So, naturally, the golf resorts are going to have to pare down their prices and come up with other forms of cost effective programs to lure in the recreational, vacation and business golfers.  If not, we could see a few of very good golf resorts become ghost towns.

Country Clubs

Country Clubs, private and Semi-private, base their entire operation budget on membership fees and dues.  The ol supply and demand principle most country clubs have rode on for the past five years has finally been worn out.  The saturation of clubs and golf courses set up to exploit the Real Estate opportunities has been a known factor from the beginning.  Unfortunately, the large investments many investment groups have made to get into that market has turned into a money pit.

The homeowners who are members of the club are going to ask questions like..

What happens to my property value if the club stops maintaining the golf course.  What will the private course look like if the owners of the club decide to sell the course to a Municipality?

Again, this part of the golf economy will have to make huge changes in several directions.  First the private and semi-private country clubs are going to have to think ‘Members First’ instead of ‘Member’s Money First’.  Raising fees and membership dues to match inflation will flat out Not Work.  Matter of fact, those that go this route will see at least a 60% drop in membership immediately.  Even the few members who are ‘Recession Proof’ will turn in their membership cards in on the simply principle that the direction the club has taken is wrong.

If the change is not made we could see a lot of our favorite private and semi-private clubs be bulldozed to make way for public housing.

Golf Equipment Manufacturers

OH, the change in this part of the golf industry has been needed for a long time and I am surprised the ‘900 pound gorilla’ golf equipment industry has not failed earlier than now.   The golfing consumer has been saying for sometime now..

WTF do I need a New Driver for? The one I bought last month to replace the one I bought at the first of the year looks like the one I bought five years ago. And hits just like the one I bought when I was a Junior Golfer.

The golf apparel, clubs, bags, balls, shoes and accessories businesses are going to be the most bruised part of the golf industry.  The direction they will have to take will be an across the board overhaul of their business plans.

Bottomline:

There is one common denominator that ties all of the woe’s of these three sections of the golf economy together is..Top Heavy Payroll.

Like most business operations budgets, executive payroll and investor ROI take up a large percentage of the gross revenue generated.  Unfortunately, what these executives and investors do not generate much of anything in the Revenue column of the CFO’s balance sheet.

The golf industry is not immune from the over paid CEO’s or the demanding investors ROI.  Since I am a CEO and Investor in the golf industry, me saying this is like turning the gun on myself.  However, that is exactly what the hundreds of executives and even more investors groups who are part of the golf economy will need to do.

I am not saying the executives and investors should not get paid.  I am saying that maybe they need to do like the rest of the world’s economy and base their salaries and return on investment on the amount of revenue they ACTUALLY generate..not what their company’s generated.  Let them get paid from what they actually went out on the streets and sold to the golf community.

Unfortunately, in order for ‘Golf’ to survive there will be many executives and just as many investor groups who will have to walk away from their positions and all the funds they invested.  Yes, that is going to be a tough nut to swallow, but I am sure you can agree that that was the risk they took when they saddled up for the race to wealth in the golf industry.

The solutions to the entire world’s economy will come from making unusual changes in the way business is done. The solution to the golf industry’s sagging economy will be some of the same changes and a few more drastic immediate actions to the way it does business if it is to survive.

I am sure you have a few solutions to offer.  I hope that you will join in here to bring forward what you feel will help keep golf going for the next generation.

Let me know how I can help.

For many today’s weekend golfers the affordability of a round of golf has gone way beyond being a considered a ‘discretionary expense’.  However, for business golfers, golf should be a budgetary consideration.

I am not talking about just plan old Golf where a business person takes a client or potential client out for a round of golf in hopes a business relationship will develop out of impressing the client on how much money is spent on them.  No, I am talking about business golf which is a purposeful round of golf where the golf is golf and the business is after the golf.

Sure, where you play the round of business golf is important.  Professional imagery is an important part of the first impression with a potential client.  Not only does how the individual looks play a part in the first impression but so the venue of where the golf is played.  Still, this does not mean that you need to book a round of golf at the most expensive golf club in town just to look professional.  A business golf outing can be done at a modestly priced golf club.  It is the way you go about playing business golf that produces the business.

I hear from people telling me that they are going to have to stop playing golf as part of their business development.  When I drill down into the true reason for dismissing a viable business tool I find on the most part they are going about using golf as a sales tool instead of a business tool, or educational tool.  Many of the people nixing golf are mistakenly using a high pressured sales pitch during a round of golf.  This method of developing business is a kiss of death to improving sales no matter who you are or what you are selling.

There are a number of things a business golfer can do to shore up their covenant budgeted discretionary funds. Educational opportunities are the most productive activities to develop business while improving the way business is done.

I will be back soon to outline a list of those activities I have found to work toward enhancing revenue horizons while not causing trauma to the bottomline.

Amongst all of the ways business is developed, Golf is STILL the BEST VALUE.

I attend business networking events all over the country and have stacks of business cards of people I have made contact as a result.  I am also a member of over 20 online social and business networking groups.  None of these events or web-sites develop business for any of my companies like a round of business golf.

Statistically, one out of 100 contacts I make at offline business gathers ever returns my follow up calls and emails, only three out of 50 business contacts I make online respond to social media efforts.  On the other hand, 4 out of five people I play golf with not only do business directly with me, but also refer business to me.

If I looked at the costs associated with the time I spend at other offline and online business networking functions compared to the cost of green fees and other golf associated expenses, I get a an approximate 400% better return on my investment with business golf than I do from other forms of business networking.

Just image if people who do get a moderate return on their time spent at offline business networking events would get if they combined that with business golf…I would say that would be an outstanding value.

Even in this rough economy, golf is still one of the best values in business development..that is if you know how to play business golf.

Let me know how I can help.

As I sit here waiting for the sun to come up and dry off the roof I am shingling this morning, I had a few thoughts I felt I needed to write down about all that has gone on this year for my businesses that make me smile and frown.  I’ll get into a full scale write up of all the happens here in the world of IBGS later, but for now the overall look of this year was balanced with as many ups as there were downs.

The big picture for me since 2004 when I retired from the fury of hectic live in corporate America is to do what I can to help people through problems I have already solved and to have fun.  So far I don’t feel I have accomplished either one so I plan on keeping at it until I find the key that starts the engine of my entrepreneurial projects which are Innovative Business Golf Solutions and its new division, Why Not Remodel?.

Friends Are the Key to Success

I have met a lot of new friends this year and threw a few back into the cesspool of deception that seems to be a natural part of the internet.  From the relationships I have made with the GOOD friends I have new insight on old insights of business and now better understand how GOOD friends balance what BAD friends try to teardown.  Generally, I leave this year with a stronger relationship with the good friends I met at the beginning of my journey out here in la-la-land.

Bad Economy New Adventure

It is really good to have a financial advisor who is not part of the big boxes and who saw the failure of the economy coming at the first of this year.  His frugalness helped me from being one of the many people who lost all of their retirement funds.  This has allowed me to hang on to my entrepreneurial projects a little longer.  With that extra time I was able to do like YOU should do..move your business to a balance of offline and online endeavors.

New Year’s Advice

I have learned a lot about how the internet works and does not work..mostly from first hand experience, but also from the Good friends who understand the true value of what I have to offer the younger generation that hangs out on the internet.  With this new found learning I now can consult people who are just venturing through the pearly gates of the Internet and some of the salty veterans who have never worked outside the internet.  My advise to all on how to handle what is going to take place starting next year is pretty simple…

If you are totally just an online business your future will go with the Spammers and if you are totally offline you are going to dry up and blow away.

For total interneters, Get serious with your efforts online, show your true self, show your true face, stake out your own space which means don’t rely on setting up your home base on Facebook, and start letting people learn who YOU are, not just what you are selling.

For the total Offliners (who are just getting here online since you are reading this), don’t open up with a full salvo of hard sales tactics…start off with building a community of people who would be part of your market.

For both: Learn something new to do..EXAMPLE: if you are a social media expert..take up golf or some other totally offline activity.  If you are a golfer, (or in some totally offline endeavor) take a class in WordPress and learn how to effectively blog….better yet, you social media experts could teach the golfers the ropes and the golfers teach the SM’s how to use golf as a form of social media offline.

See how it is going to work…think about what you are going to need to do to survive the next eight years.  Let me know how I can help.

I was watching the news last evening and they showed an animated tutorial on how Deflation is not good for the economy.   I think it was a little incomplete.

Deflation in economics is a persistent decrease in the general price level of goods and services

What deflation is based on is profit margins and the margins are calculated by subtracting from the products price operations costs which include raw material goods, employee benefits and wages.  What is left over is the profit margin.  It is true, that wages sometime make up for over 40% of the operations costs.

In the report last evening they did an excellent job in analogizing on what takes place when prices go down.  When businesses reduce prices a trend starts and the consumers will wait until the price for something comes down.  Once a business does this they reduce their profitability and that trickle down throughout an industry. Their Bottomline of the report was deflation causes workers hours to be cut or laid offs. That does not necessarily have to happen..there are other things that can be done to avoid frontline workers being laid off to keep the profit margins.

Golf industry will not be immune from deflation.  Matter of fact, golf will probably need to skip the deflation and go straight to permanent price reductions to stay alive in this economy.

However, there is one point that was not explained in the evening news report that makes a huge difference and should be the first place businesses need to look to reduce prices without effecting profit margins.  That is Executive Salaries and investors ROI’s.  Nothing was said during this report that any of executives salaried would be adjusted..all they said was that a business would have to lay off the workers to keep the profit margins the same.

Top Heavy salaries levels have been the biggest problem with operations budgets for years.  To battle inflations and make deflation permanent executives, business owners and Venture Capital investors are going to have to give.  I know this is not what they want to hear…nor is it what I would to mention, but it is true.

If you took the Deflation picture the evening news painted last evening and applied it to Golf the solution to keeping a golf course profitable would be to lay off the maintenance workers or PGA professional in the golf shop.  This is the worst thing a golf course could do.

When a golf course cuts at the bottom run of the workforce to make ends meet it puts out two messages to the consumers who are golfers.  The first thing the golfers see when they arrive is less service.  And then because the people they interact with just had their hours cut or are having to work longer hours due to there not being enough people to get the job done will develop into a bad attitude which will come across loud and clear to the golfer.

Then the golfers will start asking…

Is what I am provided here worth the money I am paying?

That brings on the second thing that will happen…word of mouth networking.  The offline golfer network is 10 times stronger than any Online Golf site on getting the negative message out about a golf course charging more than it is worth.

Customer service is what gets hurt when a business decides to cut the frontline workforce.  Deflation will be good for the golf economy only if the operations budget is cut at the right place…near the top.

Holiday Gift Special

For most golfers winter time is when the golf clubs get put in storage and they get their golf fix from watching reruns of the PGA Championship on the golf channels.  The winter time also brings in the gift giving Holiday season.  For the business golfer it is time to thank the clients and customers for supporting their business all year.

For that, I have the perfect gift….my book..How to Play Business Golf - Revisited.

This is the perfect gift to give to all of those golfing partners you have had during the year.  It is full of great tips on how to exactly go about using golf as a business tool.

To make this gift even special, I am offering  my Holiday discounts.  The sale is only until December 16th.

CHECK OUT THE TABLE OF CONTENT FOR MY BOOK

(CLICK HERE)

GREAT HOLIDAY OFFER

For the Holiday season I am offering a HUGE discount on the price for those business golfers who order more than 6 copies of the book.  From now to December 16th, I will offer the following packages:

“The Sleeve”

3 - Softback copies $60* (33% Discount)

“The Six Pack”

6- Softback copies   $100* (40% Discount)

“The Case”

12 - Softback copies  $180* (50% Discount)

Or order as many over 12 copies as you would like for 50% off the retail price.  This is a one time offer good until December 15th so they can get to you before Christmas.  Email me with Special Holiday Offer Code ‘BGCC’ in the Subject Line and the number of softcopies you would like and I will get right back to you.

BUT, hurry, the supply of Softbacks at this price are very limited.  For bulk orders of over 300 copies contract me directly for further bulk pricing.  Deadline for order this special offer is Dec 16th.

(* + any tax,packing and shipping fees)

Happy Holidays

“Mr Business Golf”

Scot Duke

I had to read the following ‘blip’ of an article in the NGF Newsletter twice to make sure I understood what Jim Koppenhaver was saying.  Raise Green fees to become more profitable???    Geesh, does he want to kill golf all together?

PRICE INCREASES:
COMING TO A COURSE NEAR YOU IN 2009

A prospective client called out of the blue a couple weeks back and opened the conversation with, "I understand you’re advising all your clients in Chicago to take a price increase in 2009?" I took a step backwards and, after exchanging some personal information, their particular situation and the context of advice I’ve given to clients recently on pricing in 2009, we had a serious discussion regarding the basics of profitability as it relates to revenue vs. expenses and debt servicing. His perspective was that it would be suicidal in today’s continuing supply-rich environment while I argued that you can’t choose to continue losing money in hopes of chasing higher rounds annually that don’t materialize.

This back-and-forth battle being waged in many markets across the country will become, in my opinion, a defining issue in 2009 as it relates to the financial health of many individual facilities and the overall markets in which they operate. While not true for all markets, there are a number in which the pricing leaders have to consider creating a potential decline in rounds for the benefit of higher gross revenue and profits. In this issue we’ll take a cursory look at the growing importance of understanding price elasticity and competitive pricing dynamics:

1. We’re at this business juncture primarily due to our collective inability to grow rounds demand, therefore it becomes a share game or managing profitability in a flat demand environment
2. Our "essential expenses" have been escalating and we’ve been trying to operate more efficiently to offset them but we’ve run out of runway on that front
3. Discounting continues, either offsetting or in excess of our rate card increases which has negated any revenue upside (encouragingly, it appears that increasingly consumers shifting play patterns are a contributing factor vs. firesale specials)
4. The key question is, "What is the price elasticity for my facility in this local market based on history?" (i.e. increasing price 5% to take an 8% reduction in rounds doesn’t increase revenue)

Back to my prospective client conversation, I told him that we were, in several recent engagements, strongly recommending that our clients consider "real" price increases for the 2009 golf season. For them, it’s a simple matter of economics that they will lose money in 2008 at EBITDA (operating revenue less debt service primarily) and, barring a federal government bailout or a rich, patient (stupid) investor, some combination of pricing action and continued refinement of expense control are necessary to balance the books in 2009. It’s going to be a tough juggling act but, in many situations, I don’t see how intelligent operators can avoid pricing in 2009….

I understood Jim’s thinking on ‘revenue vs. expenses and debt servicing’.  In a normal business environment or in another industry this could be sound advice, but not in an industry that is primary based on consumer’s discretionary funds. Many golf courses are up to their Flag Sticks in real high interest debts for mostly the development of the golf course to service real estate sales around the golf course. To me, they asked for it, so why should the golfers of the world be asked to bail them out.

I know there has to be something I am missing in Jim’s article since it blows me (and probably 28 million other golfers) away to think raising green fees to increase profitability for secondary debit in a recession.   That is insane.

Have you heard the new Golf Lingo people are using on the golf course.  In case you are needing a translation of what they are talking about here is the glossary:

Some new lingo to use when you’re out there spanking whitey.

• A ‘Rock Hudson’ - a putt that looked straight, but wasn’t
• A ‘Saddam Hussein’ - from one bunker into another
• A ‘Yasser Arafat’ - butt ugly and in the sand
• A ‘John Kennedy Jr..’ - didn’t quite make it over the water
• A ‘Rodney King’ - over-clubbed
• An ‘O.J.’- got away with one
• A ‘Princess Grace’ - should have used a driver
• A ‘Princess Di’ - shouldn’t have used the driver
• A ‘Condom’ - safe, but didn’t feel quite right
• A ‘Brazilian’ - shaved the hole
• A ‘Rush Limbaugh’ - way to the right and out of bounds
• A ‘Nancy Pelosi’ - Way to the left and out of bounds
• A ‘James Joyce’ - a putt that’s impossible to read
• A ‘Ted Kennedy’ - goes in the water and jumps out
• A ‘Sonny Bono’ - straight into the trees
• A ‘Mickey Mantle’ - a dead yan k