Following on from Derek’s communication last week regarding the upcoming AGM, I thought it would be useful to explain the strategy and process which the Club follows in preparation of the annual budget and proposed membership subscription rates.
Newbury & Crookham is your Golf Club. It is a member’s owned club. Our aim as the Management Committee is to make your Golf Club the best it can be with a membership subscription rate that is both reasonable and competitive in the local market.
To that end from a financial perspective, we aim to break even from both a profit and loss and cash flow perspective. Each year our budget is prepared with that in mind. Each line of income and expenditure is considered in detail. We start with essential and unavoidable costs looking for savings where possible whilst dealing with the many external factors that we can’t control like inflation, rising energy costs, rises in minimum wages and national insurance, business rates and other regulatory factors like health and safety legislation. We then consider the areas for potential investment, for example, course improvements, staffing levels, club house fixtures, furnishings and technology improvements etc.
Once we have assessed both necessary and discretionary spend, we review the various sources of income such as bar sales, visitor fees, society income, rental profits etc. As a member’s club our approach to income generation is deliberately measured. We do not seek to maximise revenue at the expense of the member experience. For example, society bookings are restricted to protect key playing times particularly on Fridays and seeking to limit the impact on regular roll up groups. After all that is assessed the likely necessary subscription rate is modelled based on factors such as expected attrition rates, membership demographics, waiting list and enquiries. We then benchmark and sense check that amount against local similar member’s clubs before the Finance Committee makes its recommendations on both the budget and the annual membership fees to the Management Committee.
As each financial year progresses, we monitor financial results each month against the original budget. During a year we often have to fund urgent and necessary unexpected costs. In the last few months, we required urgent safety work in the clubhouse, a new water pump for the irrigation system and new grinding machines for the workshop. As the year progresses, and taking that into account, if we have a surplus against budget, we look at what other projects we can support. If we have a deficit we will look to delay or cancel projects.
As a member’s owned organisation, we do not seek to make a profit as we would if we were a normal commercial enterprise. Not least because we would then have to pay more tax!
Members can see the impact of this approach with the recent extensive course improvements, modern course machinery, new clubhouse furniture and technology improvements including the switch to Intelligent Golf etc. Once the necessary work on the club house has been completed it will be necessary during the budget process to put money aside each year to build a fund for future necessary capital expenditure on our course and facilities.
If members have any questions about our approach to finance, please do contact me and I will be happy to explain things in more detail.
David Ashworth
Acting Treasurer