Board of Directors Orientation

Welcome

Mr. Westerbeck

Confessions of a Club Manager

• Three Phases of Board Relations

-”An interruption to my work”

-”I will do their work”

-”We will work together”

Hilton Head Market• Competitive environment with hundreds of

restaurants and dozens of golf courses.• We not only compete with other clubs, we also

compete with high end daily fee courses and area restaurants and banquet facilities.

• Any way that our members spend their entertainment dollar is competition.

• The need to bring “Our A game”.

How Do We Compare?• Largest number of members

• Most diverse membership

• One of the largest clubhouses

• Full service country club

• Founded before many of the other clubs

How do we compareto other clubs?

• Location, location, location

• Our food and beverage operation has a lower subside then most clubs

• Why? Our members use and enjoy the club

Our employees are productive and professional

Sea Pines Country Club is a Business

• Nearly an $8,000,000 a year business– 6 million plus operations

– Payments to resort

– $400,000 Capital Replacement

• 85 employees in peak season• Assets---millions of dollars of real estate and

facilities and over a million dollars of equipment• The need for efficient and professional policies

and management of these resources

• A private club by definition is a luxury. It is not typically an environment where the goal is to save money. However, it is incumbent upon the committees, board and management team to be sure that it is not an environment where we waste money.

Sea Pines Country Clubis a Family

• Home away from home

• A home with a very diverse family

• Making the best decision for the entire family

• Balancing “business with family”

• It is very important to find board members who can find that balance

Demographics and Psychographics

• We are a collection of minorities

• Age

• Occupation

• Education and Travel

• EXPECTATIONS!

Diverse Ages

• Average age is approaching 70

• Profile of last 100 members very different than existing members

Dealing with Diversity – F and B

• Menus and events need to reflect the diversity of the membership

• Market for the month – not every event or every night will appeal to all members

• Over the course of the month offer something for nearly every group

• Plan for the current member and for the future member

Dealing with Diversity - Golf

• Degree of difficulty

• Access – red flags and no cart holes

• Walking

• Practice facility

• Only club vs. many clubs experience

• Continual improvement vs contain costs

The Role of the Board and Committees

What YOU bring to the Board of Directors

• Historical perspective

• Member perspective

• Outside perspective

• Business Management and Planning Experience

• A desire to maintain and improve the club

Impact of Age and Profession

• Generation

• Profession

Entrepreneur

Corporate

Doctor

Sales and Marketing

Accounting

Board Member Perspective

• Previous club experience

• Length of membership

• Other Board experience

• Constituency

Who will be talking to you….?

Are you here to represent a constituency,or to represent the entire membership?

5 Primary Functions For Every Board Member

1. Approve membership applications and resignations

2. Review and approve the annual capital and operating budget

3. Establish and review club policies and objectives

4. Serve as committee chair5. Hire the general manager

– Board Dynamics by Dick Kopplin, President Kopplin Search Incorporated

Responsibility Matrix

Activity/Decision Board GM Budget Approves Recommends and

provides inputCapital purchases Approves Prepares requestStaff evaluation Evaluates Evaluates others

only GM Daily operations No role Leads management

team to make decisions

– Board Dynamics by Dick Kopplin, President Kopplin Search Incorporated

The Board’s Role of Policy Making and Planning

• Shape the mission and the future

• Level of quality of services and facilities

• What services are to be offered, when and where they will be offered

• Final approval of Annual Budget needed to obtain desired quality

• Decides on capital spending and planning

Goals• Not just survival but success!• Strategic goals and tactical goals have been

developed. Need to be reexamined. • Membership goals

– Replenish and continue

• Capital goals– The timely repair and replacement of the

club’s assets

Overall Marketing Approach

• Focus and Contact every single new property owner• Stay in contact with non-member property owners• Multiple Membership Categories (financing available at

competitive rates – equity and non-equity)

• Summer Trial Membership• 30 Day Trial Membership Program• Mentor Program• Member Referral Program• New Neighbor/Trial Membership Postcards so current

Members can Welcome them• Educate members to resell membership with property

Multiple Membership Categories

• Equity Membership – residents and non residents who want full club privileges

• Junior Equity Membership – residents and non residents under 40 who want full club privileges (2003)

• Non-Resident Full Privilege (Non-Equity) – Non-residents spending <122 days a year in Sea Pines who want full privileges. Must become an Equity Member upon becoming a resident or in 10 years.

• Tennis (Non-Equity) – residents or non-residents who want full Tennis, dining, pool and fitness privileges plus 12 rounds of golf

• Under 50 Tennis (Non Equity) – resident and non-residents under 50 who want full tennis, dining, pool and fitness privileges (2005)

• Clubhouse (Non-Equity) – residents and non-residents who want full dining, pool and fitness privileges

Long Range Plan

Major Capital Projects

Golf Driving Range and Practice Area Improvements

Golf Course Upgrades

Blue Heron Pub Expansion

Fitness Center Expansion

Long Range Plan

Golf Driving Range and Practice Area Improvements

Scope of Project:Expand hitting area

Improve grass condition

Upgrade short-game practice area

Plan for Project Approval this Summer

All major capital projects will be submitted to

the membership for approval

Long Range Plan

Golf Course Upgrades

Survey Results: High Level of Satisfaction with

Club Course

Level of Difficulty OK for Most Members

Phased Improvement to Overall Golf ExperienceLandscaping, Tees, Course Aesthetics

Long Range Plan

Blue Heron Pub Expansion

Project Supported by 44% of Survey Respondees 64% Support of New Members

Project Plan:

1. Provide More Information About Alternatives

2. Show Return on Investment

3. Present Architectural Drawings

4. Provide Capital Required & Funding Method

5. Target for Approval in Early 2008

Long Range Plan

Fitness Center Expansion

Existing Project Supported By 29% of Survey Respondees48% Support of New Members

“Do Nothing” Option Not AcceptableLocker Rooms, Snack Bar, Lap Pool

Need for Stretching Area & More Aerobic Class Space

Present New Options: Target 2009 Approval

Resale List

• No longer have a vote

• We will have a resale for many years

• How to manage the list is much more viable then ending list

• Must find an alternate source of capital

• New equity membership revenue is committed to resale list

• “Committees are important because you cannot blame everything on your assistant”

• Author unknown club manager

Committees Provide Member Input

C o u ntry C lub S tru c tu re

C o m m itte esA d vise B o ard an d Te am

M a na g em en t Te am

B o a rd o f D ire c to rs

Committees are Advisory Groups

• Channel for member requests

• Provide ideas and expertise to General Manager and Management Team

• Develop details of policy for Board approval

• Committee membership can provide experience for potential board members

Board Member Role As Committee Chairman• Committee selection• Diversity• Meeting schedule• Goals for the year• Agenda out a week in advance• Meeting reminders• Minutes taken and submitted for board book• Informational items• Action Items!

General Manager Concept

• “The Buck Stops Here”

• Coordination of calendar and finances

• Helping everyone do a better job

• Management Team

• Committees

• Board of Directors

• Officers

Three Types of Manager/Board Relationships

• “We will tell the manager what to do.” – Day to Day Operations– Policy and Budget Issues– Primary focus is on short term problems and

solutions

The Second Type

• “We will protect the club from the manager”– Spirit of distrust– Great involvement in day to day issues– Chain of command– Limited input from manager on Policy and

Budget Issues

Third Type of Relationship

• “We will work with the Manager”– Limited involvement in day to day operations– Look to manager for input on budget and

policy issues– Make final budget and policy decisions– Focus on medium term and long term goals

Team Building

Paul Hattimer

GM/COO

Sue Metz

Business Mgr.

Linda Newsome

Dir. Membership

Jerry Vaughan

Clubhouse Mgr.

Max Johnson

Executive Chef

Tom Metzger

Golf Course Supt.

Ray Bragg

Golf Professional

Matt Wuller

Tennis Professional

Sharon McDonnell

Dir. Fitness

Annual Goals & Reviews, Mid-Year Reviews, Financial Accountability

Clubhouse Team

• Jerry Vaughan – Clubhouse Manager

• Robert Parody – Food and Beverage Director

• Diana Pillai – Director of Banquet Sales

• Bill Wilkins – Director of Maintenance

• Max Johnson – Executive Chef

The Country Club Budget

• Provide high quality products and services in a well maintained facility

• General Manager, Controller and Management Team prepare budget

• Committees provide input on budget• Finance Committee reviews/approves budget• Budget presented to the full Board for approval

Key Points About Club Revenue!

• Dues are the number one source of revenue

• Golf Carts and Guest Fees are second

• Ala carte Food and Beverage is a service that attracts and retains members

• Quality and satisfaction generates dues

Banquets and Club Events

• Higher gross profit margin

• Economies of scale – In food preparation– In service

• Less guess work, less waste– We know when they will be served – How many will be served – What will be served

Key Points About Club Expenses!

• Large fixed costs. So volume is important• Largest cost is payroll, over $2,500,000 a

year• Productivity – making the most of our

labor dollars• Sometimes we will underestimate “We are

not short on staff we are long on members.”

The Board Meeting• Getting things on the agenda • Is it something that should go to a

committee?• Contact General Manager 7-10 days prior

to meeting• If possible discuss with other Board

Members prior to meeting• Avoid recurring issues

A Quick and Productive Meeting

• Preparation and germane discussion

• Hidden Agendas

• Common mission and goals

• Will the decision attract and retain members?

• Confidentiality

• One hour of preparation

Major Country Club Cycles

• Different seasons, different challenges• Fiscal Year starts November 1• November, December still some golf income and banquet income• January, February time to plan and prepare. January 1-10 2006 Food

and Beverage Shutdown. Very limited income• March a time of transition. Profitability tied to banquets and good

weather. Annual Meeting• April, May, into June. Weddings, Guest Fees, high income months• June through Mid- August. Kids! Beach crowd. Good ala carte sales

but low banquet sales• Mid-August through September the slowest time of the year.

Hurricanes or threat of hurricanes impact profitability• October. A big month. Many members return. Most popular wedding

month. Usually a strong finish to the fiscal year.

The Financial Statement

• Balance Sheet• Cash Position/Inventories• Business Manager Summary Report• Dues are what we seek• Golf Income• Department Expenses and Your Committee• Food and Beverage• Parties and Profitability

Your Questions and Suggestions

• Did you find this helpful?

• What can be done to make it more helpful? For you? For future Board members?

• Next steps– Grounds Department Tour– Clubhouse tour

Closing Thoughts• “A politician thinks of the the next

election, a statesman thinks of the next generation.”

• Strategy vs. Tactics

• Board is crucial in establishing the long term identity and future of the club

Thank You For Volunteering!

Paul S. Hattimer, CCM

General Manager