Understanding the difference and the relationship between Revenue and Available Cash (aka gross profit) is critical. The median club sees 60% of its operating revenue remain as Available Cash.
If you don't generate enough Available Cash (aka gross profit), you will run operating deficits and may find yourself dipping into capital to fund operations. This can mask the real issues and drain your capital funds.
You can't use F&B to cook your way out of a low member count. Dues revenue is the single most important driver in your club. If the real issue is low member count, stop beating on F&B results and focus your efforts on bringing in more members.
Capital income must be predictable and it has to be sufficient to meet the club's needs. A Capital Reserve Study is the best way to determine how much you need. Capital dues are one way to smooth out the inconsistent flow of initiation fees.
Is F&B an amenity or a profit center? Industry data confirms 75% of clubs subsidize F&B operations, so the answer seems pretty clear. Putting F&B in context means you'll waste less time debating it in board meetings.
For clubs with golf, there are only two factors that have any meaningful impact on operational cash: dues and golf operations. Having more people in the dining room on a Wednesday night may bring revenue, but does it produce available cash?
The framework of the private club business model stems from the proportional spending across these common functions. Analysis of industry data confirms that these proportions do not vary with the size or location of a club.
Dues revenue is a two cylinder engine—the number of members and the amount each member pays. Asking other clubs "what are your dues?" does not help a club understand how its own dues engine is performing.
Healthcare is a serious issue and you need more than just a good broker to help you balance affordability with providing a competitive package for your employees.