Strategic modeling capital planning.pngWhat is Capital Strategies Modeling?

Many clubs struggle to develop a viable funding strategy that will cover both asset replacements over time and future improvement projects. The Club Benchmarking Capital Strategies Modeling (CSM) Solution is a natural complement to the Capital Reserve Studies Solution and a logical next step in any club’s long-term planning process.

Our proprietary process and platform help club leaders proactively plan for ongoing capital requirements and identify strategies for achieving aspirational goals to ensure the club’s financial health and vitality well into the future. The Capital Strategies Modeling (CSM) Report provides powerful visualization of gaps between capital needs and resources and allows club leaders to analyze and select from various scenarios to close the gaps.

Jack Grehan, General Manager -  Meadow Club, Fairfax, CA
“I have been working with our Finance Committee and Board on solutions to create a long term capital funding strategy. Following a major renovation of our facilities, we are nearing completion of paying off our bank financing of the project, and our goal is to ensure sufficient funding for depreciation of our current capital assets as well as future improvements over the next 10 years. We partnered with Club Benchmarking and used Capital Strategies Modeling to provide our board and membership a clear picture of our capital needs and current funding levels under various scenarios we wanted to consider. The CSM platform gave our Club clear and realistic options on how to fund those needs over the next 10 years and the process and options were clearly presented in a way that our membership could understand and support.”

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The Club Benchmarking Process

1) The Capital Reserve Study
The Capital Reserve Study is a critical first step in determining the amount of capital required to replace your current assets. A typical golf club has between 400-600 capital assets which will require replacement at some point. The reserve study will identify and prioritize those items and associated costs so you can plan appropriately. If you already have a Capital Reserve Study, our team will review it to determine whether it can be incorporated into your model. If you do not have a Capital Reserve Study, our team of CRS Specialists can develop one for you to ensure the strongest possible foundation for your Capital Strategies Model. Learn more about Capital Reserve Studies powered by Club Benchmarking

2) Determining Future Capital Needs
Club Benchmarking will work with your club to identify, prioritize and allocate funds for capital improvement projects which the club would like to complete over the next 10 years. If no specific projects are identified, a mutually agreeable capital improvement fund will be established to minimize the need for future assessments and debt.

3) Project Capital Revenues Over the Next 10 Years
Using our powerful modeling platform, Club Benchmarking will determine your current 10-year capital revenue trajectory by identifying capital revenues from (1) Operating Net, (2) Net Initiation Fees, (3) Capital Dues, and (4) Membership Growth.  We will factor in any other items which affect capital cash such as beginning balances, debt service and assessments receivable to determine your 10-year trajectory.

4) Identify and Address the Gap Between Capital Requirements & Available Funds
With 10 years’ worth of capital asset replacements and improvement projects known, we identify the capital needs of the Club over the next decade, and the gap between requirements and available capital cash. We work with the Club to develop strategies in the areas of Operating Net, Net Initiation Fees, Capital Dues and Membership Growth to adequately fund capital requirements. We conduct a peer club benchmark analysis of your Club’s capital funding methods to determine your biggest opportunities for additional capital funds and will make recommendations based on these findings. Strategies for Membership Assessments and Debt may be used cautiously if needed.

Your Capital Strategies Report

The first step in the process, the Capital Reserve Study, answers the question “WHAT will we need, and when?” Capital Strategies Modeling moves the planning process forward by addressing the obvious next question… “HOW are we going to meet that need?” Club Benchmarking partners with your club to develop a clearly articulated plan with strategies appropriate for your club’s culture, member expectations and local market.

The CSM report delivered at the completion of your project will provide a clear game-plan for funding asset replacement identified through the Capital Reserve Study, as well as funding aspirational capital for future projects and the club’s capital reserve account.

Your CSM Report Includes:

  • Net Worth Benchmark Report
  • Sensitivity Analysis of Capital Inputs and Outputs
  • Three to Four Funding Strategies Presented in Graphic Format
  • Dynamic 10-year Capital Forecasting Tool

Benefits to Your Club:

  • Identify capital funding requirements to replace current assets and fund future improvement projects
  • Calculate capital revenues based on current dues & fees structure and membership growth trendline
  • Identify gaps between required capital funds and projected revenues
  • Develop strategies to ensure alignment of capital expenses and revenues over time.
  • Arm club leaders with dynamic capital forecasting to guide long-range financial strategy

Questions About CSM?

Contact Club Benchmarking
Phone: 617-830-2570

Request a CSM Proposal