Capital Strategies Modeling

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What is Capital Strategies Modeling?

Many clubs struggle to develop a viable funding strategy that will address both asset replacements over time and  future improvement projects. The Club Benchmarking Capital Strategies Modeling (CSM) Solution helps 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 CSM is a natural complement to the Capital Reserve Studies Solution and a logical next step in the strategic planning process.

Your Capital Strategies Modeling (CSM) Report provides a powerful visualization of the gap between capital requirements and your existing resources and allows club leaders to analyze and select from various scenarios to close those gaps.

The CSM 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 identifies and prioritizes those items and their 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

2) Determining Future Capital Needs

Club Benchmarking will work with your club to identify, prioritize and allocate funds for capital improvement projects looking forward 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 flow such as beginning balances, debt service and assessments receivable to accurately define your 10-year trajectory.

4) Identify and Address the Funding Gap

Once we've established a clear picture of capital asset replacements and improvement projects over the next 10 years, we can identify 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 identify opportunities for generating additional capital funds and make recommendations based on these findings. Strategies for assessments and debt may be used cautiously if needed.

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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 clearly defined 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

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