By Marc Gelbke
USGTF Member and Contributing Writer
Any manager of a facility who is familiar with its overall performance-based budget knows that a big part of expenses, if not the biggest part, comes from maintaining the golf course on an annual basis. So, it is only wise to be very familiar with, and to be part of, establishing your annual maintenance budget, along with your superintendent and committees, if present.
As the overall economy continues to be challenging for golf course owners, a different approach to establishing your budget may be warranted. A very effective way to study costs is to develop a “zero” budget so that each line item has to be justified. This may be a far better approach than the traditional approach of applying inflation adjustments to your budget items year after year, as the “zero” budget will provide you with a justifiable course budget based on real costs for the year, and there by providing the possibility of saving on expenses and increasing your net operating income.
The approach to this budget concept is to establish written standards of your annual maintenance goals, and should be explained in detail of the how, why, and who, so that a “zero”budget can be put together successfully. Your superintendent and/or greens committee should be the ones to draft their goals and maintenance standards for the course and be reviewed and discussed with you, the manager. Once goals have been established and all parties involved are in agreement, the “zero” budget can begin to be put together,starting with all line items being zero. Labor and all predicted activities should begin the process. Include unpredictable occurrences, such as weather (being one of the biggest), that can have a significant impact on dollars needed to keep an acceptable standard for your course. Other items like labor, fertilizer needed and equipment needed, function cycles, as well as equipment maintenance, are relatively easy to forecast. Some distinct advantages of a“zero” budget are:
Efficient allocation of funds and resources based on needs, goals, and standards.
Challenges superintendent to look for cost-effective ways to improve operation.
Eliminates the “standard” inflation-based budgeting.
Involves staff and motivates by being involved in setting and monitoring set goals.
Improves communication between staff, committees, and manager.
Provides an “out of the box” and“refreshing” way of doing things and shows initiative.
Next time you are tasked with annual budgeting, think of “zero” budgeting.