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Starting from scratch

For new club managers, you need to attack the first few years with a comprehensive plan of action.

By Rod Heckelman

If you’re a new manager at a new club, you are both lucky and challenged. Here’s your chance to mold the club into the facility of your dreams. At the same time, you could be saddled with quite an uphill battle. In this rapidly growing industry, clubs often are launched with hopes that the expansion of the industry will provide the momentum for success. Eventually the club may do well, but those beginning years can be a struggle that can make or break a new manager. You need to attack those first few years with a plan that will give you direction and purpose.

Where do you start? As the saying goes, it’s always best to start at the beginning, and the beginning of any club is the membership. This is the time to structure the membership to meet both the needs of the consumer and the club.

What types of memberships do you want to offer? This may be largely determined by your ability to monitor usage. You could have limited usage memberships based on which facilities the member may or may not use, or memberships based on the times they use the club. Being able to fill in the slow times at your facility with a discounted membership will require a system than can monitor usage. You can offer single and family memberships, and even scale the family membership based upon the number of people in that family. Corporate memberships are also an option, along with senior memberships. Again the types of membership you create depend on the market; just make sure that your contractual agreement with your members gives you this flexibility.

Fee Structure

Once you have structured choices for buyers, what are your initiation fees and dues going to be? Usually, the initiation fees are used as a negotiable number during sales and promotions. The dues are standard for everyone, and should be the income factor that can be adjusted down the road to meet increased overhead. Again, make sure that your contract with the members allows these future adjustments to take place.

Most facilities have non-transferable memberships. Transferable memberships are usually associated with member-owned clubs. Whatever type of membership you have, you will need a system to control the termination, selling or transferring of memberships. Study other clubs that are similar to how your club is structured and research what systems they use so that you can model after a successful program.

What’s most important is to establish early on an understanding of how a member is going to join or eventually leave your club. Will you have transfer fees, and how much will they be? Will you be able to alter these fees down the road? Once the club has established a system, it will be difficult to change, so get it right from the get-go.

You should also address the functionality of the membership. Can a member deactivate or freeze their membership? If so, how much notification must they give and for how long can they deactivate? What if someone is transferred through their work to another area—do they still have to pay dues? What if they get sick and can’t use the club? Should they only be allowed to deactivate if that illness affects their income? These are all good questions you need to answer right away, and many new clubs are not prepared for these issues.

Policies for Guests

How about your guest policy? If you are hoping to get greater exposure to the club, you may want a more liberal policy that will allow more guests to frequent your facility. Will you have free guest privileges for your members? If so, how many? This may depend on the amount of nonmember traffic you are hoping to create.

The psychology behind how private or how public you make your facility requires some insight and research. In some higher income areas, you may discover, the more private you make your facility, the more demand you can create. Give it away free, and it may not seem to have as much value.

What will your operating hours be? The more rural the location of a club, the more likely early morning openings will be valued and late nights less important. Will many of your members have to deal with a commute? That will play a role in your decisions when to open and when to close.

Usually you will need to be prepared to alter your hours as the club expands and demand changes. Extending your hours is an easy answer to produce more facility availability. Don’t forget to publish your holiday hours well enough in advance so that your members don’t get caught off guard.

Employee Issues

As you put together your staff, you will discover that there will be quite a few part-time employees. There will also be a number of those who will want to qualify as independent contractors. Read your local state laws to find out what the criteria is for someone to be considered an independent contractor. You don’t want to pay fines for paying someone illegally.

It’s always a wise move to put together an employment agreement that helps define their requirements and privileges. The club business attracts a lot of employees because of the benefits that a club can provide. How many hours does an employee need to work to qualify for use of the club? Will that usage include their friends and family? How much vacation time and sick leave are you going to allow? Will you provide health benefits? On what holidays do you pay overtime? How will you handle a leave of absence due to pregnancy, jury duty, family care or military requirements? This can all be established in the employee’s agreement.

To make sure that these issues are addressed, create a calendar for your annual or semi-annual reviews. Remember that most states will require the posting of state laws concerning employment. That posting must be visible to all the employees. There are also many states now that will require the managers of a club to have yearly testing concerning sexual harassment and training for CPR for many of the employees. That training will likely include the use of a defibrillator.

After the employee’s agreement is put in place, take the time to establish a training manual for every department of the facility. Every question, every situation, and all pertinent information should be part of that manual. A brief review of what a manual should include would be:

1. An Overview of the Club (mission and purpose of the club, the club’s membership structure, hours, directions to the club)
2. Employee Rules and Requirements (dress codes, usage, payroll info, conduct)
3. Contacts (phone numbers/email for the entire staff, phone numbers/email for services used, addresses that are important)
4. Procedures (where things are in the club, graphs showing plumbing, electrical, etc., how to respond to situations)
5. Emergency Response (location of first aid kits, emergency phone numbers, fire and sprinkler alarms, how to properly exit the building)
6. General Information (how to answer questions, who to forward questions to or department heads, how to use the computer or phone system, how to open or close the club)

Specialized Services

If your club is providing many specialized services, such as a pro shop, salon, massage and therapy center, or food service, you will want to consider what would work best for those who will be responsible for that service and the club. Some clubs will contract these services out and eliminate a certain amount of micro-management.

There are several advantages to renting out or leasing these services, besides the reduction of management. You will not have to worry about inventory overhead or loss due to theft. You will also reduce your payroll and all of the expenses that go along with that liability. If one operation fails, you can simply replace it with a new tenant, although frequent turnover is not good. As far as the income goes, if the contractor is successful, that’s usually good for everyone. Perhaps your contract should tie their performance to the rent or commission.

With so many departments and employees, you may need to establish a chain of command. Your policies that have been established should guide the club, but in your absence, who makes the call? And after that person, who makes the call? You cut down on a tremendous amount of bickering and confusion when the entire staff knows who’s in charge at any one time. Because the hours of clubs are so long, it may be best to set up a group of managers. This will provide coverage 24/7. Some clubs are open more than 100 hours a week, and you can’t expect to always be available to answer questions or address problems.

Future Growth

With your complete program in place, look at its ability to adapt and grow. Have you established programs that can handle growth and expansion? Maybe down the road you will need to have interaction with city or county people and your changes may need approval to fit into the general plan of the community. Someday, you may open up other facilities. Can your system facilitate that expansion?

The manager oversees operations, but also guides the club through the future. He or she has to see the potential and limitations of every decision they make. Short of using a crystal ball, take the time to study and interact with other managers that have gone down this road. Absorb their experience and try to use it to help map your club’s direction.

It doesn’t matter if you have been in the business for a year or 50 years, there is always a great deal to learn about an industry that is growing and in transition. What may work today may not work tomorrow.

See all articles by Rod Heckelman

About the Author

Rod Heckelman  is the general manager at Mount Tam Racquet Club in Larkspur, Calif., and has been on the faculty for The Tennis Congress.

From the February 2008 issue
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