Why do so many clubs struggle to maintain a profit or surplus? In the latest dispatch from our series, The Price of Club Golf, we tackle depreciation. “The vast majority of UK golf clubs are living a hand to mouth existence,” said Kevin Fish from Contemporary Club Leadership. Fish, a leading industry figure, has studied the accounts of more than 250 UK golf clubs and found that around a fifth fail to break even. He emphasizes the importance of better planning and more honesty to avoid this problem.
In simple terms, depreciation is the reduction in the value of an asset over its useful life. Fish explains that many clubs fail to budget for the replacement of assets, leading to a lack of funds for development. The problem arises when equipment needs to be replaced, and there isn’t enough profit to cover the costs.
For example, the replacement cost for items like irrigation systems can be significant. Fish urges clubs to be transparent with their membership, involve them in the budgeting process, and plan for long-term asset replacement. Members who understand the financial responsibilities of owning a club are more likely to support its growth and development.
Managers and boards are advised to engage members in transparent consultations to build trust and ensure informed decision-making. By involving the membership in financial planning and demonstrating fiduciary responsibility, clubs can thrive and grow sustainably.
This piece also appears in the GCMA’s monthly Insights newsletter. Sign up to Insights for FREE here. Have your say in the comments below about golf club depreciation and how it affects club management and profitability.
