More And More Private Clubs Engage Management Companies
For private clubs, and until recently, hiring a management company like Mosaic Prime seemed inconsistent with their image and often felt like an admission of failure on the Board’s part. This has changed, as more elite properties now engage management specialists like Mosaic to help them improve their performance and member enjoyment. Similarly, forward-thinking Boards recognize that when not assisted by a professional management company, a standalone general manager will never have enough resources and expertise to make a substantial difference.
THE 7 BENEFITS OF PROFESSIONAL MANAGEMENT
1. NEW IDEAS
A professional management company will bring substantial experience to the table. Their clients will include member-owned clubs, developers, hotels, private equity groups, and wealthy individuals, so they will have been exposed to every situation and type of club imaginable. This broad experience will bring new ideas, a fresh prospective, and a host of best practices to your club.
2. ECONOMIES OF SCALE
The larger professional management companies, such as Mosaic, receive the lowest pricing from industry vendors and much better than any property can do on their own. Whether it is equipment, merchandise, food and beverage, IT services, supplies, health or property insurance, etc., the savings a company offers sometimes pays for the management fee. As an example, one of Mosaic’s clubs recently purchased $765,00 dollars of new maintenance equipment, yet saved an additional 15% due to Mosaic’s buying power.
3. EXPERTISE
A top management company like Mosaic will have principals and managers that are experts in every area of club and property management. This is the wealth of specialists – a whole team – that assists the Board, the General Manager, and the staff.
4. MANAGEMENT SYSTEMS
The best companies have developed proprietary management systems – a franchise so to speak – that can be tailored to each specific property. These platforms include accounting, training, point of sale, human resources, sophisticated financial models and budgets, agronomic standards, IT, market analytics, inventory management, membership communications, sales, and retention, etc.
5. COST CONTAINMENT
Member and developer owned private clubs are notorious for overspending and operating inefficiently. What industry professionals have learned to do is to operate a property like a business and in most cases, profitably – without any diminution in the members’ experience, service levels, or course conditions. This for-profit mentality is an attribute that can change the bottom line and financial health of a property substantially.
6. BETTER AND HAPPIER BOARDS
While the professional management group and the General Manager are operating the property per the member’s wishes, the Board members will be able to focus on the important high level issues and long-term goals of the club. Ironically, it also frees them up to enjoy the club, which is why they joined in the first place. Please keep in mind profitability is important at a non-profit entity: it is healthy operating margins that keeps dues down and provide the funds for future capital improvements without assessments.
7. INNOVATION AND CHANGE
Good companies are innovating, staying on top of recent trends, and offering creative solutions to their clients. This can be everything from progressive membership structures, to greatly expanded lifestyles and activities, embracing new technologies, new training and education, etc. Because most companies have experience on the for-profit side of the business too, they have learned to think like owners and entrepreneurs as well.
FREQUENTLY ASKED QUESTIONS
What follows are the questions we are often asked by potential clients considering Mosaic Prime management.
WILL WE LOSE CONTROL OF THE PROPERTY?
Absolutely not. We follow the Board’s lead, operating from a budget and business plan approved by both. Mosaic will not make any major management, policy, or human resources changes without Board approval.
I HEARD MANAGEMENT COMPANIES CLEAN HOUSE AT A PROPERTY WHEN THEY TAKEOVER. IS THIS TRUE?
This is not true. Actually, it is to the company’s advantage to retain all the employees. If there are any changes in staffing at the managerial level, the Board always signs off first. If there are staff reductions, it is only to operate the club more efficiently and like a good business. Again, this is approved by the Board as part of the business plan. Quite often we will recommend compensation increases and additional hiring if it is in the best interest of the club as well.
WILL OUR EMPLOYEES, MANY OF WHOM WE LOVE, BE UNHAPPIER WITH A MANAGEMENT GROUP AS THEIR EMPLOYER?
With a good company at the helm, no. The company will build cohesive teams and reward exemplary performances. Most of us know by now that compensation is not what attracts and retains great associates. What is more important to them is feeling like they are part of something special and doing meaningful work.
Equally important to employee health and well-being is the quality of the club’s leader – the General Manager. Without a talented leader – empathetic and energizing to the employees yet willing to hold them accountable – the club will not succeed, no matter how good the Board or the management company assisting it.
I HAVE ALSO HEARD ALL MANAGEMENT COMPANIES DO IS CUT COSTS DRAMATICALLY TO MAKE MONEY WHILE MAKING THE PROPERTY WORSE. IS THIS ALSO TRUE?
No. If the management company is cutting costs it is only to operate the property more efficiently – without one wasted dollar. Remember, they are working from a budget and business plan approved by the Board of Directors.
Once a property is operating without any unnecessary expenses, the most important focus of a management group is growing the property’s revenues. Clubs are for the most part fixed-cost operations. Thus, one reaches a point of diminishing returns in finding efficiencies. Revenue growth is then of paramount importance. You will find good companies – like Mosaic – will provide you with a host of ideas, tools, and resources to do this, particularly increasing membership sales and participation in all aspects of the property’s amenities.