Broadstone (Dorset) Golf Club Business Plan 2012 – 2020 Introduction As discussed in our previous 5 year plan, released just over a year ago, we introduced the utilisation of a computer business model to simulate the business activity of our Golf Club. The model was first used to determine the cost effectiveness of various forms of financing the proposed irrigation system cost. From this model we were able to determine that the use of a bank overdraft was the most cost effective method of financing this and also future projects. The model enabled us to predict that the cost of using an overdraft would be totally funded by the interest that we earn on our cash surpluses which are available during the periods when we are not using our overdraft. During the first year of operating with an overdraft we were able to contain the requirement to 6 months and were able to manage it so that we never exceeded its limit of £250,000, in fact we never exceeded £220,000. This was even with a couple of unexpected and therefore unbudgeted costs. It was with the model that we were able to manage these unexpected costs and therefore make sensible management decisions without relying on best guess estimates. Planning In last year’s plan we introduced our first attempt at producing a list of projects and their costs. This was a relatively basic list, with a total cost approaching nearly £200,000. It was this list of projects which was used to initially construct the capital expenditure forecast within the model. With that original list of projects the forecasted period of the overdraft was 5 years. During last year we produced a more detailed list of Cap-Ex projects which was added to our website documents page for your perusal. One of the major additions to this list was the course improvement works as presented by Frank Pont at last year’s autumn forum. This latest Cap-Ex project or shopping list is included later in this document. The value of this latest list is £582,000 spent over the next 7 years. During the year we attempt through emails, website documents and a members forum to keep you all informed, which we hope gives you the members the opportunity to make any comments prior to the AGM in March. Financial Forecast Once the financial model was updated with the annual values from the Cap-Ex list we are able to see that with a very small change to member’s subscriptions we were able to sustain this required level of expenditure, whilst at the same time reducing our overdraft year on year. As can be seen from the financial forecast produced by the model we are in fact able to remove the overdraft by 2020. In respect to the ongoing cost of the overdraft it can be seen from the attached forecast that effective cost is removed by 2019. The same forecast also illustrates the annual worst case cash deficit and the projected overdraft requirement that would be required for that year. The forecasted figures are also based on a modest increase in bank interest rates over the period of the model (up to 5% by 2020). It should also be noted that the level of visiting green fees has been kept to a modest figure, and hopefully with better weather this and following years the values used in this model will be seen to be quite pessimistic. The following documents also include this year’s proposed budget and cash flow forecast. Conclusion An awful lot of work goes into the above process which we try to make as transparent as possible. It is not an exact science and we do the best we can based on the best evidence we have available. The business model contains best guess estimates around future interest rates and subscription levels. They are not ‘promises’, they are forecasts but please be assured we will always try to ensure that our subscriptions are reasonable and good value for money. We do not spend money extravagantly, in fact we have always said we will only spend what we can afford, and hence our Business Plan is flexible and enables us to defer, bring forward or deliver on time our proposals. I hope you will all agree that over the last two years we have seen more work delivered, significantly raising the standards of our course and clubhouse as well as the ancillary services offered. We have also seen positive changes in the social fabric of the club and general atmosphere. David Holmes and David Morgan have worked extremely hard to produce the best forecast possible up until 2020 which shows us to be in a very strong position to pay off our overdraft and continue to invest in the club and its infrastructure. This allows us to keep subscriptions at realistic levels as long as we continue to have a disciplined approach and keep as close as possible to the business plan. Finally, please feel free to discuss any issues you may have with information given in this document with the General Manager who will clarify any issues raised or bring them to the attention of the Committee. Chris Dennis (Chairman) On behalf of the Committee Broadstone Golf Club Financial Forecast 2013 - 2020 2013 2014 2015 2016 2017 2018 2019 Total Income 828,802 868,334 906,372 934,110 Total Expenditure 787,359 801,343 835,620 Retained Surplus 41,443 66,991 Annual Capital Expenditure 51,000 Depreciation 955,456 976,498 999,313 1,012,922 860,912 875,563 882,218 914,610 934,503 70,752 73,198 79,893 94,280 84,704 78,418 60,000 83,000 75,000 88,000 84,000 70,000 71,000 64,876 56,184 65,172 69,288 66,492 61,140 64,008 61,380 -215,379 -184,676 -164,790 -130,965 -106,712 -69,702 -25,973 1,312 225,000 200,000 175,000 150,000 125,000 75,000 50,000 0 Annual Interest -2,272 -1,516 -480 357 1,914 3,405 5,546 6,501 Accumulative Interest -3,839 -5,355 -5,836 -5,479 -3,565 -160 5,386 11,887 1,230 1,291 1,343 1,383 1,411 1,439 1,468 1,483 6% 5% 4% 3% 2% 2% 2% 1% 102,000 104,000 106,000 109,000 112,000 115,000 118,000 120,000 Minimum Cash Overdraft Facility Full playing Subscription Annual Subscription Increase Visiting Green Fees 2020 Proposed Capital Expenditure 2013 - 2020 Future Cap ex for Clubhouse Golfers hallway refurb Furniture for 19th hole Furniture for lounge area Redesign front entrance including relocating office space folding doors for dining area carpet for upstairs lounge areas Guttering and sofit replacement for Clubhouse 19th balcony floor and wall replacement 19th balcony extension upgrade fire & burglar alarm system new heating boilers Car park resurfacing continuation of tar path works to range etc Pro shop carpet, lighting and decoration lighting upgrade in upstairs areas New Championship boards Caddy shed conversion Snooker room refurb Flat renovation works Kitchen refurb Redesign TV corner Disability Access Practice Ground Drainage of site construction of covered range including base and services construction of short game area including green spec chipping area removal a resite of existing steel shed Rebuild practice putting green Golf Course Improvements Phase 1 course improvements Phase 2 course improvements Phase 3 course improvements Phase 4 course improvements Phase 4 course improvements Green Keeper Sheds and Compound Wash down pad Re roof and new sides for large shed Refurb staff building Extend sand & soil storage area Improve hard standing around sheds Year 2 2 2 6 5 5 6 8 8 6 3 7 3 6 2 2 4 5 6 5 9 9 Cost 4,000 5,000 20,000 45,000 10,000 20,000 6,000 16,000 45,000 8,000 6,000 40,000 7,000 10,000 6,000 5,000 10,000 5,000 15,000 20,000 30,000 25,000 2013 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2014 4000 5000 20000 0 0 0 0 0 0 0 0 0 0 0 6000 5000 0 0 0 0 0 0 2015 0 0 0 0 0 0 0 0 0 0 6000 0 7000 0 0 0 0 0 0 0 0 0 2016 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10000 0 0 0 0 0 2017 0 0 0 0 10000 20000 0 0 0 0 0 0 0 0 0 0 0 5000 0 20000 0 0 2018 0 0 0 45000 0 0 6000 0 0 8000 0 0 0 10000 0 0 0 0 15000 0 0 0 2019 0 0 0 0 0 0 0 0 0 0 0 40000 0 0 0 0 0 0 0 0 0 0 2020 3 3 4 4 5 15000 35000 30000 15000 8,000 0 0 0 0 0 0 0 0 0 0 15000 35000 0 0 0 0 0 30000 15000 0 0 0 0 0 8000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 2 3 4 5 36,000 20,000 20,000 20,000 25,000 36000 0 0 0 0 0 20000 0 0 0 0 0 20000 0 0 0 0 0 20000 0 0 0 0 0 25000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 7 9 8 9 15,000 30,000 10,000 10,000 15,000 15000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 30000 0 0 0 0 0 0 10000 0 582,000 51,000 60,000 83,000 75,000 88,000 84,000 70,000 71,000 0 0 0 0 0 0 0 16000 45000 0 0 0 0 0 0 0 0 0 0 0 0 0 Proposed Budget 2012 - 2013 Income Total Subscriptions Entrance Fees Green Fees Without A Member Green Fees With A Member Bar & Catering Contract Bank Interest Competition Surplus/Deficit Coffee Machine Balance Total Misc. Income Buggy & Range net Income Total 615000 18300 102000 32000 17500 304 0 1596 25000 17000 828700 House & Bar Wages & NI (Cleaners) Repairs & Renewals LHP & Water Rates Laundry/Cleaning Miscellaneous Sky TV & Licences Gardening & Handyman Leased Equipment Depreciation Total 21500 15000 34000 51903 13000 5000 6200 12000 2400 27288 188291 Expenditure Course Wages Machinery Maintenance Fuel Site Costs Course Sustainables Course Materials Course Maintenance Drainage, Tree clearance, Other Health & Safety Training & Consultants Development Costs Paths Leased Machinery Depreciation Total Summary Total Income Total Expenditure Gross Retained Earnings 197600 24000 14000 8000 55000 8000 2000 5000 2000 6000 20000 4000 42996 33888 422484 828700 787298 41401 Admin Wages, NI & Pension Professional's Retainer Admin Telephone Insurance Printing, Stationery & Postage Staff Meals Audit, Accountancy & Legal Computer Services & Maintenance Subs, Levies & Stock take Captains Allowance Bank Charges & PDQ's Miscellaneous Periodicals Marketing & Advertising Course Marshal Leased Equipment Depreciation Total 95400 27960 2004 9780 8000 3240 5800 5475 605 720 4500 2922 809 3480 0 3228 2600 176523 Cash Flow 2012 - 2013 500000 400000 300000 200000 Total Cash 100000 Total Income Total Expenditure 0 Nov. -100000 -200000 -300000 Dec. Jan. Feb. Mar. April May June July Aug. Sept. Oct.