HomeMy WebLinkAbout2016-02-03 PACKET 08.C. Business Plan for River Oaks Golf Course
Back rg ound:
River Oaks has been identified as one facet of our operation posting a negative balance
sheet. As part of the City Council's strategic planning initiative, leadership has chosen to
take an active role in restructuring the Golf Course's business model to not only account
for improving our financials, but also position the operation to better serve the over-all
needs of our ever-changing community. The goal is to "re-brand" and re-structure the
facility for service and financial success while promoting growth and profitability.
In September 2015, the City Council authorized a Sub-Committee comprised of Council
Member Dennis and Mayor Bailey to explore options for addressing operational concerns
relative to this end. A vision was articulated to City Administrator Stevens in December
2015 outlining proposed plans and identifying feedback supported by an analysis of our
existing operation. Lastly, the philosophy of this design was discussed and accepted by
Council as part of our 2016 strategic direction. Through this process, the following plan
is highlighted for approval as part of our agenda for the February 3, 2016 City Council
meeting.
Plan Outline:
According to our analysis, River Oaks must be repurposed into a new format—one that
can more viably compete within the market to limit"economic bleed" and draw new
customers to our city. The overall goal is to end financial losses presently recorded at
over $100,000 per year. With a 2014 sales matrix that included over 33,000 rounds of
golf, we need to achieve $3.04 or more of financial participation from our customers in
the four plus hours they average on the course to be profitable. And this measurement
only contemplates the singular aspect of golf(not food and beverage or event center
options). By utilizing our infrastructure to provide additional service and entertainment
formats, we can greatly increase our business prospects.
River Oaks must be re-branded to include the concept of promoting a"full-service"
venue. It is the Sub-Committee's intention to establish a seven day a week bar and grill
operation that will give our community the chance to make use of the facility with regular
patronage. The marketable concept addresses a"re-branding" process to focus on the
recognition of: "River Oaks Bar& Grill, Golf Course, and Event Center". This promotes
three distinct—yet inter-connected uses (when marketed as such), to create a"top-of-
mind" awareness to the public that we offer much more than the game of golf!
Golf(as a participation sport)is on the decline and key demographic data reveals two
statistics that tell the story succinctly: Since 2003, the number of U.S. golfers has
declined from 30 million to 25 million. A more chilling stat is the 13 percent decrease in
golf participation among 18-to 34-year-olds from 2009 to 2013. This indicates we
should be looking in different directions as we move forward with the concept. Our
philosophy holds there is still money to be made. The goal is to get a higher requisite
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percentage of market-share by attracting and capturing business from other local courses.
And we can best accomplish this by doing what our competitors won't... from a service
and value-added perspective.
River Oaks as a municipal entity, is the"people's house"! To connect with our
community in ways never before imagined, we need to establish our connection through
an integration of both civic and charitable virtue. While we don't presently have a
"Community Center", this venue if used properly can become the "Center of our
Community". It must become synonymous with the fabric of our people and must
"house" special events throughout the year to give the Community a viable option for
reasonably priced food and drink, provide entertainment such as outdoor
music/plays/comedy, etc. and offer a space for gatherings and special events with
reasonable accommodation.
If we do these things well, the facility can do much more than simply break even. It has
an earning potential that can positively impact our bottom line. But none of this will
happen unless we have a supporting management plan that addresses the Community's
needs! We are confident through the implementation of this plan, success can be
accomplished in 2016 that will result in a profitable operation.
Through considerate attention and good management oversight, our Sub-Committee can
bring professional expertise and background to positively achieve our goals. The over-all
intention is to post positive numbers within the parameters of our given budget. We're
not seeking substantial physical upgrades at this time other than to address the "wrapping
of the bar" between the event space and restaurant, and addressing the fundamental
corrections needed behind the existing bar to add a lit"back-bar" and whisky wall (shel�
to display new products.
Discretion for contemplating the facility's future (regarding potential upgrades)would be
up to the City Council. Additionally, the overall budget allocation and any/all
determinations regarding staffzng needs are under the full discretionary authority of the
Council. Administration of this proj ect will proceed in accordance with the existing
structure of the 2016 River Oaks operational budget. Any budget changes will be
directed to the City Council for review and authorization."
As a"sub-committee", it is our intention to oversee and directly manage the business for
one year with a goal of"handing it offl' to our Staff Management Team sometime in
2017. This will position the business to operate in a manner consistent with other
responsibilities assigned to the Parks and Recreation Department.
Areas of responsibility.
• As part this Business Plan, until the business is assigned to the Parks and
Recreation Department or another appropriate Department within the City, the
Council is asked to authorize Council member Steve Dennis to be designated as
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the General Manager, to provide direction and recommendations to the Council
for the River Oaks Operations including:
1. Staff
2. Operations strategy
3. Implementation of food and beverage programs
4. "Creative control" of ideas/processes
5. Marketing initiatives and design
6. Budgeting and expenditures
The Council will act as a Board of Directors and following recommendations by Council
member Dennis, may authorize the implementation of the operations as they deem
appropriate. The Council will be required to follow all City personnel policies, budget
processes, purchasing policies and other administrative policies and procedures as for any
other program or department in the City.
Operational analvsis included the followin�:
• strategic business related questions that defined current operation
• personal visits to the course observing operations in action
• Two "secret shops" were conducted (one of which provided written
documentation) and numerous discussions with customers who golf there...
Results indicate substantial o�portunitv for improvement.
• Leadership staff to demonstrate pride, passion, and business acumen
• Industry-standard controls involving the processing of sales transactions
• Operational food costs must average within industry norms (26-31%).
• Management oversight installed to limit"shrink" potential and establish correct
accounting standards.
• Create and orchestrate an effective marketing program and use of electronic
media
Staffin�requirements:
To accord success with our new direction, we must redefine the roles/responsibilities of
management and staff to align with the directional requirements of a vastly different
business model. This will involve both job descriptions and pay-scales as part of a
balanced process, which shall be approved by the Council.
Kev Positions required for River Oaks 2016:
• Golf Professional -
This position will oversee golf, Pro Shop (store/payment shop), and interface with
grounds keeping staff.
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The Golf Professional can assist with anticipated needs and strategy that promotes fiscal
responsibility while considering staffing levels required for proper service.
• Food, Beverage, and Operations Manager -
This position requires verifiable "industry" experience that can match up against a j ob
description covering the operations of a seven day a week, full-service bar and restaurant
operation. This position must demonstrate proficiencies in all facets of operations
including event/wedding/catering services.
• Executive Sous Chef-
This position requires someone with verifiable"industry position" experience and related
culinary training/education that can match up against a redesigned job description
covering the operations of a seven day a week, full-service bar and restaurant operation.
• Additional experienced industrv service staff must be hired as needed
1. Bartenders
2. Wait Staff
3. Line Cooks
4. Food Expo's
5. Host's
6. Dish washer's/cleaning/bussing
• Grounds keeping Staff:
Our grounds keeping crew has demonstrated excellence in all facets of responsibility that
we intend to continue.
• All staff must represent the operation with the highest levels of:
1. Service
2. Quality
3. Salesmanship
4. Pride
5. Integrity
6. Winning mentality— desire to turn an operation around through the display of
excellence, operational correctness, and guest satisfaction! Being motivated by
sales success and desire work as an effective team is paramount to the desired
outcome.
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As an integral part of oversight and to maintain direction, Council Member Dennis will
act in the capacity of a"General Manager" to oversee the operation:
1. Assisting with the hiring process for key-level managers and lead staff.
2. Work with River Oaks management staff to establish best practices for
conducting a profitable business.
3. Ensure we are training staff to an"industry standard" protocol for achieving
operationally correct structure.
4. Will "leverage" industry connections in both food and beverage areas to assist in
guidance of principles/practices that eliminate the need to pay for costly
consulting services. These connections will provide staff training as needed as
well as a full range of professional printing services for indoor/outdoor signage,
banners, menus, etc.
5. Work with new managers to design business plans for each part of the operation
that promote maximum efficiency and profit generating potentials.
6. Direct the beer beverage program by setting the product lines and ensure that
ordering is conducted with wholesalers offering us the best value and service.
The beer menu will be fully executed to accord a number of top-selling"macro"
products (on tap)plus an enhanced "craft" selection featuring local options
representing the hottest part of the market!
7. Establish a spirits program and wine list by following industry standards relative
to market share and sales results. Flexibility will be built in to pair wine with our
food menu and offer availability for special orders for events/weddings.
8. Introduce a whisk(e)y flights program that can be "bundled/up-sold" as part of an
enhanced program option. Ex: "World Whisky Tour", pairing for enjoying with a
cigar(outdoors), as part of a special ticket price, etc.
9. Create a completely new food menu with our Food, Beverage, and Operations
Manager, and Executive Sous Chef. Focus will be on "comfort food" and other
options like"fresh meat" hamburgers, hand-cut fires, Philly Cheese Steak
sandwiches, etc. Emphasis will be on fresh foods that are highly sought and easy
to make. The days of"pre-processed", frozen, high-sodium, and deep fried
everything will be only a memory. We must reduce food costs and efficiencies of
scale, portion control, buying properly, and transactional processing will be fully
in force.
10. Add cigar sales to the Club House, Pro Shop, and beer carts. We can potentially
make up 20% of our annual deficit with this addition alone! Staff will be trained
on how to sell and market these products.
11. Adding "beer cart" service to cover all days of golf operation with enhanced
coverage during"peak hours" of operation. We must offer golfers an approach at
least once per hour during their 4 hour stay.
12. Commitments have been secured from five breweries that will support our
operation with one guaranteed event per year. This could include "beer dinners",
tasting events, educational classes, etc. that we could charge an admission to and
fill the event rooms up! This would represent huge profit potential by tapping a
source never before taken advantage of.
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13. Utilize contact from Oliva Cigar Company is working to procure humidors for us
(at a reduced charge) that we can use to sell his brand. He has committed to
working events as needed, including the orchestration of special sales events and
tasting programs. Again... something we can charge an admission for!
14. As a part of our"re-launch", a contest will be orchestrated to identify (by votes) a
"signature cocktail" we will call "Par for the Course". This will include industry
assistance from some spirits companies and local mixologists where we will
heavily promote the event(using all available media) and let the public attend to
vote and pick the winning drink that will be a River Oaks exclusive!
15. We will sell River Oaks branded soft-side 6-pack coolers through the Pro Shop.
Buy the cooler for a set price and receive a discount on beer purchased at the
course—for the season. When they're not using it with us, they can advertise
River Oaks on other golf courses!
16. Custom designed"Sales Track" templates will be designed so we can track our
sales progress in real time.
17. We will conduct weekly meetings to strategize on business operations, plans,
marketing, facility cleanliness/organization, etc.
18. As a General Manager Council Member Dennis will be available by phone for
answering questions and providing real-time consultation as needed.
19. During the golf season, we will periodically attend the course and ride along on
beer carts to greet/thank our customers on behalf of our City Council and Staff.
20. Periodic schedule "secret shops" to monitor our service levels and product
quality.
21. Restructure our"Twilight" Golf packages and end"Kids Play (virtually)Free"
after 6:45 P.M. Our course and experience already offers great value and we
won't give it away from free!
Restructuring a business to achieve profitability after a sustained period of financial
losses is no easy task It is the opinion of the River Oaks Sub-Committee that by
following the above listed plan, we can achieve success within the span of a twelve
month period commencing at the point of full-scale plan implementation. Any lack of
follow-through or receiving less than 100% support from all involved will have
implications limiting overall progress.
A substantial part of the logic represented in this plan comes from the following
considerations:
1. Improving our customer service dramatically affects our sales outcome.
2. By offering new and viable options for service and sales, we provide numerous
opportunities to increase our bottom line through the "top-end" by increasing
sales production.
3. Our wedding event business has diminished due to additional competition.
4. The community needs additional food and beverage options.
5. Local dining venues including The Point and American Motorsports have
recently closed representing over $2M dollars in possible opportunity.
6. If structured properly, River Oaks can become the "Center of our Community".
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7. While everyone eats, the game of golf is limited to a market in decline.
The benefit of undertaking this process will affirmatively demonstrate the viability of the
River Oaks Golf Course going forward. If profitability cannot be achieved, we will know
a"best faith" effort was made and can confidently pursue other options going forward. If
the program is successful, we can support a great community amenity that contributes in
numerous ways to both our area's "lifestyle" and to our desire for good fiscal
responsibility.
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Cottage Grove
Citizens
City Council
Council Member Dennis
City Adm inistrator Managing Consultant
(Acting General Manager)
•----------------------,
; General Manager �
; (To be assigned in future) �
'----------- ----------�
Golf Superintendant Golf Pro Food and Beverage Executive Sous Chef
(Exempt) (Exempt) Manager (Exempt)
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Assistant Golf Seasonal Pro Club House Staff Kitchen Staff
Superintendant(Exempt) Shop Staff
Seasonal
Maintenance Staff