Finding the Right Avenues To Revenues
Directors of Tennis and Fitness for years have played a delicate balancing act. From a director’s viewpoint, time on the tennis court or gym floor is servicing the requested needs of a member or group of members. From the club’s objective, time on the court or floor could be time away from the majority of membership. How does a director of tennis or fitness maintain the right mix?
The Ease In Which Avarice Rears Its Ugly Head
How often I hear from a fellow director: “There might not be much teaching at this new club… I think I will ask for a healthy stipend.” I’ve also heard the following: “The easiest part of this job is when I am on the court.” Finally, I’ve heard too many times to count from membership: “He’s always on the court. How much does he need to make?”
There is no perfect ideal when it comes to balancing instruction with servicing members. However, there are several factors which both the director and the board or committee should be aware of.
This is perhaps the most important aspect governing the value of non-teaching revenues. One has to listen to the members, the committee, and the board. “She spends way too much time on the court (or floor if a director of fitness) – how much is she making again?” We’ve heard this sentiment countless times during consultations with members at clubs in describing their department heads in the gym or on the courts. Within this sentiment, there are two possible viewpoints. One is that a member might believe that the director is being greedy, taking all those hours on the court or in the gym on the floor instructing. The other simply being that a director is just making too much money. Both views are not positives.
Many clubs we have worked with here at BeyondTheBaselines.com regulate the number of hours a director can be on the tennis court or gym floor. We believe this to be a highly valuable objective for all involved. Within a contract, this objective creates a goal within an overall club philosophy. That said, the initial balance of a stipend or salary must be seen to be fair by both the director and the club from the outset. Limitations can range from simple limits by hours taught per week within a contract. Industry standard usually is an allowance for 25 hours on court or floor. Clubs can limit instructors and directors in other ways, but by hour teaching on the court or floor is the industry standard.
Unseen Revenue Limitations
However, planned or not, there are hidden limitations put on directors that oftentimes clubs, committees and boards do not realize. Having only one court available weekday mornings for teaching out of, say, nine courts is an enormous limitation of revenues and is seen as such by a Tennis Director. At a summer club, numerous weekend events occuring on Saturday and Sunday mornings almost every weekend is an enormous limitation to revenues for instructors and, in turn, the director. In the gym, on the other hand, too many personal trainers with clients at peak times can cause upset and issues across gym members. A wise fitness director might limit those bookings during peak hours to keep members happy – again a revenue limitation that goes unnoticed by members. These limitations of revenues must be acknowleged in open communication between the director and the club so as to help plan stipend or salary requirements to maintain excellent staff on a yearly basis.
Real Revenues And High Expectations
Retaining good staff starts during the hiring process. Job decriptions or expectations of a contractor must be plainly laid out prior to work commencement. We’ve heard this far too many times: “We can’t get our pros to help out with weekend tournaments.” Our initial question is if that is in their job description or has been discussed with them as part of their work load. If a contractor to the club, are they paid for their time or simply expected to be there? Answers vary but the most commom from membership is this: “The pros should be out there and get to know the members. This is how they will get private lessons.” This sentiment is not usually correct. Tournament players, usually the better players at facilities, rarely take boatloads of lessons. Pros don’t see tournaments or round robins and instructors don’t see spa days as the avenues to revenues. Directors need to be compensated, and contractors paid, to manage events.
Concierging is perhaps the most important aspect of a Director’s job. Ensuring the membership is happy when they leave the courts or the gym is essential to improving the program and job approval and member retention. However, this is usually seen as the least significant task by most Directors. Yet, a happy member goes a long way and is almost a sure avenue to revenue in the long run, as that personal touch is usually rewarded by membership.
By concierging, we mean going that extra personal mile. For example, and one of the leaders in this ideal is Frenchman’s Creek in Palm Beach Gardens, FL, in which a daily news sheet is handed out to employees and contractors. This provides information concerning particular members along with a schedule of all events, membership happenings, and more. Each employee and contractor has the tools to concierge and answer that question about that evening’s lobster buffet. If one doesn’t know the answer, find out! Don’t let that member get away.
Membership and members – both are needy and desire servicing, if only for the fact that they believe it is due to them in many instances. This is a fact of the club and leisure industry and cannot be forgotten by a Director – or the membership will quickly forget the Director.
Both Directors and Clubs misunderstand and misallocate both time and funds to administration. The membership, in most cases that we’ve studied, does not know, nor do they usually care to know, about the back-end of running a tennis or fitness business, something which a thriving department really is – a business within a business. But when a three month summer realizes an average revenue of $400,000, there’s heaps of administration for the Director ranging from member billing, shop inventory, and wages, all the way to calls to members and staff – and that time needs to be understood and compensated for.
More and more clubs do realize this, and again, a limitation of hours on the court or floor is often aimed at the need for administration time. However, that limitation needs to paid for in terms of a salary or stipend to ensure the Director feels valued and compensated and is ready to renew at contract time.
Is The End of Hourly Revenues for Directors Approaching?
This administration time and work is coming under more scrutiny as well, by both member-owned clubs and corporate clubs. As a sidebar, one of the most interesting developments we have seen over the past few years is that corporate clubs are offering share of ownership and benefits to the Director and substituting this for on-court or on-floor revenues. We’ve noted that a larger and larger perentage of Directors of Fitness are a non-instructional post. Both corporate and equity owned clubs are looking at their Director of Fitness (and Spa in many instances) as a non-teaching post, and offering a larger salary, better benefits and perhaps a bonus structure for meeting certain criteria. On the tennis side, we are noting that more often Directors are not being directly compensated per hour for on-court revenues. Their positions are being structured by certain criteria and compensated across various methods, not just via salary and hourly rate on court.
One may ask, and often we are asked, what’s the right stipend or salary for my director? There are so many variables it’s tough to come up with a number. But in starting a discussion with any director and club, we look at total department revenues. Is there a viable “on-floor” and “on-court” revenue stream? Are there limitations put upon the director as to how many hours they can teach and how many events, as these take time and facilities away from teaching, they are being asked to manage. Then again, how are the assistants revenues split between the assistant, director and club? Does the director, as per industry standards, receive a portion of the prize fund to incentivize him or her to run tournaments or special gym days?
When we do have to put a finger on a sum and to start discussions, as consultants, we usually look at 15% of total department revenues as a good basis to begin negotations over a salary or stipend. So, for example, if a department creates a revenue of $400,000, a starting basis point could be a stipend of $60,000. This is simply a rough starting point and needs to be viewed within a context of the club and the experience level of the professional running the tennis or fitness department.
Ed Shanaphy has served as Head Professional at Greenwich Country Club (Greenwich, CT) and Quail Valley Golf Club (Vero Beach, FL). More recently he has been Senior Instructor at the famed Jupiter Island Club (Hobe Sound, FL) and has served on numerous club and charity boards. He is presently Director of Tennis at Sippican Tennis Club in Marion, MA and President of BeyondTheBaselines.com, a leading industry consultancy.