As a business owner and leader in our industry, Kalindi Dinoffer has led the industry not only with training aids and creation of tools for teaching professionals, but also in marketing. Kalindi’s efforts in marketing her brand both at national industry conferences, through social media and video presentations have introduced her as a leader in our industry.
As Kalindi starts to mix and dabble with mindfulness and combining that in her life and business with her tennis following an injury-prone career of competitive tennis, she takes us on a journey through training, meditation and marketing.
Discussing who served as her mentors and role models, Kalindi looks at her exposure as a junior player and while in college, not just on the courts but, like her company’s name, off the court as well where her Spanish professor and then an Italian professor at the business school, Kalindi speaks about her experiences growing up in the business. She discusses why she thinks the golf industry and the PGA are leaders in the leisure industries and why we, in the tennis industry, follow their lead.
Kalindi’s latest achievement is the creation of a 5-day Virtual Symposium, starting July 13th. Given the restrictions that Covid-19 has placed on our industry, Kalindi along with inspirational speaker and tennis coach, Emma Doyle, have put together a panel of phenomenal speakers from across the tennis industry. With three interactive sessions daily, this is one event not to miss.
Kalindi’s business for tennis and pickleball and more is at OnCourt, OffCourt and you can reach her any time at her email: firstname.lastname@example.org
The fourth segment in our series: “Women in Tennis”
Avoiding the “type casting” of the female pro as “you’ve got the 10 and unders,” Christen Zawatsky has made her role a universal one. One of the leading junior development directors in all New England, Christen joins us at the BeyondTheBaselines.com podcast to discuss her many years at The Kingsbury Club outside Boston, Massachusetts where she is a revered coach for both adults and juniors.
Coaching from red ball through to high performance juniors and adults, Christen has no desire to coach the ladies teams but loves being a female in our industry. She has made her mark by proving herself either by serving that ace down the T to the adults or backing up her teaching methods consistently to her juniors, parents, and adult students.
From Arizona to Kalamazoo, from Boston to Oklahoma, Christen travels with her juniors to zonals and nationals and sees herself as a role model for all her students. Christen has supervised the fantastic progressions and advancements of many of her juniors. But she has also witnessed the toughest part of her job far too many times: Parents ruining a flourishing junior’s career.
Christen is creating and building a program of over 200 juniors around solid progressions and fitness. Shifting her high performance pathway to a program built around athleticism, she trains many students who haven’t played a second sport. As an Orange Theory fitness coach, Christen is combining her two loves and is creating a dynamic program in New England at Kingsbury.
Women Students and the Female Teaching Professional
Women don’t always accept women instructors, states Christen, but women students are not Christen’s favorite either. For the most part, she removed herself from most of the ladies practices and clinics. ” I just couldn’t deal with all the drama. Maybe it’s because the ladies wanted to share with a female pro, but with all the chatter Christen found herself asking: Are we still playing tennis here? “There are more battles with the women. With the men it’s easy – If they know you’re better than them, that’s all they need to know.”
With that said, Christen believes that women directors understand the membership better than male professionals and “concierge” the membership more effectively. Organizationally and in terms of management, Christen sees her female director and other female pros more understanding of members’ needs.
And in terms of women entering the industry? Christen says to all those females thinking of perhaps trying their hand as an instructor to give it a shot and think back to how you started as a young girl player. Christen finds it extremely rewarding with such moments as opening the mail one day and receiving a hand-made card from one of her young students during a Pandemic. “I love it when I see one of my youngest girls asking to take a photo with me and she’s a ‘mini me'” decked out in her junior LuLu Lemon outfit. “Be that role model you always dreamed of having as a coach when you were a young girl.”
How Users Can Be Abusers and Team Players May Lower the Value of Your Membership and Club
From a management viewpoint, clubs are businesses. In these uncertain times, this is an even more crucial viewpoint. Clubs need to show positive cash flow, year-in, year-out. Each event should show a positive cash flow.
Pricing, supply and demand, and life-time value of customers/members all enter into the equation. Several market-based rules apply. One is: You can always lower a price; you can’t easily raise one. Associated with this is one adage usually held in even higher regard by some marketers: A customer garnered through a low-priced offer will always have a lower life-time value.
This adage alone recommends keeping initiations and dues at the higher limit that demand allows. You may lose a few member prospects due to higher joining costs along the way, but members that do join are almost always better “customers” of the club with a higher life-time value across a longer membership.
Customer life-time value is the profit margin a company expects to earn over the entirety of their business relationship with the average customer. Let’s change the wording: Members’ lifetime- value is the profit margin a club expects to earn over the entirety of membership with the club. Let’s break this down a little.
To calculate on a large scale, an average member’s value to the club can be estimated for each newly acquired member taking into account the acquisition costs (marketing and operating expenses) and the cost of the services provided (professional fees, balls, training aids, etc). This gives us an average value for each member. This average fluctuates on the variables of how often a member purchases, the value of those purchases and how long that member retains membership. Or simply as a mathematical equation, to look at each member individually:
Member Lifetime-Value = Average Value of Sale × Number of Transactions × Retention Time Period × Profit Margin
Does League Play Add to Your Facility’s Bottom Line?
We all know the delicate balancing act that Directors of Tennis face when it comes to teams and league play. Interclub teams, USTA team offerings and other organized play are rife with politics. If allowed, teams and leagues can dominate a director’s and his staff’s time.
Leagues do serve a purpose. They create competitive and regular play at little or no cost to players. And here lies the dilemma. With play organized at little or no cost, how can a club and director keep a perceived and real value to the club and the program? Here a delicate balance must be struck: free and low-cost play versus the perceived membership value (intangible) and real life-time value of membership (tangible).
A question always asked is whether to charge for team practices to raise the value and spending of team members. Should the charge be weekly by attendee, where some team members may show up, or should each member be charged in advance, leveling the playing field? Another option is this: those who show up for practice get first dibs on that week’s match.
All three variations have benefits but all three also have issues. In terms of revenues and life-time values, the upfront charge (maybe including a fee for a uniform and match balls as well) can really add to life-time value. If team practices are mandatory and paid for in full, the average life-time value of a member goes up. If not, more often than not, the average life-time value of a member goes down, significantly.
Over the years there have been two methods of dealing with such league play. The avenues taken vary between clubs, and are dependent on a number of factors. Some of these factors include the level of control (aka micro management) a director desires over his or her program. Another factor is how the club operates on a revenue basis in relation to the ideals and ethos of the club. These two factors usually dictate a hands-on or a hands-off approach to teams and leagues, and the politics they create. They also play a large role in the perceived and real value of membership.
Leagues or Bust? Well, No. Look at Life-Time Value
Number of transactions and average value of sale is what always sticks in my mind as I watch a 9.0 mixed doubles league team take up 3 courts at peak time under the lights on a Thursday night. Teams take courts. courts that could be creating revenue. Teams also gobble up the time and attention of staff, from front desk up through to the director. These are costs, and yet, more often than not, revenues from teams do not cover the operating costs of the offer. Your cost of goods is higher than your retained prices.
If one takes into account membership initiation fees and membership dues, perhaps a slightly prettier picture is painted. However, those fixed revenue streams should really be saved for capital expenditures and facility improvements.
Often, a ladies’ or men’s team, if unhappy at a facility, will threaten their memberships collectively. Club managers and directors get wrapped up in the “heat of the moment” and think of massive losses if a team walks away. In reality, more often than not, these teams are not adding to members’ lifetime-values. Statistical data show that team members rarely take private lessons or jump in a clinic. but rely on inexpensive team practices for their instruction. Aside from uniforms, usually purchased after negotiating a discount for the team members, there are few purchases in general from team members. Team members travel as a pack and save money as a pack.
Another cost factor is an intangible. Every time a club team takes to the courts, half the players are non-members. Clubs are so particular about guest fees and how often guests may play per month or annually, but here, every weeknight or 10am on weekdays in Palm Beach County, most club courts are filled with 50 per cent non-members who are playing for free. Do the leagues pay guest fees? No. Maybe that is a bridge too far. Leagues do serve to provide competitive play. But the intangible, and often heard, perception is always there: who are all these non-members at peak times. creating another balancing act for director and manager? Even more importantly, league play preempts member use at peak times, creating another balancing act for director and manager. There is a cost to the club or facility that cannot be measured, but can be very high in member morale, non-usage and lost revenues and perception.
Teams and Covid-19 Are Opportunities
League play is an opportunity for profitability and adding life-time value, but one that has to be created correctly really from the outset with new ownership or a new director. And when that opportunity is taken, management and staff have to be on the same wavelength. As we resume play and leagues come back from the Pandemic, that opportunity appears once again.
Once a team is allowed to operate on a low-cost basis, it will be difficult to raise that revenue stream. However, a change in director, management, ownership or an elongated pause from play created by a pandemic allows for a resumption of league play under new guidelines. As league play commences, create a perception of value by charging adequate prices for all team practices, offer a warm up, and charge for uniforms and balls in full. If the team bucks and objects, well that is unfortunate. That team might leave and find a new club to call home, which often happens. But on the bright side, your membership life-time value just went up.
Ed Shanaphy is President of BeyondTheBaselines.com, a subsidiary of SBW Associates, Inc. He is a graduate of Duke University and The London School of Economics.
It happens every time. The Director of Tennis hands in his resignation and the General Manager, before the ink dries on the resignation letter, has a mailbox full of emails from members. The emails all implore the same sentiment: “Hire this guy, he’s great. He’d be great here at our club.”
Please don’t misunderstand the sentiment. It’s fantastic that members want to add to the department, or bring in someone they value to a club. It shows they care about the program and the club. However, in most cases, the members don’t know what a Director of Tennis does, day to day. That’s a good thing. It means the Director had been doing a great job: wonderful front-person with members by day, administrator and businessperson by night.
As industry consultants, we read the same book at each club. Hiring a tennis director or head pro has the same chapters and table of contents. The emails to the individual in charge of hiring comprise Chapter Two, after the politics of and the questions over the resignation fill Chapter One. Chapter Two is the only place where members include management as they talk about “our club.” What’s ironic is that it’s always going to be their club, the members’ club. And, if you hire their guy, he’s always going to be their pro.
The Members’ Sentiment Is Right. Hiring That Professional Is Wrong
Time and again, we see it happen in the industry. And down the road, hiring a pro who initially came from a members’ reference can create issues. Word of mouth along with professional and personal references play a big part during any hiring process. But they should be kept in context.
The hiring process comes in three forms. One we term: “the closed account.” This is the toughest form for the General Manager to endure. The chairperson of the tennis committee rules. They want a particular pro. They’ve been planning this coup d’etat for years. They will not listen to anyone or anything else. Handpicked… It was always going to be this pro. Often, the club will cover this up. The club manager will go through a process, taking in resumes. He or she might even post a recruitment advertisement, to cover his or her backside and the club’s reputation as a fair and equal employer. But the writing is on the wall. The pro is already hired. De facto.
Oftentimes, this is where other Directors of Tennis get their say. These other Directors are asked by the chair of the tennis or search committee or the member pushing hard for their candidate to write and call, unsolicited. There’s a planned lobbying effort on behalf of the “anointed” candidate. The club manager will receive a call from a past Director for whom the “de facto” candidate has worked with a follow-up call from that Director’s general manager. It handcuffs the hiring club manager. And the process is closed.
This is so unfortunate. The hiring of a Director of Tennis, Fitness or Head Professional is an opportunity to educate members, and sometimes, club managers, as to the industry and the position. Most members don’t know about liability on tennis courts or realize the amount of mentoring assistant professionals require. They don’t realize that more than 50 percent of a Director’s work day is spent, or should be spent, in administrative tasks. Laying out a strong job description and going through the pros and cons of the former Director is a process worth its weight in gold. It helps to outline and structure the goals and objectives of membership in accord with management requirements.
Instead, with a member having their pro hired, the pro is always that member’s pro. If club management or another member has a legitimate issue or grievance, or another staff member feels differently about a methodology, the Director will rely on the member who hired him or her and lasso that member into any significant discussion.
Beware the Hire from Within
The second form of hiring is from within the club or facility. The Director leaves and the member sentiment is: “We need to hire from within. Tradition. Our club knows Tony, the Head Pro. He’s put his years in as number two. Let’s move him up. It’s the right thing to do.”
Again, the opportunity to educate by working through a full national search is lost. The department continues on and members have little, if any, idea of what a modern-day program may or should look like. They’ve had the same Director for, say, 20 years and now they are moving up his right-hand person to continue the same, banal programming for another 20. If the outgoing director were named John, the new pro being pushed up is always going to be “John’s guy” or girl as the case may be. It’s usually not a healthy or long-term tour of duty upon ascension. The denouement written a few years later is a quiet, but quick termination.
Here’s why. There’s always a group, perhaps small, but often not too small, of members who never liked the outgoing Director. And now they feel the following: “We are hiring his number two. When will our club ever learn.” They feel stuck with the same team and remnants of the former Director, even though the Director they didn’t like is gone. They don’t truly see a change in course of the program or the club. Of course, members feeling this will not make their voice known to fellow members, but they won’t be welcoming to the number two as the new Director. And they’ll let that sentiment be known when he or she becomes top dog. Eventually, the members of this group win over other members as the memory of their beloved and retired Director fades. And the new guy is quietly banished, because the hire was out of respect to the outgoing Director and not based on the qualities of his former head pro.
Cream Rises to the Top
The final option is the national search. “We will get hundreds of unqualified candidates.” We hear this all the time. We respond: “And you’ll get a handful of excellent choices.”
It’s not just the candidates, including those candidates recommended by a member, that need to go through the process. It’s the club and its members that need the process just as much. The interviews, the projects created for candidates to complete – such as drawing up a comprehensive lesson plan for a junior program – all help the club grow and mature as it goes through a transitional period.
Candidates with varying backgrounds both on and off the court possessing different business and administrative experience come to “lay out” their wares in front of members who have rarely or never conducted a search for this role. Members are truly unaware of what a Director of Tennis or Fitness does most of the day. “Aren’t they just the front-of-house at the tennis courts or in the gym?” We hide our smile as we begin to help outline the job description from budgeting for and retaining staff, from planning resurfacing to estimating liability and workers’ compensation insurance, from ordering and investing in inventory to approving new logo artwork.
Through this process, the cream rises to the top. Based on not just one call from a former boss, but on six to eight references from colleagues for whom the candidate worked and from others who were mentored by the candidate, the cream rises to the top. As interviews across zoom and skype help to create a fluid list of top candidates and a careful review by non-biased eyes look at verified experience, the cream rises to the top.
Don’t Be Bamboozled
The above experiences come in various shapes and sizes. A Head Pro advises the hiring of a friend for an Assistant Pro role. Again, that new hire will always be the Head Pro’s pro.
And it occurs right on down the line. Club managers and Directors are besieged yet again when a Head Pro leaves. Members know that getting their choice in at number two could lead to number one, with the hiring from within a stoic tradition at many institutions.
This November U.S. voters will have the choice to elect an incumbent or a former insider. We as voters have that right. Club members want that right too with their department heads. This year might see a lack of debate and discussion given the effects of Covid-19. The national search has already been truncated. A Senator from Vermont was shortchanged. We might not be fully educated as to the incumbent and the challenger, who we all view as the previous guys’ guy. Similar to what happens when hiring a Director of Tennis or Fitness isn’t it? But we have no excuse after Covid-19 not to go through the process, educate ourselves, and find the right candidate as the cream rises to the top.
Ed Shanaphy is President of BeyondTheBaselines.com, a subsidiary of SBW Associates, Inc, which is the country’s leading consultancy for country clubs. BeyondTheBaselines.com specializes in hiring and retaining tennis and fitness staff and management of club tennis and fitness departments on a permanent and temporary basis.
Our National Town Hall held the week of May 18th investigated the workplace, restructuring and reclassifying employees, health care coverage and employment law in connection with reopening against the backdrop of the CoronaVirus Pandemic. With over 50 club managers, governors, directors of tennis and other industry specialists on the call, a fantastic Q&A session followed the initial presentation by BeyondTheBaselines.com team members.
With Human Resources expert Renee McCarthy from Suntree Country Club in Melbourne, Florida and moderated by our President, Ed Shanaphy, this lively Town Hall started with a discussion by Ed demonstrating the need for cash and liquidity in reopening country clubs and tennis facilities.
It quickly moved to restructuring employees. Managing personnel, either as a club manager or department head, will be crucial to reopening. Cross training staff to desk and admin jobs or pushing full-time workers to part-time or even seasonal will be effective methods as the country club industry rebounds post Covid-19.
What levels of play and usage will clubs see over the summer, the next 6 months and the next year to three years? Perceived versus real member usage will be interesting and daily monitoring will be required. How will you separate play and keep juniors from accumulating next to the courts and socializing?
All this and much more on this one hour National Town Hall. Below please find a link to our Power Point Presentation for this Town Hall.
By Ed Shanaphy A second report in our series: Women in Tennis
Amy Pazahanick always knew she wanted to start a tennis academy. She knew it long before she graduated from college. She knew it with every tennis ball she hit during practice as a kid. She knew it while she played nationals and headed to a Division I school. By the age of 26, she thought.
Pazahanick did it. She didn’t just start an academy, however. Amy now finds herself running one of the fastest growing management firms in the nation. Her firm, Agape Tennis Academy, established in 2012 on the outskirts of Atlanta, Georgia, was an academy aimed at integrating with the community. Now, as a management firm, Agape maintains its values by remaining truthful to its roots – the numerous communities it serves on the courts.
Just Like Tennis, Business Improves Through Practice and Repetition
A graduate of Coastal Carolina University, Amy learned her trade under a fellow female director of tennis. Under her first director and mentor, Amy remembers that she learned just as much about the “business” side of running a tennis facility as teaching a backswing. Referring to her first boss Amy notes: “She was instrumental in my development,” as Amy reflects on her start in the tennis world which, to her, seems so long ago.
The consistency of branding and putting a message out there that stays true to Amy’s “mission and vision” has brought her success. Alluding to her training as a Division I athlete where she practiced something again and again, Amy cites the parallel with business – business improves with repetition and practice. Amy pounds the pavement and never stops growing and learning through repetitive, yet objective, marketing, planning, and strategizing.
Creating a Team On and Off The Court
With a staff of over 50, Amy has assembled teaching professionals on the court that work as a team with juniors in the academy in the foreground and the community as the backdrop. They all look to take juniors to a new level, she says. Unlike other academies where personalities may get in the way, she stresses the emphasis of teamwork in developing juniors’ games. Amy does rely on her hand-picked team to support her and her company, but realizes that hard work and attention to detail can’t be replaced when you’re a leader.
One of the most Influential Women In The Industry
“If you’re a woman, you are held to a higher standard… men have a little more freedom to make mistakes,” states Pazahanick. But, then she says the industry is fair. “If you’re good, you’re good. The market is not going to care. If you’re good, it doesn’t matter what you look like, if you’re a female or if you look like you’re twelve years old.”
Amy isn’t just good. She’s excellent. She is a perfectionist when it comes to organization and has grown a teenage dream into a large-scale reality. She has been named both Georgia’s Tennis Association and Georgia’s PTR Professional of the Year. Her dream, Agape Tennis Academy, was named Tennis Organization of the Year by the Tennis Media Group, but even more special to Pazahanick, was that the Academy was also named Community Outreach Program of the Year.
Join us as we take a podcast journey to find what makes Amy Pazahanick, well, simply…tick.
Agape Tennis Academy (agapetennisacademy.com) is actively bidding for more facilities, and Pazahanick expects the firm to have up to nine facilities under management by the end of 2020. You can reach Amy by email at email@example.com
By Ed Shanaphy B.A. Duke University, M.A. The London School of Economics President BeyondTheBaselines.com – SBW Associates, Inc
These are unprecedented times, but they will come to an end. Whether this summer, or in early 2021, Covid-19 will finally subside and we as an industry across the nation must be ready. Club managers, owners, and boards of governors should have a short-term and long-range plan for reopening. Reopening requires liquidity, availability and flexibility.
Prior to opening, as a club manager or owner, you have a single opportunity to restructure the tennis and fitness departments. All bets are off as you return and bring staff back to work. Most clubs and businesses are predicting a revenue drop of approximately 30 percent over the next 18 to 24 months and preparations for the change that Covid-19 will bring to bear on the country club and the tennis and fitness industries must be weighed in appropriately before any plans are finalized.
Liquidity is essential. The access to cash and funding is a necessity, whether you are a facility employing a director or “farm out” your tennis or fitness department to a director running a business within your club structure. Many clubs are unable to apply for Small Business Association funding, whether excluded as a 501(c)7 social club or simply red tape. But if by chance your club or facility was successful in its application for SBA loans or grants, that is a great help to retain staff and cover payroll costs during these weeks and months that clubs are not operational.
If you were not able to get through the paperwork for government funding, there are other avenues to liquidity. There are emergency disaster loans from most states. If your club or facility has a long association with a bank, you can often receive bank funding at a low percentage rate using club assets as collateral. Finally, if your facility or club has an excellent credit rating or Dun & Bradstreet report, it should not prove too difficult to gain some more liquidity if required to restart from industry financiers. What we must take away from this as club managers, governing bodies and advisors is that the term “savings for a rainy day” must be now essential business management as we move forward and budget accordingly.
Most clubs run at a fixed cost, whether they are open or closed. Staying closed longer puts more money in the club’s coffers, but members might become impatient and ask for partial or pro-rated refunds of membership dues. It’s a delicate balancing act for any club manager and board of governors.
Depending on refunds to members or clients, clubs remaining closed longer may and should have access to savings and funding bigger than any contractor working within the framework of the club. We have encountered many clubs guaranteeing the independent contractors running their tennis and fitness departments funding for costs incurred, such as overheads, retail purchases for golf, tennis and fitness shops, and payroll. These loans from the clubs in most cases will be paid back over the next season of full service.
As we move forward through this crisis, there is a possibility of assessing a membership for a planned project which could help instill cash into a club as the revenue streams come recover. This could be a somewhat riskier method in that it relies on timing of the recovery and a strong economy coming back to fore in 2021 and beyond.
However you find cash, it’s imperative that the club or facility has enough to remain a viable concern and to be flexible when reopening, something we will look at below.
One of the top three desires and wants of any membership is availability of staff and management to members. The CoronaVirus era hasn’t changed that. In this era, in-person communication is not truly possible, so communication is left to substitute for availability. Communication should be planned, positive and productive. Communications with staff should be daily, especially with department heads who are planning the minutiae of reopening their departments.
Communication with stakeholders, whether clients or members, should be relevant and frequent. Both the club manager and the department heads should be reaching out often to members or stakeholders. Outlining the plan to reopen, the new regulations that will be in effect at the club, and the overall, continuing finances of the club should be part of weekly updates.
Zoom or Skype meetings with stakeholders should be held at least twice a month, if not more often as the facility moves through the CoronaVirus era and looks to reopen in the coming weeks and months. Newsletters via email, communications via text and letters and cards through the old-fashioned “snail mail” can play a part as people are stuck at home. These communications should focus on how you are looking to safe-guard the facility, the members, players and staff members, along with protecting the stakeholders value.
Both club managers and department heads should be at their home desks with the phone nearby. It’s reassuring for members and staff to know that you are on the other end of the line or email message. And, even though you might not hear from them, they’ll realize and understand that you are there providing a service. It creates value for you, for the club, for the program and club staff.
Positive communication with staff is essential in these times to keep morale high and to lead staff thoughtfully and effectively through a crisis such as Covid-19. Questions to be prepared for are numerous and your plans for restructuring your club’s staff must be solid with a mind to possible future changes given the fluid situation. But we believe in numbers – studying the numbers and reports over the past 12 to 18 months should help you decide how to move forward looking at a possible reduction in revenues up to a possible 30 percentage points in the coming 12 to 18 months.
As a club manager or governor, this is the opportunity you have been waiting for. This is the chance to make that professional who is not at the top of your list a part-time or seasonal employee, saving you 401k matching payments, healthcare and other benefit costs. This is your chance to move up that instructor who has been grinding for you with the 10 and under tennis players on the back courts to a more senior position and to create more club revenues by renegotiating that individual’s contract while at the same time lifting that instructor’s pay scale. Everything can be done and restructured under the “guise” of Covid-19
With all that is said about keeping jobs, we all know what is coming after this unexpected cessation of trade: Restructuring. And for those governing boards, general managers and club managers, this is, however you look at it, your chance to weed the wheat from the chaff.
As we all look forward to a new trading opportunity after being shutdown through lockdowns, the realization that a club could possibly save more money closed than as a going concern came as a surprise to many. With or without member refunds, driving down the costs of personnel, letting those instructors go who are on higher salaries or stipends, and perhaps looking at cross-training some positions, is all something each and every club and facility should not just be planning, but doing.
In the short term, any club or facility must maintain its staff. Do remember, in addition, that there is basically a stoppage of all legal immigration through at least June 23rd, which means that any H-1B visas and foreign temporary workers are not going to be here through the summer season. Summer will be affected for those seasonal clubs, but this too is a chance to restructure looking toward Summer 2021. Being flexible with staff is key.
With those foreign, temporary workers requiring replacement, the PPP loan or EIDL and Small Business Administration grants, can be used as a short-term method to keep the department or facility in line and ready. The upward revenue curve following the height of the crisis will be slow and proportional, and in line with CDC guidelines. This extended, slow rebuild is a club’s opportunity to effectively restructure. This period should give us some clues as to the long term cash flow and revenues over the next 12 to 18 months. We outline below some ideas that should be discussed as reopening starts to occur.
Flow Charts – this is your chance to reset reporting structures. Ensure, for example, that the holdover pro who has remained outside of management and supervision for the last 10 years shall now report to the new Director of Junior Development. And enforce that new structure upon opening.
Reporting structures should be updated and formulated to new needs. Weekly reports should be required from all instructors and directors to club management detailing new membership drives, communication with non-active members, new and possible revenue streams and conflicts between staff and members. These reports should follow the organizational flow chart: i.e. junior instructors report to Junior Director who in turn reports to Director of Tennis who then reports to the General Manager.
Seasonal Positioning and pushing year-round staff members to a seasonal contract could be highly useful. Not sure where and when CoronaVirus will leave us, and where there are seasonal differences in revenue streams, it’s essential we look at those revenue curves weekly in terms of staffing. Shortening the season for the summer might save clubs over-paying for staff when members might not be present due to local rentals being curtailed. It’s also an opportunity to make year-round staff seasonal aimed at the peaks of member usage, saving on 401k and healthcare costs.
Restructuring 1099 Contractors
We have long been advocating a revision in straight hourly rates for 1099 instructors. As we work with clubs, we look to create incentives for your instructors.
Rentals versus Hourly Rates: With fixed income from club departments becoming essential in recovery, why not charge fixed rentals (as do corporate gyms with their personal trainers who are 1099 contractors) and split that rental revenue between the club (75% and the Director 25%). Once the rental is reached, 100% of revenues could go to the 1099 instructor. This model creates massive incentive for instructors to teach both private sessions and groups as well as club-based programs. But more importantly, it guarantees a fixed revenue from all instructors to the club.
Create incentives for directors and instructors favoring group and clinic teaching over private lessons on the courts or sessions on the gym floor. This will help rebuild the group teaching ethos as we are forced to social distance. But more importantly, it will grow revenue for the club immediately upon reopening. Remember, private lessons and sessions conducted by junior staff don’t really add to club or director revenues in a major way.
Cuts to compensation and reduction of staff
We all know that staff will not look exactly the same as we come out of the pandemic work stoppage. This is not a time to worry about personal relationships with staff. Staff are looking to safeguard their career and might make a move before your plan is initiated. A staff member, who may have been at the club for a very long period, might be forced to have a salary reduction in order to retain his or her position. Given that we will see an estimated 30% drop to most, if not all club and facility revenue streams, cutting salaries and related costs are essential. Perhaps set goals for these long-serving staff members in order to regain their salary over a two to three-year period to show that the club values their work. At the same time, communicate that many staff are being forced to accept a pay cut or have fewer scheduled hours as we rebuild slowly.
This is a time to make wise business and economic decisions. Study past revenue streams and pro-rate those streams accordingly as we rebuild. Budget conservatively and study the economic comeback locally and nationally as the virus is not uniformly affecting the nation. Use this opportunity to shed non productive staff while creating incentives for valued staff. No one is expecting staff to look exactly the same after the biggest economic crisis since the Great Depression. Use that belief to bring back your club with better staff, leaner departments, and a higher value to member services.
Ed Shanaphy is President of BeyondTheBaselines.com, a subsidiary of SBW Associates, Inc. He served for 17 years as Managing Director and Chief Executive Officer of Haysbridge (UK) Ltd, a marketing and advertising international conglomerate, operating in 16 countries with offices in Dublin, Ireland and Sydney, Australia with head offices in London, England. BeyondTheBaselines.com is a US-based consultancy which aims to bring additional resources to governing bodies and general managers and has some of the most elite country clubs in the nation as clients.
At a country club, a Director of Tennis sees the members that come to the club on that day. At a Home Owner’s Association, every member sees when the Director arrives in the morning, when he teaches, whom she teaches, and when the Director leaves for the day.
Tim Clay, Director of Tennis at Stillwater Tennis in Naperville, IL, takes us through a normal day at the his home owner’s association. Tim is a great pro, but a true business man. Tim runs a business. “I’m neither an employee nor an independent contractor,” pronounces Tim. He’s right. As a full corporation with various interests, he is simply a corporation with a franchise at an HOA. Fortunately he has his M.S. in Management. “But, I’m always learning.” He has built a program that has over 90 percent prepayment and preregistration all through credit card usage.
Tim has been coaching tennis for over 20 years. Illinois PTR named Tim their Member of the Year for 2 consecutive years in 2019 and 2020. His program at Stillwater is one of the bright lights in the region.
HOA Politics and Resale Values
Whether dealing directly with residents or through a Community Association Manager or management firm, Tim has found the right method of navigating through a situation that is rife with politics. How can it not be where each member is on property all the time and each decision Tim makes could affect property values? Tim discusses how he has grown into the job and learned the differences between being a country club professional and a Director at a large HOA.
Being a Director of Tennis combines many skills, including being an information officer for your membership. Andy Zodin regards his seasonal summer job as a year-round gig in which he services and caters to his membership, providing information throughout the year.
Zodin, President of the USPTA Inter-Mountain Division, is our guest during one of the hardest-hitting weeks on our country and our club industry during the Covid-19 pandemic.
Andy calls himself a Director of Information. He works with his members throughout the year facilitating league play and winter instruction even though his position is really a seasonal one. Although the members only see him five months a year, his position, as he believes most seasonal jobs are, is a year-round position with a 12-month informational and member services role.
Andy has been a teaching professional for over 30 years and is currently the Director of Tennis at Columbine Country Club. His views on the club and facility business and how the USPTA and USTA are moving forward in the industry are truly well-rounded and insightful. Relying on his many experiences in our industry, Andy paints a picture of an industry which plays second fiddle to golf at most clubs, but is growing and maturing in its own right.
Why ATP Tour Pros Often Fail as Directors of Tennis
Andy has seen ATP and WTA Tour professionals both succeed and fail as Directors of Tennis. He points out why some of the greatest players in our game are unable to become a good teacher, instructor, Head Professional or Director of Tennis and outlines for us the reasons why many great players simply never make the transition to teaching professional.
We receive a behind-the-scenes view of how Andy runs a program with 200 juniors across seven outdoor courts in Colorado. Learn how he keeps his eye on the adults by not only providing a wonderful on-court program, but also a complete tennis experience with trips to Indian Wells and other tennis events for his membership.
Andy is a wonderful radio personality himself. At kickserveradio.com he has built a solid audience of listeners. He has interviewed some of the greats of the game on both the playing and teaching side. Andy’s ability to touch on the topic of the day facing the industry is pointed and he maintains a vibrant energy both on the radio and in the industry.
One of the methods used to attract a great Director of Fitness or Tennis is to guarantee a certain amount of on-court or on-floor teaching revenue during the first year. It shows that the employer is truly behind the hire and understanding of the ebb and flow of teaching revenue streams. But, given these times and the fact that Covid-19 might rear its ugly head again and again, is it a possibility to have annual guarantees after the first year? Let’s have a look.
When a long-time department head leaves or is asked to leave the position, it is always an up-ending event for staff, membership and club management. The search for a replacement is usually rife with politics. If the director had left unwillingly, there are always those members who feel the outgoing director was treated unfairly and band together to create a group to better make their voices heard against the powers-that-be.
To push through this transition time, often, a club or facility will guarantee a certain figure for on-court or on-floor revenues for the incoming director. With members perhaps not happy how the previous director was treated, staff leaving without a leader or a department, and club administration helpless against this void, an incoming Director has to tread lightly and understand the forces within which he or she will be working.It’s a time of transition for staff, members and club administration.
Ladies team players will be asking the new Director of Tennis to look at their games and move them up to a new team. Yoga class participants will want a different instructor and ask to have the current teacher replaced for one of their own liking. Directors of Tennis and Fitness starting a new role are ambushed from the first day they set foot on property. Clubs and facilities, realizing this, will average yearly revenue streams from the previous director and guarantee those to incoming directors. Guaranteed revenues can replace lost revenues stemming from spiteful members or hanging resentment, which can quickly deflate teaching revenues.
Because of factors such as these, it can take years for a newly hired director to “build a book.” Building a book is a combination of three variables: Trust with a client base, instructional knowledge, and time. With this in mind, many facilities, knowing that the first year, or perhaps two to three years in extreme cases of member strife, guarantee teaching revenues to a new hire. We have seen figures ranging from $25,000 to over $100,000 in guaranteed instruction per season or even higher if a year-round position.
To describe how the guarantee works is simple: Whatever the director doesn’t receive in either his or her own personal instruction and garnered from percentages from assistant instructors is “made up” to a certain value by the club or facility. For example, if a guarantee of $100,000 is made to the new hire, if that new hire teaches $60,000 and garners $20,000 from retained percentages from assistants, the club would be on the hook for the final $20,000 to complete the $100,000 contractual guarantee.
We have long advised candidates, when receiving a guarantee, to negotiate a longer term guarantee. We advise to taper it down over three to five years. For example, if a new Director is offered $100,000 of guaranteed instructional revenue for a summer position by a club in the first year, we advise that over five years, a guarantee should be offered but tapered down, say, 20% each year. Therefore, the fifth and final year would have $20,000 guaranteed to the Director. By the fifth year, often, the salary or stipend which has been raised each year through negotiation, can more or less replace the guarantee once the club or facility knows the value and worth of the new director.
A guarantee can work well for both parties of a new contract. A new director realizes the club or facility understands the undulations of revenue streams and is more attracted to an offer that caters to these factors. The facility can attract better candidates while at the same time use the stipend or salary as a replacement for the guaranteed revenue as trust is built between the director, the board and administration, and the members.