Walking into their brand new club for the first time is a great experience for the club’s members. Doing it knowing there is ample cash in the bank supported by diversified revenue streams is even better. But what strategy could your club adopt to achieve that without taking huge risks?
We’ll get to the answer in a moment but first here’s a question for you. Would you sell your car for a price chosen only by listening to the first one or two people that make an offer? You’d probably say “No way!”. You would want the full price for your car, not the price buyers try to get away with.
Well something similar happens with club property. Plenty of clubs have negotiated deals with developers without knowing the full value of their development potential and unwittingly gifted a developer millions of dollars in the process. This is the primary cause of the club property development tragedies we’ve all heard of.
We know from experience that this issue is completely avoidable. The golden rule if you want best value for your club is you need to know what your club’s development opportunity is worth to developers before dealing with any of them.
A similar issue is there is usually a big gap between the developer’s knowledge and expertise and the club’s. Developers cleverly use this information imbalance to take advantage of clubs.
The good news is the solution is quite straightforward. You need to have a well planned property strategy so you understand the development potential of your club’s property before dealing with developers.
We saw these issues so many times we developed our Club Property Strategy report to help clubs successfully negotiate their property challenges and achieve their goals, which often include a new club, cash in the bank and diversified sources of revenue.
Our club clients will tell you that club property strategies have really helped them because:
- A strategy reveals the development potential of the club’s property so the club knows the full value it has to work with.
- A good strategy overcomes the classic mistake of dealing with developers without being fully informed, allowing the developers to have a commercial advantage. Having a properly prepared property strategy means that you have the same knowledge as a competent developer and your club can negotiate from a position of strength.
- They greatly improve communication about property issues. They give the board and management the knowledge to communicate more effectively with each other and with the members about property plans and issues. An improved ability to communicate the merits of the board’s adopted strategy greatly increases the chances of support and acceptance by the members.
- They involve an expert looking at your club’s property specifically to find opportunities for upside for the club. This also involves hunting down hidden risks for you and advising you about how to manage or eliminate the risks.
- A strategy is a great way for a board to demonstrate the probity of their process. If ever the process was re-examined later, having a properly prepared property strategy to refer back to contributes to demonstrating that the process was well managed.
- A good strategy can make and or save your club millions of dollars, so the price of a strategy is easily shown to be good value for the club.
To learn more about successful, low risk club property strategies please contact us on 02 9966 8898.