Budget 101: It’s all about the money
Adobe Stock, Rawpixel.com

Budget 101: It’s all about the money

Brush up on budget planning with legendary turf leaders in the first part of a series bound to add to your financial acumen.

Subscribe
October 14, 2020

During his first year at Merion Golf Club, Matt Shaffer operated the esteemed East Course with a $1.2 million budget. This was 2003, a little more than a decade before the course welcomed the world’s best for the 2013 U.S. Open. This was a lot of money.

And still, Shaffer missed the budget.

Well, to be fair, missed is a little inaccurate. Whiffed is probably a better word. Blasted right through, maybe, if you prefer phrases.

“I missed it by $600,000,” he says. “Let me tell you, you want to see some pissed-off people.”

The next year, Shaffer entered the annual budget meeting to find a smile across the face of the board president.

“‘Matt,’” Shaffer recalls the dialogue going. “‘You’re going to be the happiest guy in the room.’”

“‘Why?’”

“‘Because we gave you $450,000 more than last year.”’

“‘Then I’ll be the second-happiest guy in the room.’”

“‘Why’s that?’”

“‘Because you’re going to be the happiest. This year, I’m only going to miss the budget by $250,000!’”

Shaffer pauses. “He did not see the levity in that remark.”

There was no more important stretch on the calendar for Shaffer than the five days every year when he would defend his budget to the board. No matter how smart, how focused, how accurate, how lucky he and his crew were the other 360 days out of the year, if he failed during those budget battles, the season could become a lost cause.

A former Merion employee once told Shaffer that he “got ruthless at budget time.” “You’re damn right I did,” Shaffer responded. “My ability to succeed or fail isn’t predicated on my ability, it’s predicated on the funds you allocate.”

Shaffer is still talking about money today, more than three years into retirement, but he is doing so far more often on Twitter and LinkedIn, not in front of boards. And his lessons are as valuable as ever.

 

You have to treat that money like it’s yours. You have to be able to manage the money, and I think it’s particularly difficult when you’re young. You just don’t know what you’re doing.

We don’t really have our industry quantified very well. How much does it cost for every inch of green speed on bent, Poa, Bermuda? What are the repercussions financially to drop your fairways from three-quarters to a half-inch? A guy just starting a job probably doesn’t know. My advice for a young guy just starting a job: find the oldest, crustiest, successful superintendent in the area and call him. “Mr. Williams, can I talk with you? I’m trying to do my first budget and it’s critical. I need some insights.” Buy him lunch, you’ll learn a ton. That guy’s had his shield up for 40 years. It’s tough when you’re young.

I was stupid. It took me until I was about 38 years old to figure out it’s easier to find a round peg for a round hole rather than pound a square one through it.

You have to get good at budgeting. And if you’re not good at budgeting — you’re not good at math, you’re not good at accounting — then hire an assistant who is. I’d pay somebody $5,000 out of my own pocket if I knew they could get me $200,000, because it would make my life easier.

I always say the best superintendents in America are the guys who don’t have any money, because they can’t afford to make a mistake. One spray mistake will chase their (behind) right down a whole budget cycle.

When you’re young and most vulnerable in the business, you should hire an old superintendent. Look for a guy who’s getting ready to retire and hire him as your assistant. He doesn’t want your damn job — he doesn’t even want his job. He doesn’t want to deal with the politics, he doesn’t want to deal with the GM, but he’ll share every insight he knows with you because he wants you to succeed. And there are a bunch of guys like that.

It’s critical to learn how to buy. So I hired a guy, Dave McDonald, and I called him my project manager. He bought all our materials, but he was way more than that. His focus was Merion Golf Club business. He had been a manager for a casino, so he was really, really well-rounded and a really smart guy. And he was tough. And the bigger your club, the more you can delegate.

I had another guy, Dave Pepfield, wonderful guy, and I made him our agronomist. He was always looking for disease, a great resource for interns. He was checking everybody’s math and he was teaching them. That’s the beauty of having a big job — you have lots of layers of protection but it costs money. It costs a lot of money.

A superintendent ought to set up their staff like the clubhouse sets up theirs, and I don’t think you’d ever lose this argument. They have a GM, you have a director of grounds. They have a clubhouse manager, you have a superintendent. They have an executive chef, you have an equipment manager. They have a maître d’, you have an equipment tech. And just keep on going, and if they have a wait staff of 60, you can go one better and say, “I only have a crew of 30.” But I don’t think guys think that way.

My job at Merion, quite honestly, was course conditions and politics. Of course I missed the agronomics, but the difference between failure and success was winning in the boardroom.

Politics are impossible to teach.

I think it’s the hardest part of the job, communications and budgeting. Growing grass is a cinch. People lose grass, wooooo, unless you had a catastrophe beyond your control, you’re in the wrong business. A lot of people lose their job because of their inability to communicate.

Don’t get emotional over this. Treat it as a business deal.

It’s all about the money.

Matt LaWell is Golf Course Industry’s managing editor.