Scary Success

Scary Success

When John Neal read the two-inch thick business plan for the golf and country club he was running in 2007, he analyzed a model he believed was doomed to fail.

Neal also thought he had some good ideas about how to save the club, University Park in Sarasota. As confident as Neal was however, he was still plenty worried about the risk he was undertaking in revamping the club.

For starters, the gist of the first step of the plan was to pay back the club's 600 or so equity members a total of $8.5 million, averaging out to between $30,000 and $50,000 per member. Neal, an executive with Neal Communities, a Lakewood Ranch-based homebuilding company run by his father, Pat Neal, split the reimbursement costs with his partners in University Park.

Past that, Neal would have to reinvest in the club to make the move from private to semi-private pay off. He also would be selling golf club memberships in an economy that has only gotten worse in the past 18 months.

Says Neal: "It was really pretty scary."

That fear has since given way to some fearsomely good results. The club brought in 88 new members in 2008, bringing the total to an all-time high of 800. Plus, it increased revenues in the country club restaurant by 30% last year. The golf and country club, which Neal runs in addition to his responsibilities with Neal Communities, is even hiring more staff for some positions.

"We are growing, which is pretty crazy," says Neal. "We are taking advantage of little niches where our competitors are struggling."

To be sure, the national golf and country club industry is hurting and the Gulf Coast has felt its share of the pain. Several clubs from Naples to Clearwater have closed or significantly scaled back during the downturn.

But a few entrepreneurial club owners have decided to shelve the old business model, which focused on giving out equity stakes in return for high initiation fees.

The new model focuses on a simpler, less financially cumbersome plan built around growing the membership base at smaller increments. The owners of the Old Corkscrew Golf Club in Estero, for example, have had some success in selling memberships under this new semi-private model. (See the Review, 12/19/08.)

Neal says the old model doesn't make sense for today's golf club customer. That style of customer, says Neal, is someone who doesn't want to have a wad of cash tied up in one golf club. But that customer still wants to have the elite golf and country club experience.

So in addition to rewriting the business model for University Park and paying back equity members, Neal also reinvested in the club's facilities. A new membership model wouldn't be enough to turns things around, Neal believed, at least not without an improved club to go with it.

Changes to the club, which is about three miles west of Interstate 75 on University Parkway, include new maintenance equipment purchases, a renovation of the driving range, a locker room makeover and even new golf carts.

And in a detail-oriented move Neal picked up from his father, who is well known for details in his housing communities, University Park even upgraded the merchandise lines it sells in the pro shop. It also upgraded the menu of its restaurant, as Neal hired a London-born, New York-trained chef to run it.

"The way to build a golf club business is no secret," says Neal. "We just provide top of the line service in a format customers want."

-Mark Gordon