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November 2017

Trial and Error

trialanderror.jpg‭Bob MacCormack spent his first four years in golf sinking money into his courses then trying to figure out how to get it back. Now, the former plumber knows what he’s doing, and he’s reaping the benefits

Losing money is easy. And for people of means, there are plenty of ways to lose a lot of money, virtual fortunes by most standards. But few ventures can burn through a bank balance quicker than racehorses and golf. Not that either is a bad business, but both are bitterly cruel to the novice.

That’s a lesson Bob MacCormack learned early in his second career. A successful commercial plumbing contractor in New England, MacCormack did well financially while longing to do something more with himself as he reached middle age.

“I invested in some car washes and other things,” MacCormack recalls. “My son was running the [plumbing] business, so I was looking for something that piqued my interest. Then, a friend came to me and said, ‘There’s a golf course going up for auction. Do you want to buy it with me?’

“We’re both avid golfers and I thought that might be fun,” he says. “So, we bought Ridgewood Country Club (in Moultonborough, New Hampshire) in 2001. It was a 9-hole golf course in the northern region of Lake Winnipesauke. We bought and ran [the club] as a hobby. Shortly after that, we bought the property next door and converted it into an 18-hole course.”

That’s when MacCormack learned what a sinkhole the golf business can be. “We came into that first golf course and my accountant said to me, ‘If you’re running a business more than three years without making money, it’s not a business, it’s a hobby.’” Ridgewood turned out to be an expensive hobby. Building an additional nine holes while learning the ins and outs of club operations cost a lot more than MacCormack expected. “But our philosophy from the beginning was to provide a better product and do the things that our members wanted,” he maintains. “We did sink too much money into the place, but it was our money. Nothing was financed. So, you learn a lesson and move on from there.”

Moving on wasn’t immediate. MacCormack had no plans to become a multi-course owner, and Total Golf Management, the company he now owns, was not even a thought. He ran Ridgewood Country Club for eight years, learning from his mistakes and immersing himself in the minutia of mowing heights, pesticide applications, hardgood costs and golf cart maintenance. Then, the Great Recession of late 2008 hit, and MacCormack, debt free and much smarter about the golf business, saw a plethora of opportunities.

“So many of the courses were just carrying too much debt,” he recounts. “Everybody was looking at the Tiger Woods era and thinking the golf boom would never end, but, of course, it did. And the courses that were leveraged obviously struggled.”

One of those courses was Canterbury Woods in Canterbury, New Hampshire, about 40 miles from Ridgewood and close enough to Concord that the demographics looked great even if the economy didn’t. Like so many courses during that time, Canterbury couldn’t service its debt and cover operating costs. But with the economies of scale from his existing facility, and the fact that he could pay cash, MacCormack thought Canterbury Woods made too much sense to pass up. So, he bought it and, in his words, “we operated it at a profit the first year.”

As a multi-course operator, MacCormack realized the advantages of scale. Membership (all his courses operate as semi-private clubs) became more attractive with a reciprocation option, marketing and administrative costs could be spread out over two facilities, and outing business was easier to sell and justify because he could simply move play between courses.

Those advantages were magnified in 2011 when the members at Pembroke Pines Country Club, located 12 miles from Canterbury Woods, between Concord and Manchester, approached MacCormack about taking over their club.

“They were in trouble,” MacCormack says. “They came to me because they loved golf and loved their course but they didn’t know the business.” After a decade of trial, error and acquisition, the former commercial plumber did know the business. So, he purchased Pembroke Pines with the understanding that he would convert it from a private to a semi-private club. After making extensive renovations to the course and club, Pembroke Pines is “doing very well.”

“Now, golf is a money-making venture for me,” MacCormack says. “The first four years, we put money in and then tried to figure out how we were going to get it back. Now, we know what we’re doing. We’ve more than doubled our membership in the last two years.

“Our strategy and our mission is to always keep our products better than [the products of] the competition,” he adds. “So, we’re constantly reinvesting in our courses.

“People join because they see the investments and the improvements that we make,” he continues. “We take one course at a time and do some work, and we use the cash flow from the other courses to pay for the capital improvements and operational shortfalls at the course we’re upgrading. Then we do the same with the next course and the next, each time having the other courses shoulder the shortfalls of the one being improved.”

MacCormack is still on the lookout for courses to add to his portfolio. But it’s no longer a hobby. He’s now officially the owner of a thriving and profitable business. And what was the biggest lesson he learned from his foray into this brave new world?

“You can’t operate in the golf business if you’re carrying a lot of debt,” he believes. “I’m sorry, but if you’re leveraged, it just doesn’t work.”

Steve Eubanks is an Atlanta-based freelance writer and New York Times bestselling author.

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