This paper outlines the strategic direction for the Narrabeen RSL Memorial Club (the Club) in the next ten (10) years.

 

The Club operated as a losing concern for several years in the 1990s and it wasn’t till 2003 that the Club performance turned around and now operates as in a profitable way – see Attachment 1.

 

The Club is now a going concern with the potential to regularly make an annual profit of approximately $150,000. However, in order to maintain this profitable performance, it is important that there is close management of the key operating areas of the Club. For instance, experience has shown that close and ongoing attention is needed to cash handling and stock control.

 

It is equally important that staff give attention to detail in the operations of the Club, including maintaining service levels and the state of cleanliness of the property.

 

This Business Plan assumes the “knife-edge” management outlined is regularly practised as a fundamental to success.

 

The Club has an existing membership of approximately 1700 people, but the potential is there to increase this number to 2,000 over time. To obtain this increase in membership, the Club needs to provide added services and improved comfort without losing the geniality of the Club. Such improvements will, in turn, attract additional membership which in turn will produce increased profits. It is estimated that at a membership of 2,000 the Club can make a profit of $250,000 to $300,000 per annum.

 

In summary, the improvements need to focus on good product and good service. Good product in terms of chilled beer and a variety of quality wines and other drinks; an ongoing variation of gambling facilities; a wagering facility that encourages increased usage; and, a restaurant offering quality meals at family budget prices.

 

Good services in terms of prompt and friendly delivery of service; ensuring the good behaviour of members and guests; and, staff prepared to undertake a multitude of tasks to maintain quality service to the customer.

 

Entertainment is an added specialty. However, it is evident that the existing patronage of the Club is more inclined to attend the Club for the company of friends and a quiet drink rather than the incidence of entertainment. 

 

This is not to say that entertainment is not a feature for the Club; indeed, special events, such as Melbourne Cup Day, Anzac Day, Xmas In July, Sporting Dinners and the like have all proved to be popular. But, at this time there is limited demand for a regular entertainment program.

 

The focus for the Club, therefore, is to progressively upgrade facilities with the objective to create an improving image – an image of a modern and comfortable Club with good services and a friendly environment.

 

Such a step need not be a major one, with the intent to progressively upgrade the down-at-heel furnishings, repaint the populated areas of the Club and maintain the premises and surrounds in a clean and fresh state. These conditions alone will add to the friendly environment that the Club attempts to achieve.

 

In the short term the key message is “Do it Now”. Don’t wait till the problem or the opportunity is outdated. Attend to the issue immediately and the action will be noted.

 

In the scenario outlined above the Club’s Mission Statement could be described as:

 

“To be the first choice Club for people who are seeking to enjoy themselves in a comfortable and friendly environment”.

 

 The aim of the management and staff is to make this happen everyday.

 

 

 

 

The Narrabeen RSL memorial Club is a Club with potential for growth in membership and profitability. However, it is a journey that needs to be taken gradually with re-investment occurring to the extent that the Club can afford.

 

The Club has no real collateral albeit the poker machine licences have a value. Nonetheless, it is unlikely this form of collateral is enough to encourage a financial institution to lend the Club large sums of money. At best, the Club could hope for a moderate overdraft of about $50,000.

 

In other words the Club is not in a position to go into debt and any improvements must be paid for as the Club progresses. In one way this is a rational way to progress with development occurring in an affordable way. On the other hand, progress will be slowed by the gradual performance of the Club.

 

The Clubs current position is that  the trading profit for the year will be approx $20,000.

 

There are immediate opportunities for these profits to be used to upgrade Club facilities – see Attachment 2. Indeed, this is the first step towards lifting the comfort and image of the Club. It is noted that small changes are noticed by members and guests, probably as a result of the few positives changes that have been made over many years.

 

Attachment 3 is a summary of the strengths, weaknesses, opportunities and threats facing the Club in the near-term. The strengths focus on the existing friendly environment and the peacefulness of the surrounds. The opportunities focus on an improved image with the potential to attract more people to the Club notwithstanding the relative isolation of the Club.

 

The Narrabeen RSL is not the only Club situated away from the traffic flow. Forestville RSL and Pittwater RSL are two nearby Club situated away from the thoroughfare, and both these Clubs have progressed over time despite their “isolation”. Both Clubs now offer the services of a Courtesy Bus but this was always the case. This Club grew over time as they improved their services to members and guests.

 

 

The market research undertaken on behalf of the Club in 2004 indicated that there was a potential local market for membership of the Club in the age bracket of 35-50 year olds. This age group describes the family population in the local area – an age group which was once the foundation membership of Narrabeen RSL Memorial Club.

 

The market research suggested that the wheel may have turned as more of the younger demographic group moves to the area. In most cases, these younger people are the children (or grandchildren) of people who have lived in the area all their adult lives.

 

Indeed, if one visualises ten years ahead it is more than likely that many of the older fibro, timber and cladded houses in the Narrabeen, North Narrabeen, Warriewood and Elanora Heights areas will be replaced by smaller properties amongst which could be town houses, units and more compact residentials.

 

In other words, the Narrabeen RSL Memorial Club will be located in the centre of this residential development.

 

Looking into the future, there are three clear options available to the Club:

 

This is not a real option. To do nothing means the Club will slowly go into demise, as it was heading in the 1990s.

 

If anything is clear it is the fact that there is a need for change.

 

This is a practical alternative in that as the Club improves in financial terms, facilities are upgraded and with it the image of the Club.

 

There is no short-term risk in this option, but the longer term risk is that the alternative relies on the continued association with the Narrabeen RSL Sub- Branch.

 

 However, it is more than likely that in time the membership of the Sub- Branch will decline, probably to the level where the Sub-Branch is no longer viable standing alone. At this time, the association with the RSL Sub-Branch is likely to change.

 

Given the Narrabeen RSL Memorial Club has a long-term future, it is important not to rely upon the existing arrangement with the Sub-Branch because it is likely to change over time.

 

In the period of the next ten years approximately 75% of the RSL Sub-Branch membership (around 45 members) will be more than 90 years of age. The remaining membership will be in their late seventies to eighty years. There is a high probability that by 2017 some 75-80% of the current membership will not be in a position to participate as members of the Sub-Branch.

 

If this is the scene then there is a likelihood that the Narrabeen Sub-Brach will need to merge with another Sub-Branch or wind up operations.

 

In any event, the likelihood will mean a critical change to the operation of the Narrabeen RSL Memorial Club. The worst case is that the operating Club is also wound up because the landlord no longer exists.

 

This is a likelihood that the Club has to take into account. In this regard, one prospect is for the operating Club to purchase the land and property currently managed by the Sub-Branch. The purchase could include cash at a notional price; even an equity holding on the part of the NSW RSL.

 

Alternatively, there is the option of a long-term lease with the NSW RSL with the provision for the construction of a new club premises sometime into the future.

 

In any event, it is imperative that the performance of the Club in the next several years evidences that the Club is able to maintain the profitability of the business.

 

 

 

The Narrabeen RSL is currently operating at a reasonable profit and has the potential to continue to operate as a going concern.

 

With ongoing profits the Club will be in a position to progressively upgrade the comforts, services and facilities for members and guests. In turn, offering a more positive image and attracting more people to the Club leading to increasing profits.

 

This scenario can go on so long as the Landlord continues to operate in a way that protects the tenancy of the operating Club. However, this position cannot be assured in the longer-term.

 

The more likely situation is that over time and, say, after ten years, there will be insufficient RSL Sub-Branch members to sustain the Narrabeen RSL Sub-Branch standing alone.

 

Whilst the operating Club can continue to trade in a profitable way and make improvements to the facilities, it is appropriate that the Club prepare for changes in the way the tenancy of the premises is currently provided.

 

Despite the attraction of a Steady as She Goes plan, as a going concern, it is necessary that the Club look beyond the next 10 years and commence now to prepare for the changes that are likely to occur.

 

In the light of this probable scenario, the following recommendations are made:

 

It is recommended that the Club progressively undertake improvements to the facilities of the Club (some of which are specified in Attachment 2) in a way which is affordable to the Club.

 

That the Club continues to maintain a cash holding of $250,000 augmenting this sum by at least $75,000 a year. On this basis, the Club can accumulate approximately $400,000 by the end of the 2009/2010 year.

 

In this way the Club will establish collateral for any future borrowings for major works.

 

The Club to continually upgrade the premises making provision for major changes to include:

·        Extending the Foyer

·        Developing an Island Bar between the Mixed Lounge and the Poker Machine Room

·        Upgrade of Mixed Lounge providing for new furnishing

·        Upgrade of balcony to provide undercover comfort for members and guests

·        Extension and refurbishment of Auditorium/Dining Room – this may require the relocation of the snooker tables.

 

 

The Club will continue to accrue cash holding at the rate of between $70,000 and $80,000 per annum (after ongoing improvements to facilities). At this rate the accumulated funds at present value is estimated to be approximately $850,000 as at the end of the 2016/2017 year.

 

This cash holding will form the basis for the proposed acquisition of the property utilised by the Club in the course of business.

 

Beyond ten (10) years offers the opportunity for the Club to use the property as collateral for the development of new premises for the Narrabeen RSL Memorial Club. The Club will have been developed as a specialised community Club readily available to the local population and providing quality services on a smaller scale to the larger Clubs, but targeted towards a close-knit and friendly environment.