With the current state of the economy and new competition continually entering the market, it is more important than ever that you make careful, cost-effective choices when embarking on a major renovation project.
Here are seven steps to help you make better renovation decisions:
1. Begin with the end in mind. Prior to beginning any renovation project, you should have a clearly defined vision and plan for the end result. Ask these questions: What are you going to build? Why are you spending the money? What are your key objectives for the project? What deficiencies are you trying to remedy? What new market segments are you hoping to attract? What do you seek visually from a newly renovated facility?
Survey your membership to determine what they want most from any new spending. Club owners often mistakenly think all members feel the same as they do about changes and improvements. Search industry publications and the Internet for the latest renovation trends, including design, sustainability and functionality. Schedule on-site visits to clubs or other businesses that recently have added similar facilities or renovations.
2. Develop an operating pro forma. The proposed changes should demonstrate a clear financial benefit. What will the project mean for the financial performance of the club? Will it lead to new memberships, and if so, how many over how long? Will it contribute to membership retention, and if so, to what extent? What will this mean to club revenues and expenses?
3. Establish the project budget. In the early stages, the cost may be difficult to decipher, but you should know what you can afford, and you should establish budgetary guidelines early. Failure to do so could result in architects and consultants running up fees exploring design options and using up valuable time.
It is always better to be conservative with cost estimates and include a reasonable contingency amount to cover likely change orders or unexpected cost overruns. In most instances, renovation projects should include a 10 percent to 20 percent contingency amount.
4. Assemble the right team. Select the architect, consultants (mechanical/electrical/plumbing, programming experts, construction manager if appropriate, etc.) and builder. In many cases, you may simply bring in contractors and consultants that you've used previously. If not, you should establish the criteria for choosing each of these key experts and then go through a thorough review process. Although time consuming, this effort will serve as an excellent learning opportunity for club owners and managers, as each candidate presents its approach, cost estimates, etc.
Include your club's key maintenance/engineering manager so he or she has firsthand knowledge of the entire project. The manager can spot implications for future maintenance of the new facility. In addition, have the selected team members visit or view photos of facilities that best represent the desired look and feel.
5. Document the plan. Document every detail with renderings, construction drawings, budgets and the project's critical path. All decision-makers should review and sign off upon acceptance of these documents prior to pushing the “go” button. Failure to do so usually results in unnecessary re-work, related costs and aggravation from all parties concerned because of false starts and excessive change orders.
6. Ensure adequate supervision throughout the project. Assign representatives from the architect and club ownership and make them accountable for regular inspections of the work to ensure that key details are appropriately handled.
7. Establish weekly project meetings with team members. In these meetings, review all aspects of the project as construction proceeds. Have an agenda and formal minutes to ensure all key decisions and course corrections are documented for future reference.
Following these basic steps will ensure that you end up with a finished product that achieves your vision while being on time and on budget. You also will find that the relationship with your consultants and contractors will remain positive throughout the project.
Herb Lipsman is president and CEO of The Health Club Co. (www.thehealthclubcompany.com), a firm specializing in consulting and management services for the design, development and operation of upscale sports clubs, fitness centers and spas.