How to Save Money on a Club Fitout

The General Manager of Broken Hill’s 110-year-old Barrier Social Democratic Club thought she had seen it all after 18 years with the club, but when a builder knocked back a $2m job and proposed a $500,000 alternative she was gob smacked.

Karen Howe said she has never experienced a supplier like Merlot Constructions and wished she had found them during the club’s dark days after they came out of Administration.

Karen, who has served variously as the club’s Finance, Gaming and Assistant Manager, said Merlot was recommended by the club’s financial adviser who believed that a specialist club industry builder could bring more far than design and building skills to the project.

At the time Karen and her Board had pretty much decided it was time to commit funds to the dining room, function area and an outdoor area.

Merlot’s Managing Director Peter Deall travelled from Sydney to Broken Hill, took one look at the club and the proposal that he ball parked at around $2m, and immediately suggested a cheaper alternative, one that he believed would actually fund the desired renovation.

“Peter recommended that as our gaming revenue was climbing, there would be huge benefits in enlarging our small outdoor smoking area and utilising it for gaming. He put that cost at around $500,000,” Karen sad.

In addition, Merlot indicated they were more than happy to merely design the area and project manage the building in order that Karen and the Board could award as much of the work as possible to Broken Hill area firms that had supported the club through its tough financial times.

Karen said that Peter’s predicted gaming revenue increases came to fruition on completion of the area with revenue jumping around 30%, more than paying for the renovation and laying a solid financial foundation to pay for the deferred expansion.

“Previously it had only been a smoking area; a large area not getting fully utilised. Merlot understood that with a venue every square metre must show some sort of return on investment.

Karen said that the revenue increase spoke to the quality of Merlot’s design but the company demonstrated a number of other advantages.

On the one hand they were prepared to go to court with the club to prove to the Health Department that all air quality calculations were within the requirements of the Act, on the other they saved the club significant sums through their project management skills.

“Merlot costed every aspect of the job at Sydney prices and we were prepared for 10-15% margins on these prices to allow for freight and higher wages.

“It was good to have these costs to use as a monitoring base and this proved to be the case when one supplier quoted at nearly 2.5 times the Sydney price.”

Karen said that the outdoor gaming area was certainly one of the touch points of the club’s remarkable recovery.

From being destitute and in Administration for three months on 2000, the club has fought back through a staged building programme, tight financial management and clever marketing to show a record $480,000 profit last year – a profit that had almost been equalled by January this year.

Karen, who was just inducted into the Club Managers Association Australia Hall of Fame, said that Merlot’s approach was laudable and more than helpful as they provided a different perspective, tempering, despite the cost to themselves, her desire for improvements with a common sense approach.

“Quite often when you are too close to a business you understand what you want to do and what you need to do but just need that outsider’s point of view to give you a different perspective.

“Merlot has specialised in the club industry for a long while and they really know what they are talking about as was more than proven in our case.

“We went with their recommendations and wound up not only with a good facility, but with increased revenue to pay for further improvements,” Karen said.

After successfully operating for twenty one years in club construction the team at Merlot Constructions are proud to share our free ebook which contains ideas that will increase your Club's revenue while showing you how to save money on your club's fitout.

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