Niagara on the Lake Golf Club

The Niagara on the Lake Golf Resort is a well-established full service golf course and club. The club has its own dining room (The Green Room) and lounge (The Nineteenth Hole). Located in beautiful Niagara on the Lake, Ontario, the club has been successfully run and operated by the Johnson family for over 25 years. The club has enjoyed loyal patronage from club members on a consistent basis throughout the years. The club currently has three hundred and two (302) active members. Each member is required to pay an annual membership fee of $7,000 CAD which entitles them to play up to two (2) rounds of golf each day during the golf season.  Membership is due on January 1st of each year. Members have the privilege of patronizing the private dining room and lounge throughout the calendar year.

 

 

With over forty (40) golf courses in the Niagara Region and a continuing decline in the number of Canadian golfers, the Johnson’s decided it was time to sell their business enterprise.

 

 

The Johnsons sold their golf course and club on January 1, 2017 to Big Golf Corporation (BGC) for $5,000,000 CAD. BGC currently owns and operates 97 golf courses & clubs throughout North America. BGC immediately brought in one of their best property Financial Controllers, Mary Smith, a graduate of Niagara College’s Bachelor of Business Administration – Hospitality degree program. Mary will be paid a salary of $7,500 per month.

 

 

Mary immediately got to work on January 1, 2017 going over all of the financial records and setting up a new corporation; BGC-Niagara GCC. Hence the corporate identity for the golf course and club had now become BGC-Niagara GCC whereas the brand name would remain the same “Niagara on the Lake Golf Club”. Also at this time BGC provided BGC-Niagara GCC with a certified cheque in the amount of $500,000 CAD. Mary deposited the cheque into the new bank account for BGC-Niagara GCC on January 2, 2017 in exchange for 10 common shares that would be held by BGC.

 

 

On February 1, 2017 BGC hired Rex Ryan as the new GM for BGC-Niagara GCC. Mr. Ryan will be paid a salary of $8,200 per month.

 

 

On February 1, 2017 BGC hired golf professional David Ebanks to serve in the capacity of resident pro and run the Golf Shop located on site at BGC-Niagara GCC. Mr. Ebanks would be paid a salary of $5,000 per month.

On March 1, 2017 Mr. Ebanks purchased golf equipment from Nikke Golf to be sold in the pro shop in the amount of $178,000 CAD. BGC-Niagara GCC has a line of credit with Nikke Golf.

 

 

On March 1, 2017 Mr. Ryan spent $104,000 on new furniture, fixtures and equipment (FFE). The new FFE is expected to last five (5) years and have a salvage value of $10,000.

 

 

Also on March 1, 2017 BGC hired an Executive Chef, Dining Room Manager and a Lounge Manager. Mr. Greg Roman as the new Executive Chef at a cost of $5,000 per month, Nancy Swartz to manage the dining room for $3,900 per month and Jim Walker to manage the lounge for $3,400 per month.

 

 

On April 1, 2017 Mr. Roman purchased food inventory of $45,293 on credit. Mr. Walker purchased beverage inventory of $18,450 using cash and Ms. Swartz acquired $5,132 of table linens on credit. After the month of April, an additional $29,000 is spent each month on food inventory and $14,000 on beverage.

 

 

Also on April 1, 2017 Mr. Ebanks has received $22,000 for golf lessons that will be provided throughout the season.

 

 

The business corporate tax rate is 22% of EBT.

 

 

Property taxes for the golf club are $26,000 each year and are paid on a quarterly basis to the Township of Niagara on the Lake. Utilities are prorated and cost $6,300 each month. All utilities are paid for at the end of each month to Niagara Power Corporation.

 

 

Each club member is required to spend at least $100 each month on F&B. As at August 31st, 2017, records show F&B revenue is equal to $281,900. Of which 58% is food revenue. Food cost averages 36% of sales and beverage cost averages 28% of sales each month. All members pay for their F&B in cash. F&B revenue can be prorated in accordance with patronage obligations and requirements.

 

 

As at August 31, 2017 pro shop sales are $83,788 for the year and golf lesson fees are at $17,925 for the year so far. CGS for the pro shop are 25%. Pro shop hourly wage expense (part time help) for the year to date are $18,500.