It’s been quite a year so far for rising prices.
In certain years, the price of gas goes up. Other years, it’s the price of produce. This year, we’ve also had to deal with minimum wage going up in Ontario, not that I argue with people earning a decent living, but it’s something else golf operations have had to adapt to in 2014.
Sometimes, in mid-year, you have to change your pricing strategy. You don’t want to, but you have to in order to remain a viable business.
If you have a large food and beverage operation and you’ve sold a lot of your events a year in advance and then, the price of produce or other supplies goes up, you’re the one who is taking the hit. Sometimes, the exchange rate with the U.S. dollar plays into it.
The big increase in the price of gas over the past month or so means that prices are increasing on supplies you need on so many aspects of your operation.
When you’re doing your budgeting in the fall for the year ahead, you have to budget in price increases, but it isn’t easy. It’s a moving target this summer that shows no sign of letting up going into 2015.
I’m not a big contingency person to throw out a big number in case we make a mistake, but when looking at expenses, you do have to build in room for some increases.
Keep monitoring the situation in all departments because recent events have indicated that fall forecasting is going to be event more challenging this year, while also trying to control costs.