As coronavirus radically disrupted club operations, the first reactions from clubs were the health and safety of its staff and members. Based on state and federal orders, clubs closed their doors and have been working resiliently behind the scenes to prepare for reopening. Unfortunately, the abundance of unknowns is staggering, from governmental ordinances, member and staff concerns around overcrowding, to the new economics that clubs now face. Boards and management are evaluating countless scenarios while leveraging their industry expertise to assist in shaping a viable plan to reopen.
Here are a few key issues to consider from a financial perspective.
Communication with members and staff regarding the reopening. The key will be transparency as well as listening to concerns of members and staff as the club restarts operations.
Insurance coverage. Clubs should spend time with their insurance brokers/agents to ensure that they have the appropriate coverage for issues related to COVID-19.
Employee policies. Legal counsel should review any new employee policies and procedures regarding personal protection equipment, social distancing, employee screening protocols and other similar precautions.
Personal protection equipment (PPE). Clubs should ensure that upon reopening they have an adequate supply of PPE, including infrared thermometers, masks, gloves, hand sanitizers and disinfectant sprays/wipes.
Business office continuity. With many club administrative offices working remotely, reintroduction into the office environment will most likely be gradual and staggered. Given the varying degrees of on-site and remote workers, clubs should consult with their IT professionals regarding the reliability of their electronic infrastructure. The need to ensure that critical systems can withstand the capacity changes within the work environment is critical to financial reporting. Back-up procedures should also be tested and monitored in the event of an interruption. The changes in office environment also heighten potential IT security vulnerabilities. Clubs should consider the best means of securing and verifying credentials in this environment and remind employees not to click on any potential phishing emails.
Vendors. Clubs should communicate with vendors to understand how their supply chains will be functioning and plan for any shortages.
Budgeting. The club should continue to build out various scenarios for the reopening with a careful eye on cash flow and liquidity.
Internal controls. This environment is more critical than ever with the control landscape changing over check signing, banking transfers, payroll as well as oversight and review. It is crucial that management and boards continually evaluate and monitor the various changes in the operations during the reopen process.
As clubs continue to navigate through many uncertainties and unanswered questions, staying informed through industry leaders and being reactive to change when needed will be essential to a successful reopening. Strategic thinking and strong leadership are key ingredients in shaping a viable reopening plan.
Daniel T. Condon and Matthew P. O’Dell are partners at Condon O’Meara McGinty & Donnelly LLP. They can be reached at [email protected] and [email protected].