Well, that's enough of my rambling. Like I said before, if I can be of any assistance to you or our community, do not hesitate to call on me.
Dwain Kramzar
2624 High Range
PS: If SCSCAI follows the past, will our future be any brighter?
On Mon, Jan 16, 2012 at 7:08 AM, Sun City Sue P <scsuep@cox.net> wrote:
Dwain,
I know the elements of a business plan and have worked with many small businesses to develop all 7 parts of a plan, but companies make a full business plan so they can borrow money. [You don't have to take your plan to the bank, but by recording your income and expenditure you will have a benchmark to use when you review your goals and accomplishments. Business plans often follow a general format.]
We don't need to borrow money. I think we need only a financial plan projected for at least 3 years which includes cash flow, operating budgets and P&L. [budgets is a guesswork of revenues and expenditures that constructs a model of how our business might perform financially if certain strategies, events and plans are carried out. The purpose of the P&L statement is to show managers whether the company made or lost money during the period being reported, also providing accountability to the BoD. Sue it's all about accountability]
The association has kept every area separate such as golf and landscape and they have separated resident use and non-resident use on the businesses. Thus, you can see how it all works both together as one entity or separate out the businesses, but if we do not co-mingle funds it accomplishes nothing since the residents are responsible for all the facilities. [the health of SCSCAI's assets are the responsibility of management and the BoD are responsible for the oversight of the management performance.
I don't understand your comment on the ED. Should that person do the financial plan or not do it? [my understanding is that the ED is the professional that is responsible for the day to day operation of SCSCAI] It seems that past EDs have had no incentive to reduce expenses because they were not given goals. [what is the $100k+++ used for?] Isn't up to the board to give goals? [this should have been well defined in the employees contract ] Last year the Board tried to message the budget after it was done and since it is done so late, they did little in order to meet time constraints set by NRS116 . Bottom line...a poor way to run anything.
Sue
On Jan 15, 2012, at 7:29 PM, Dwain Kramzar wrote:
Sue, the purpose of my last correspondence and comments to you was to point out the past resistance of the past Boards and ED's to implement standard business procedures. By your comments, below, I believe I should be a bit more specific.
Sue, as stated on the associations home page, "The Association's purpose is, with reasonable governance and rules, to provide for the care and maintenance of the facilities in a cost effective manner, and to create an atmosphere which encourages new and old residents to maintain the active lifestyle they have sought by moving to the community". The only way to achieve this is to follow the original intent written in the governing documents; this is what the membership expects and deserves. In order to achieve SCSCAI's stated purpose, the Association has to operate as an association and the business has to operate as a business. These two, the Association & the business operations can not function with co-mingled funds. Sue, I believe in the past, most of the Director's thought they were representing the memberships best interests by using "the do it yourself mentality" to find solutions to problems. An example is not using the ED (the professional) to implement a Business Plan.
Essential Elements of a Good Business Plan Every successful business plan should include something about each of the following areas, since these are what make up the essentials of a good business plan:
- Executive Summary,
- Market Analysis,
- Company Description,
- Organization & Management,
- Marketing & Sales Management,
- Service of Product Line,
- Funding Request,
- Financials (including a P&L statement)
Thank you for taking the time to communicate with me. If I can be of any assistance to you in the future, do not hesitate to give me a call.
Dwain Kramzar2624 High RangeDwain,
You are right on all counts. I had a retail business of over $13 million dollars and I could not or would not spend a cent without a 3 year business plan and I updated the current year constantly based on trends, advertising and other changes. I would even plan the holidays season by day and obviously goals and bonus were attached to those plans. I thought it would be easy to get a 3 year plan for SCSCAI. WRONG!
First off, the employees use their annual budget as something static, make no adjustments for unforeseen expenses (until this year..Barbara cut as expenses rose) and they don't use it as a planning and goal tool. The past Boards were unwilling to give direction or demand a bottom line number and often use committees and subcommittees as excuses to not make decisions on large items and projects. Worse, everything moves so slow because the Board meets most months once.
Example: I brought a motion forward that the Board require this next year's budget based on no increase in assessments. I could not get it passes until I changed the word require to recommend, yet the board is responsible for the budget according to NRS 116. How can the Executive Director do the budget if there is no goal. I thought I could set that goal by limiting assessments. If you only have so mush income, you have to budget accordingly.
I know why we only have a budget 2 months before the year begins, because we do a bottoms up process, which is time consuming and almost impossible to do for 3 years. The process should be a top down process, looking at large cost items such as payroll, health benefits, and utilities (74% of entire operating budget). Those can be apportioned by department based on history, needs and anticipated increases or decreases. The reserves must always be funded first since we do have a 5 to 10 year plan when it comes to reserves. The reserve can not be used as a balancing tool to the operating budget!
I know what needs to be done and the Board needs to take a stand, so our residents know their anticipated costs for 3 years at a minimum. Whether this is worked on by the Executive Director, the finance committee or a new subcommittee it does not matter, but it needs to be done. Control is needed over the budget not balancing it by assessments.
SCSCAI does things because we have "it has always been done this way" or " it is a waste of time because we tried this before" or "we did a study 5 years ago".I have huge faith in our Executive Director, Barbara Cogar to look at everything in a new light and I will work with her in every way to accomplish real plans for SCSCAI, while improving our amenities to keep Sun City the community and resort like living it has been for so many years. I will be proposing an open business planning meeting to be held monthly to keep the board and community apprised of issues by department. It would be a scheduled meeting with a broad departmental agenda where no decisions would be made, just discussion.This should stop the feeling of secrecy and keep all the board members apprised of all the issues. Legal, personnel and individual resident issues would not be discussed due to privacy rights.
I am sure you have all heard this before, but I feel all parts are coming together to make it work this time. We have a committed board, a strong Executive Director and a new controller.
Sue Papilion
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