Lessons from COVID-19 and what lies ahead

By Jonathan M. Gold

If you opened your camp this past summer, you understand just how essential camp is. You climbed a huge mountain to open, but now that summer is over, what lies ahead? How do you navigate these dangerous and uncharted waters? Here are a few lessons that helped us at Oak Crest Day Camp in Somerset, N.J. get through the summer and some reference points we will use to chart the course to summer 2021.

Reduce Expenses By 20 To 25 Percent

Go through expenses carefully. (Hopefully, you are using some basic accounting software like QuickBooks, etc.). Get creative on programming, be smarter on purchasing, and never let a crisis go to waste. All camps are feeling the pain of no or low enrollment, so you need to spread that hurt around. Push suppliers as far as you can to get the best deals; those companies want to stay in business, too.

Run Leaner And Better With Fewer People

You don’t need as many people to run camp as you may think. Camps have been spoiled for years by growing markets, higher tuitions, etc. It is cheaper to pay three people a little more than to hire a fourth person. Most camps will not agree with this because the reflex response is, “We need more counselors, kitchen staff, maintenance staff, lifeguards, etc.” You don’t. Hire a smaller number and increase it in June, if necessary. It’s better to have a smaller, more-efficient, committed crew.

Deflate Your Payroll

Payroll is the biggest expense—both summer and year-round. If you have people who have been on staff for a while, chances are you are paying them too much. Whatever you are paying was based on 2019 revenue, which is substantially cut or nonexistent in 2020. It’s time to take a hard look at payroll and staff members and make some difficult decisions. You dished out increases when times were good, but now you need to offer less or move on to new staff members (sorry).

Understand Profit And Loss, But Cash Flow Is Everything

Most camp operators do not have a handle on cash flow; many use their profit and loss to “follow a budget,” but that’s wrong. Profit and loss is important, but it’s just a snapshot in time. Instead, you need a 12-month model of cash in and cash out, including all the way up to and through the summer with the associated controls. A profit and loss statement is the foundation, but a 12- or 14-month cash-flow statement is your guide. Imagine flying to a destination without a flight plan. Or scuba diving without knowing how much air you have. Running out of cash can be fatal to any organization. If you do not know this basic business skill, there are many ways to find out how to create one. I use a model for all our camps and am happy to share. (We also will be producing an instructional video for free this month and can send the link.)

Warning: Do not rely on an accounting professional for understanding this. You manage your business—you fly the plane—so you need to know how this stuff works.

Don’t Fall Into The “Traditions” Trap

It’s so easy to do. We operate businesses in an industry rife with traditions that are—in many ways—the souls of camps. While they are great, they do not apply to how you operate and your business practices! It is easy to use the curse of knowledge to look at problems the same way every year. Yes, traditions are important, but processes evolve constantly. Your camp business requires innovation, change, and resourcefulness. Traditions and processes should work in harmony to deliver a superior experience more efficiently.

Capital Expenditures Are Not As Important As You Think

Ease up on large purchases and just maintain for a few years. It won’t matter as much as you think. Compete on quality of experience, not how gorgeous your site is.

Moving Toward 2021

You either operated last summer at a reduced capacity or did not operate at all. In either case, your gross revenue/profit (if you had one) is significantly smaller, or you are starting in a huge hole going into 2021. As I write this article, 50 percent of American families are not comfortable sending their children back to school. In order to return to pre-COVID enrollment levels, 100 percent of people will have to be comfortable again. My best guess is that half will be comfortable enough to test the waters in 2021. Whether you agree or disagree, it is safer to assume 70 to 80 percent of pre-COVID enrollment levels than to take an optimistic view and think things will be normal by next summer.

In addition to that, it is no longer safe to bill customers too far in advance of the summer. Too many camps were caught in a short squeeze where they did not have enough money to refund parents in full, and are now dealing with huge credits against their 2021 tuition revenues. People will be far less likely to part with their money early and will probably demand a rock-solid refund policy. Most of us won’t be able to collect the lion’s share of camp tuition until May. That means the way we purchase, pay for, and prepare for the upcoming season has to change significantly.

So, congrats on getting through COVID-19 summer 1, but don’t get cocky; there are some real challenges ahead. You don’t have the luxury of planning for the happy path.

It’s time to focus on the skills and elements of your business that will ensure survival. They will provide peace of mind, allow you to talk to customers more intelligently and with more confidence, and help firm up your relationship with the bank. What you do is essential—as is cash flow and profitability. This year will be all about financial-management skills, the ability to read and adapt to your markets, and the ability to innovate and do more with less. Camps will operate this summer at reduced capacity, but with careful cash management you should be able to get to May without additional capital or using credit lines. It’s not easy, but doable. Good luck!

Jonathan M. Gold, M.BA., Ph.D., has more than 40 years of experience in organized camping, beginning in 1969 as a camper at Camp Becket in the Berkshires. He rose through the ranks as a camper and counselor. He is also the CEO of the Arbor Group of Day Camps in New Jersey comprised of three camps in north, central and south Jersey. An internationally recognized speaker and writer, he is an authority on management in camping, speaking frequently at the local, national, and international level for-profit and not-for-profit camps. Reach him at Jonathan@oakcrestdaycamp.com.

Right Your Financial Ship