Owning a Club: The Realities, Challenges, and Wins with Elliott McDermed
Welcome to Racquet Fuel, where we launch into great conversations and share powerful tools to help you become a stronger rackets leader. Your hosts are Kim Bastable, a former all American tennis player, and now the director of professional rackets management at the University of Florida, and Simon Gale, the USTA senior director of racket sports development. Today on racket fuel, going from academy directors to purchasing a twenty five year old club, the challenges and joys of being owners. Here's Givin Simon.
Speaker 2:Welcome to Racket Fuel. I am very excited today. This is a subject matter that kind of goes way back into my childhood. We're gonna interview Elliot McDermott, who's the owner of Overland Park Racquet Club, and I just that's the club I one of the clubs I grew up playing at in Overland Park, Kansas and was there on probably day one back in 1978, and it's just really sentimental to me. Fortunately, Eric is not that old.
Speaker 2:He is the second owner of the club. He and, his buddy Eric ran. And so we get to hear a little bit about their decision to buy this club and and the pathway. So welcome, Elliot. We're excited to have you on RocketFuel.
Speaker 3:Thanks for having me, Kim.
Speaker 2:Alright. Simon, we're gonna have fun with this one. I guess I'll get started. Overland Park is a premier club, so I know you know Elliot well. Let's get get your intro on this.
Speaker 4:Yeah. I think this is interesting because there's not many of us who have gone through the teaching pro leader owner pathway. So I think Elliott's insight into that journey and the trials and tribulations of being an owner, is interesting. Think in the past, some of those episodes around ownership have have been really popular. So I'm looking forward to that insight.
Speaker 4:And, yes, being a USDA premier facility is a badge of honor for Elliot and and Eric in the Overland Park Racquet Club. So that's how I've I've met Elliott over the last couple of years. So thrilled to have him on today.
Speaker 2:Alright. So, Elliott, let's let's kinda start out. We know how tell us a little bit. We know we could go back for a while, but you and and Eric have known each other a while. But how did you two get together?
Speaker 2:And then how did you come together in the idea of purchasing a a club?
Speaker 3:Well, we were actually teaching tennis together here at the Overland Park Racquet Club back, it had one owner since 1978, a a guy in Saint Louis, and he owned another club and had some other businesses. And and Eric and I were just teaching tennis and and working with juniors and, you know, kind of that that typical pathway when, you know, we decided at one point in 02/2008 to go out on our own and start what was essentially just a tennis academy business that, you know, specialized in helping kids that wanted to play college tennis. So, you know, that's kinda how the the journey began, as we had to bounce around different places in Kansas City, leasing court space from, you know, variety of private and public clubs. And, you know, we've got pretty serious winter in Kansas City, so finding indoor space was always a challenge. And working with general managers or owners of these clubs and, you know, coming in with 40 kids and and a staff of coaches to kinda take over a a bubble or a a wing of the club for five or six months and then look, well, what are we gonna do outdoors for the next six months.
Speaker 3:And so so that that went on, and and and we were able to make it work up until about 02/2012 when luckily, we had a student, a couple of students, and and one of which one of the parents was a, you know, successful business guy and he started to mentor us. And and and that led us to start thinking, well, how do we go from being at the mercy of these other clubs and facilities that are really, you know, once we're one step away from not having a place to run this Tennis Academy business? And that's when our search for a club of our own began. At which point, you know, there's some luck, there's some great timing, there's meeting the right people and keeping your eyes and ears open, and the opportunity came up with this owner at Overland Park Racquet Club. He was older.
Speaker 3:The facility was running down, and it was just it was the right time for everybody, and we were able to purchase the club in 2014.
Speaker 2:Yeah. And just for some context, it's a 14 court indoor club, and it had did it have six active outdoor courts at that time? I know some of them were in disrepair.
Speaker 3:I think it had eight.
Speaker 2:It had eight. And then now you've you've changed it. Tell us what what it looks like today.
Speaker 3:So like I said, it was pretty rundown, which, you know, are pretty typical for the clubs these days that were built in that boom of the late seventies, early eighties where tennis is a great game. It's a great sport, and it's not always as profitable of a business as people might think, especially when you're dealing with overhead costs of indoors. And so I think a lot of these club owners that, you know, have done the best they could, but also kinda milked things to the point where you look at what it takes to to rehab a club and you go, oh, man. This is gonna be really tough. And so, you know, we we just we came in and said, okay.
Speaker 3:Well, we're gonna breathe new life into it, and that involves everything from skinning a new roof to put in LED lighting, ceiling. We just knocked down every wall in the clubhouse area, just went right down to the bones of it and reconfigured layout, the viewing. And once we were done with that, we moved downstairs, and we blew out the locker rooms, built a very nice fitness facility, and then went out back, like you said, to the eight outdoor courts. And what we did is we moved a lot of ground around and got rid of an old pool that nobody was using, revamped four of our better hard courts, and then took away, a couple others and were able to build kind of a stadium clay court and then a bank of three clay courts. And mainly, we did that because in Kansas City, there was really no place that was accessible for people to play on Hartree, and we thought that that was a really important addition.
Speaker 3:So once we are done with that, that pretty much completed the the purchase and the renovation, which took us about three years.
Speaker 4:So one of the challenges with with being partners in an ownership of a facility like that is defining your guys' roles. So if there's two of you, you know, what is as I understand it, Eric is the ideas guy and kind of face of the company. And how do you balance each other out, and how would you define your two roles to make that work so you're not on top of each other all the time?
Speaker 3:It's kind of a funny question because he he teases me that that I'm the face and and he's the brains. So now that's not at all entirely true, but but we like to jab each other. And and I would say, yeah, Eric is is a really creative side of this. It is more where he will come up with an idea, we'll bounce it around, and then I'll usually then being kind of the more black and white minded guy, will then put pen to paper and and get the job done and figure out how to make that idea become a reality. I mean, the the club, frankly, the purchase of the club was or it did start with Eric.
Speaker 3:You know? Eric is a really good people person. He's great at at meeting and starting small talk. And and so so a lot of a lot of these conversations, you know, started with him just, you know, getting to know different people and and and coming to me and saying, hey. You know, I think we have an opportunity with a couple of guys.
Speaker 3:We might be able to put something together and and buy a club. And I and I rolled my eyes and said, yeah. You know? I I don't know about that, Eric. But but I went along for the ride, and, and and sure enough, I mean, you know, we we got the job done.
Speaker 3:But the other reason the partnership works, and it's a fifty fifty partnership, and we've never really had any issues. And I think the reason is is because the two of us really trust each other. And so that's very, very rare. We understand that that's rare. And my strengths are his weaknesses and vice versa.
Speaker 3:And so we understand that as well. And so there's no ego involved in it, and we're also not worried that that one of us is, you know, in the background doing something that the other doesn't know about or, you know, or is selfish on on his side or whatnot. So so, yeah, that to answer your question, Simon, I think I think there's there's the it's the rare opportunity that, strength and weaknesses matched up and also the fact that we could admit to having our own weaknesses and identifying each other's strengths and working together to to do that.
Speaker 2:That's that's excellent partnership. That's a good that's a that's, I think, unique. So, kudos to you guys. Okay. So how has the Tennis Academy evolved through this?
Speaker 2:Are you still having a Tennis Academy? What's how big an emphasis, how much on court are you?
Speaker 3:I'm still spending about thirty to thirty five hours a week on the court, and Eric does about the the same. And the reason why we do that is a couple of things. You know? The Tennis Academy has always kinda been our baby, and, and it's also an integral part to this club from a financial standpoint. I think there's some clout in our section of the reputation of the tennis academy, and we've tried at times to allow some other experienced good pros, good coaches kinda take over that role of running of running the college prep side of the tennis academy, and and it just has never worked.
Speaker 3:And and it's evolved now. You know? So so we've been owners of the club for ten years. It's now evolved to where I think we're still involved on court and working with these kids closely. I'm actually leaving this afternoon still for a national tournament with a kid.
Speaker 3:I still like doing that. I don't have to do that, but I think that is where our passion lies. And so we've gotten the club operation to the point where we can focus on the side of it that we really like to do. So I think for a long time, you know, when you're in this business and you're grinding and you're teaching a lot, you're thinking like, oh, man. I can't wait to get off the court and, you know, I'd just rather be a director and, you know, this and that.
Speaker 3:And and we've come full circle where we thought that's what we wanted. But in the end, what we really wanted was to make an impact on these kids and and and their pathway, and and we're passionate about that. And so so we just continue to coach tennis, and we like it. And we've got a great staff that allows us really to do that again.
Speaker 4:We could unpack that for a couple of days, I think, because that's fascinating to me. I don't want you to answer this question, but my first thought is when do you have any time to create a vision and strategically plan and so on if you're on the court, thirty five hours and all that goes with that. So that would be fascinating on a separate a separate probably, interview. My question within that is you mentioned that you had tried to empower others to grow into these roles so that you could maybe teach less and so on. It just hasn't worked out.
Speaker 4:If you reflect on that a little bit now, is there something you would have done different? Are you clearer on what that would look like if you did it again? Like, long term, it sounds like maybe this is your strategy that you guys will continue to be on court heavily, but where's the growth for somebody below you guys to be able to move up within your pathway? So there's a lot of questions within that, but I think the question is, how do you empower your staff to move up if you guys are in the owner and basically director of tennis roles?
Speaker 3:Yeah. Simon, it's it's interesting because, for whatever reason, I think that this particular side of the business is more difficult to manage than what most people think. And and I base that on the fact that if the kind of the high performance tennis academy side of the business were were easier, there would be a lot more competition in in that area. And and now that I've done this for twenty five years, I've just seen a lot of three to five year businesses come and go because of a whole number of of reasons. Right?
Speaker 3:I mean, it's exhausting. It's it's competitive, and it's difficult to manage. It's very easy to go down a road of pandering to a parent who is the squeaky wheel, and you make decisions, and then that affects, a huge percentage of your business that doesn't like the decision you made. And you you made that decision for the wrong reason. And so, you know, there are things like that that come up.
Speaker 3:Right? And and so I I guess what we were able to do in the we're ten years in, like I said. In the first five years, we spent a lot of time kind of ignoring the Tennis Academy side of it in order to get the rest of the business to look the way that we wanted it to look. And and I think this is this is probably the most interesting part of what we've done, and that is that a lot of tennis coaches look at where they work and they bounce around and they go, oh, man. If it you know, if I have my own club, I do this or I do that.
Speaker 3:And and this guy does know what he's doing and, you know, and these guys are screwing me and whatever. And and for us to have the opportunity to shape this club for our members, for for the staff, and to be able to do it from the side of of that of that tennis pro looking in and say, okay. We still teach tennis every day with this whole staff. We've got 15 full time pros, and we're still doing it out there with these guys and and and girls every day. We need to shape this club the way that's best for all of them, you know, not just for us as owners.
Speaker 3:And I think that's a problem in our industry is that most of the owners really can't step into our shoes and relate to what the people are doing every day on the court. And so we were able to do that. So five years in, it it took five years. I mean, maybe it took seven years. I mean, I really only feel like the last couple of years where I've been able to breathe and not worry about the club opening every day, the club closing every day, the the management of of how you make members happy, scheduling of the staff, everything, you know, that the managers and owners have to go through.
Speaker 3:It took a long time to get to that point. And so that's the unique part, I guess.
Speaker 2:Yeah. That's that's insightful. And it's interesting that, you know, what you say five to seven years. And I've I've watched that to a certain extent. I mean, I live in Kansas City most of my life.
Speaker 2:You know, I've seen that club evolve. More than anything, seen you and Eric evolve as leaders from a little bit more of that frenetic entrepreneur, like, oh my gosh. What I get myself into?
Speaker 3:Sure.
Speaker 2:To a a calm sense of we got this. And we've not cracked it because I don't have you have no arrogance about you. You have a a confidence yet a a desire. Like, you're you guys are just workers. You guys are just, like, you're there all the time.
Speaker 2:You're you're very, very present. But I guess that obviously, Simon and I are big on the, work life balance type bandwagon. So how has that evolved for both yourself and your staff? Like, do you promote the five day work week? How do you how do you measure balance in your world?
Speaker 3:Yeah. I I think the balance has finally arrived for me especially, and I'm 50 years old. And so, you know, it it took a long time. And I think that's an important key for anybody that's listening that does want to end up maybe being in the in in this sort of a role, and that is that, you know, it takes a long time to become an expert at something. And, ultimately, the only way to survive all the mistakes that we have made is through the work ethic side because failing at this business was was not an option.
Speaker 3:And so we had to make it work. And so so the way that I feel now, yeah, I would agree with you. I I I think there was that that early on kinda, like, you know, running around with, like, a chicken with your head cut off, trying to, you know, put out fires and make sure that, you know, you weren't gonna sink this giant ship. And so we just decided even from the days of 02/2008 and starting this kind of rogue tennis academy was we just need to make sure that we outwork everybody. And and so I think that's an important message.
Speaker 4:That's for you guys as owners, and I can relate to that. As a managing partner of a club, I swept the courts at five in the morning, changed the light bulbs, did it all, but phased that out over time as we became more profitable and were able to hire people to do those jobs. So that's you as owners. You have to do that because you sign the checks or need the money in the bank account to to pay payroll. What about how you manage your staff and the messaging around your team on what's expected?
Speaker 4:Are they expected to have the same work ethic and work seven days a week like you guys, or is that different once you get below ownership?
Speaker 3:Yeah. I listened to some of your philosophies, Simon, on on the the work, life balance and the the five day work week and the, you know, the hours. And and I think that that resonates a lot with Eric and I because we do know what, you know, what we've gone through. And I think the reality of it is that the balance is something that's very important that we've preached to the guys. We don't force it, but I think most of the staff, let's see.
Speaker 3:If we have 15 guys, I would say 12 of those 15 people find that very important. You know, there there are a couple old school guys that just, you know, wanna grind a hundred hours a week, and they've been doing that for twenty years, and and and we just let them go. Right? But, yeah, I would say most of the staff finds that important. They know that's important to us.
Speaker 3:I live and work by example now to where they can see that it's important for me to have time off. It's important for me to have time away from the club, and we make that possible for them. Now I will say one thing that they all understand has to happen because of the way the business works is that we're gonna work until eight or 09:00 at night a lot of the time, but we're also not coming in until one or 02:00 in the afternoon. Right. Depending on which side of the business you're really working.
Speaker 3:And we try to do that too. We try to have staff that is almost entirely working with our adult members and staff that works almost entirely with junior members. And so those shifts are different.
Speaker 4:And I think that's the message, right, is there's not one I'm big on, yes, five day, but it's more a philosophy of how are we taking care of people, which leads to my next question, which is all centered around retention. So if we're taking care of our staff and whatever that is, some will say it's I used to work seven days, now I work six. Or I've come in at two, like you say, and I'm not not there till 09:00 at night and back at seven in the morning. It's finding that balance that works for each individual with the ultimate goal is if the industry has a two year turnover rate of pros, that's bad for my business. If I can take care of my team and increase retention, ultimately, that drives revenue more consistently for me as well.
Speaker 4:We know that retains customers. So what else are you doing to help increase retention, especially given that we're in a climate now where there's a shortage of pros and and a demand for for play? What other things are you guys doing to try and increase retention?
Speaker 3:Well, you know, I I don't know if it's luck or or or whatnot, but other than the COVID blip, the retention of the staff had I mean, we have we have majorly bucked the industry trend on on retention. So we're doing something right, and and but I don't profess to necessarily know exactly what it is, to be honest with you.
Speaker 4:Are you paying them cash or something? I mean, what what's the secret sauce here? How does this work, Elliot?
Speaker 3:So the only time that we, like I said, other than COVID where some people just got out of the organizational structure and say, I I feel like I've reached a ceiling at this club, and I need to go somewhere else if I want to continue to climb the ladder. That's usually the only reason we've we've lost people. But on the flip side, we've been able to retain some people because we've looked at things more creatively and created some more upward mobility that maybe didn't look like it was there that we then invented in in in some respects. I I think another part of it is is we've also been lucky that because of Eric and my influence from the Tennis Academy side that, you know, the the love of the game, continuing to play in college, and then deciding that, well, maybe I wanna stay in this tennis business, and and I think I wanna come back and work for these guys who were my coaches. We've been lucky to have staff like that.
Speaker 3:And these guys come back in, and they already know what we're looking for. You know, it's almost like a built in training ground where we don't have to reteach a bunch of the philosophies because they already know we're all on the same page. And those guys and and and girls have have stayed here because they they like the system.
Speaker 2:That's great. I mean, that's what Simon and I have had the comment about the idea of having you know, at every club, you sort of have your own junior pipeline that you could make your future staff. And being maybe intentional about literally talking to them about careers rather than taking the chance of them just randomly coming back. So that's excellent. I'm glad to hear that.
Speaker 2:Let's just jump to the subject of the, pickleball padel life outside of tennis. How has Overland Park Racquet Club responded when you when you bought the club? There was none of that, and that's been since you bought the club. So how have you responded to those, alternative complimentary sports?
Speaker 3:Well, we think Padel is an incredible sport as we've played it and watched and observed both the pickleball world and the Paddell world and the divide maybe that's that's occurred between tennis and pickle. I think Paddell sits right in the middle. It's just this magnet of of both the the pickleball appeal and the tennis appeal, which I think is gonna create a popularity that that we're just maybe not even not even sure how big that's gonna be. The entry into Paddell is more difficult than Pickle because of of the cost of building the courts out. But I think everybody's gonna everyone's gonna see the value in that that's in my business, and I think that we have been so happy with the response in Kansas City.
Speaker 3:I mean, it's only two courts. It's kind of a pop up and introduction type facility, but the guys that we partnered with have done a phenomenal job. It's a it's a beautiful place, and the sport is is so fun. Now we have some multipurpose kind of pickleball courts on three of our indoor courts. We host a few tournaments.
Speaker 3:We have some members that that get out there and play. But generally speaking, the club has remained a tennis club and has not seen very much demand for pickleball. Yet the moment we put in these Padel courts, it just caught on like wildfire. And so if, you know, if I look at at where I'm gonna be in ten years from now, I think I'm gonna be involved a lot more in Padell than I am gonna be involved in Pickle and probably even more involved than I am in tennis. I mean, I I just think that game is fantastic, and I think it it's really taking off.
Speaker 4:Great feedback. And I think we're hearing that more and more too. So way to embrace it and way to evolve. But I'm just gonna give you a little bit of credit because I I didn't count how many times you said it, but at least half a dozen times you used the word luck or lucky. Not a believer in that.
Speaker 4:I think you make your own luck. You've clearly been, attentive to a lot of things and and taken something from 02/2014 and evolved it into a successful business. So kudos to you and and Eric, but stop being so humble and and maybe, feel free to brag a little bit more about your achievements. So congratulations to you guys. But with all this ten years, eleven years of history, hopefully, has come a lot of wisdom.
Speaker 4:And I assume when you took on the club in '14, you had probably no gray hairs. And now I hate to say it, but everyone won't see this because it's audio, but there's a few sneaking into the beer there. I went through the same thing. Owning a club is stressful. What are some of the lessons learned along the way?
Speaker 4:Because there's a lot of aspiring pros who talk about wanting to get off the court, I don't want to teach forever, and I want to be an owner. And maybe some of them don't stay the course and go through the stages of leading people, owning, managing, and ending up as an owner. And you don't have to do all those stages, but there's a lot of lessons learned along the way. What would be one or two key takeaways from your ten, eleven years as an owner that you would pass on to those aspiring to be you?
Speaker 3:Well, I I appreciate you you you recognizing, the sentiment of of luck that I throw in there because when I was when I was, you know, entrepreneur just starting out, one podcast that I love was it was called How I Built This. I don't know if you guys have heard heard of that. It's popular one where they interview all of these, business owners, many of which failed or almost failed, right, and and then became wildly successful at at one of their one of their businesses. And they always ask at the end of the podcast how much of your success is due to luck and how much of it is due to, you know, your hard work and and and those other qualities that you have. And and I'm always so interested in the answers because they were never the same.
Speaker 3:And so I think that there is a little bit of luck in what we initially were able to create because because we kept our eyes and ears open to opportunities. I think that's a big thing. Being nonjudgmental of people, not taking sides, just trying to do right by people no matter what. I think honesty is a quality that maybe doesn't get talked about, but definitely gets observed. And I think that I think that we have a reputation of honesty and integrity.
Speaker 3:I think that helped attract some angel investors for us. The last part of it is for whatever reason, Eric and I both think the work ethic quality is paramount and that everything that you want out of your, career needs to be earned, not given. And so we could just still be teaching tennis and and bouncing around and doing that, and we would have done that. Maybe getting to the to the point of, of burnout at at at age 50. I don't know.
Speaker 3:But but those things have made a big difference to put us in this situation.
Speaker 2:Yeah. No. That's that's good honesty and I good honesty about your honesty. You are honest. You have a reputation of that for sure.
Speaker 2:I think the challenges in front of you, I'm guessing, you for lack of a better term, you didn't know what you didn't know.
Speaker 3:Right.
Speaker 2:You know? Could you just give us maybe one example of we had no idea we were gonna end up having to do x, and we had to figure it out. Is there one of those you can share that might inspire people to know that when they hit their own roadblocks and surprises?
Speaker 3:Well, I I think that the big misnomer about ownership of a club, especially a club like this, I mean, 14 indoor courts, four outdoor clay, two Padell, four hard sits on eight acres at at a great location. I mean, we have a lot going for us. Right? The club is very busy. We're we're actually close to full membership where we need to start a waiting list.
Speaker 3:That's something that's only happened in the last year and a half. But I and so I think from the outside looking in, people would say, oh, these guys are killing it. This club's, you know, incredible. The parking lot's always full, you know, this, that, and the other. And what people don't realize is that the cost of operating a club this size is way bigger than I ever thought, and I'm just no matter how many how many months I look at, you know, the p and l at the end of the month, and I and I look at and go, okay.
Speaker 3:We generated a lot of income. Why is there almost nothing left at the end of the month? Right? I think that that's that's something that that has you know, when we have gone round and round on how do we cut expenses because there's only so much, revenue that you can generate. Right?
Speaker 3:How do you cut expenses and maybe create a better, revenue margin for, you know, profit margin for yourself? And it's just very, very difficult. And so I think you've gotta be careful what you what you wish for. You know, I think a lot of people that wanna own clubs, if they're thinking of it from a financial standpoint, need to ask themselves how passionate are they about about this business. Because I think the real the part that I like about it more than trying to generate revenue, which just doesn't really it just doesn't really happen.
Speaker 3:I like being in control of my destiny ultimately. I do I do really appreciate that part of it. I do like having the last say. I don't mind the million dollar millions of dollars in debt risk that I have. Like, I don't think about that.
Speaker 3:It's kinda like thinking about losing a tennis match. Like, I'm not gonna worry about losing a tennis match until I'm shaking the guy's hand. So I look at running my business very, very similar to to how I would play a match competitively. So I don't worry about that stuff, but I'm very happy that I'm the one making the final decision. So that that's the biggest advantage as an owner to me.
Speaker 3:It's not the financial gain. It's not being able to sit sit around and watch other people do all the work for me. That's never gonna happen, and that's not why I do it.
Speaker 4:Yeah. Good people are expensive, and the owner is the last person that gets taken care of. And you don't walk out every Sunday night with wads of cash in your pockets and drive Ferraris on the weekend. That's not what that's not what ownership is. And and I I think you nailed it with the the reasons why above and beyond making money.
Speaker 4:You'd be better off putting your money in the stock market and just letting it sit there probably than from a return point of view. But there's a lot of other reasons that are very personal to people why ownership is such a passion project and why you love doing it. So really well said.
Speaker 2:Thank you, Elliot. That's that's really nice. We appreciate it. We're we're really getting close on time, so we appreciate your time and your wisdom. And if people have interest in in learning about ownership, I assume you'd be a willing teacher.
Speaker 3:For sure. Yeah. I'd love to talk to anybody that's, interested in going down this road.
Speaker 2:That's great. We appreciate your time. It's awesome to, get to know the details a little bit more of that club I grew up in. So thank you very much.
Speaker 3:Thanks for having me. It's fun talking about it.
Speaker 4:Yeah. Cheers, mate. That was that was excellent. Thanks for your time.
Speaker 2:We'll see you next time on Rocket Fuel.
Speaker 1:That's all for today, but we're not out of fuel. You can find more information and resources in our show notes and by visiting racketfuelpodcast.com. If you liked what you just heard, please subscribe and also leave a review, which helps other people join the mission to become stronger rackets leaders.
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