Bruce Greef wrote:

Any thoughts on what we should do here? Other than start saving...

Your subject talks about fleet replacement strategies. You admit your
club has not been saving. The only sensible strategy is to set aside
funds based on your usage of your existing equipment. Consider
starting when putting a glider into service, though it's never too late
to start. What is the anticipated service life? An L-23 is about 6000
hours to the first overhaul. So divide the existing service life by
the number of hours remaining and bank at a rate to cover that cost.
Do the same for each glider in the club fleet. Some may be based on
restoration costs as they may not have a fixed service limit. Find a
useful estimate. Whether this comes from monthly dues or flying fees
is moot, but you must use a realistic cost basis. That's just one
factor in the real cost of soaring and must be considered when you are
setting your rates. You don't necessarily have to set the rates based
on what you want to acquire, but on your sunk costs. The rate will
increase when you replace or upgrade as you adjust the dues or fees
accordingly.

As the funds accumulate, you can decide to draw on these funds for
fleet replacement or expansion. Some clubs avoid growth and promotion
due to lack of available seats. However, if you are setting aside the
funds, upgrading and expansion are not so onerous. If you currently
have three gliders, you may find that you can add another glider
without asking for funds within 2-3 years. Adding the glider will
allow and keep more (satisfied) members and increase the rate at which
the fund builds.

Keep a couple of things in mind. A club is not a business. Yes, you
must have fiduciary responsbility, but your aims are not the same as a
business. If you adopt a realistic strategic economic plan, you can
avoid going to the bank. Financial interest is an expense of doing
business. But a club is not a business, is generally devoid of
business taxation, and has no tax leverage from expensing interest. In
economic terms, financial interest is a loss of future earnings. Keep
that in mind while doing some strategic planning. Your club is much
better off over the long run to set aside funds up front, than paying
interest on any notes later.

If you can replace or upgrade in advance of selling, you will also
leverage your purchase and sale prices. If you are under pressure, it
will cost you every time.

Frank Whiteley