How to Start a Driving Range

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How to Start a Driving Range

There’s something so therapeutic about the act of hitting golf balls. Every swing requires concentration, and standing on the driving range for a few hours isn’t just a way to develop your technique, it’s also a chance to get away from the world. If you’re a golf enthusiast, starting a driving range of your own could be a business venture that’s financially and emotionally rewarding. Ranges can be very basic, or you can get more complicated and add features like restaurants, go-karts, and other entertainment. Either way, you’ll have a chance to develop your business into a unique opportunity while supporting your local golfing community.

Business Overview

Driving ranges give golfers a chance to practice their swing without playing an entire game of golf. These ranges typically have markers designating different differences, allowing golfers to monitor their progress. Driving ranges save golfers from having to walk courses or rent golf carts, acting as a designated practice facility. Many golfers will spend a few hours at a driving range, where they rent buckets of balls to hit.

At their most basic, driving ranges are large practice spaces, but technology like electronic tee devices and heated tee areas are available at some ranges. Some golf courses include driving ranges, but it’s also possible for a range to operate entirely on its own, especially when access to golf courses is limited in the area. Ranges typically feature some sort of snack bar. Some also pair with restaurants, arcades, go-kart courses, batting cages, and miniature golf, offering versatile entertainment for families and their kids.

It’s important to carefully consider your audience when designing and planning a driving range. If you’re catering more to beginner golfers and families, then you may want to incorporate other entertainment options, like video games and go-karts, to encourage families to spend an entire day at the range and increase their spending. If you’re marketing more toward serious golfers, then investing in technology and setting up a restaurant on the property can encourage those golfers to make frequent, longer visits.

Industry Summary

According to IBIS World, the golf driving range and family fun center industry experienced a 3.1% growth from 2015 to 2020. That growth was largely due to the increase in household incomes that occurred over that time. With higher incomes, consumers were able to spend more on leisure activities. By 2020, the market was a $15 billion market. A total of 60,369 businesses were in operation, and they employed 210,496 staff.

IBIS World predicts that the industry will continue to grow, though more slowly, from 2020 to 2025. Americans are predicted to increasingly participate in sports during that time, and golf driving ranges should see increased customer attendance. Per capita disposable income is also predicted to continue to rise, encouraging consumers to spend more on leisure activities.

Industry Trends

The United States Golf Association reports that multiple trends affect golf course and driving range maintenance today. Courses in the Western part of the country are increasingly facing water shortages, causing them to replace turf with less maintenance-intense low-water grasses. GPS-guided sprayers allow courses to deliver precise treatments, saving both time and chemicals with every course treatment. Because many courses are now operating with fewer employees than they previously had, courses use riding mowers to mow greens and tees to save on labor.

According to Morning Read, the modernization of driving ranges has made them “fun again.” Driving ranges are doing things differently to keep golfers practicing longer. Some of those changes include:

  • Offering climate-controlled hitting bays for golfers’ comfort
  • Playing trendy music
  • Implementing technology, including launch monitors and simulators so golfers can virtually play against each other
  • Creating short-game areas
  • Delivering video lessons
  • Staying open at night

The traditional driving range is evolving, but these new ranges are popular with avid golfers and customers who don’t have much golfing experience.

Target Market

Many driving ranges have multiple target markets. A single range may market to golf professionals, as well as sports enthusiasts and even people who want to try the sport for the first time. A target market may consist primarily of adults, but teens and children and overall families may be a secondary market.

Checklist for Starting a Driving Range

Starting a driving range can be an incredibly rewarding experience, but it’s important to make sure you’re prepared for the challenges ahead. Use this checklist to help get your business off on the right foot.

Step 1: Write a Business Plan

After coming up with the idea, the next step in starting your business should be to write a driving range business plan.  Not only will a bank require you to have a business plan, but multiple studies have shown that a business plan helps increase the odds of starting a successful business.

Related: How to write a business plan

Step 2: Form a Business Entity

A business entity (also referred to as a business structure) refers to how a business is legally organized to operate. There are four primary business structures to choose from, which include the sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). Each type of entity has its own pros and cons, such as liability exposure, costs, and administrative requirements.

When deciding on which business entity is best for a driving range, it normally comes down to the sole proprietorship and Limited Liability Company.

A partnership opens the owners up to unnecessary personal liability because if a partner does something to get the business sued, or runs off with cash from the business, the other partners are personally liable to repay.
 
The corporation can be a good choice to minimize liability risk because it separates the business assets from the owner’s assets. If the corporation is sued or certain business debts can’t be paid back, the owners aren’t personally responsible to repay them. The downside to the corporation is that it is more complicated than all the other entities and requires more administration than the LLC. If you plan on raising a lot of investment though, the corporation is usually the better choice.

That leaves the sole proprietorship and LLC.

The sole proprietorship is the least expensive and easiest entity to start which is appealing. The downside is that the owner is personally liable should anything happen to the business, which is an important consideration. The LLC offers the ability to operate as a sole proprietorship with the liability protection of a corporation. Depending on the state, the cost to form an LLC runs from $40 – $500, which is pretty inexpensive for protecting the owners from business-related lawsuits and certain debts.

Related: Guide to forming your LLC
 

Forming an LLC sounds complicated and expensive, but using an entity formation service guides you through the process so you know it was done right.


Some popular LLC formation services include:


IncFile - $0 plus state fees & free registered agent for 1 year!

IncAuthority - $0 plus state fees & free registered agent the first year!

ZenBusiness - $49 plus state fees & free registered agent for 1 year!

Step 3: Name the Business

Finding the perfect name for a business can be challenging. Not only does the name have to resonate with your customers, but it also has to be available to use.

Related: Tips and ideas for naming a driving range

Step 4: Select your Location

A prime, high-traffic location is important but not required to be successful.  The range will optimally be located close to a densely populated area and is easy to get to.  A driving range located in a high-traffic area or close to other entertainment activities can help bring in walk-in traffic.

Finding a location can be challenging due to the size requirements, so rent or mortgage costs could be high.

Related: Choosing a business location

Step 5: Apply for Business Licenses and Permits

To start a driving range, a variety of business licenses and permits will be needed. These permits and licenses can vary based on the state and town where the range is located. There may also be zoning requirements that can affect where you’re able to build a range.

In addition, there will be general business registrations depending on where the business is located, such as a local business license, sales tax permit, Employer Identification Number, and Occupancy Permit.

Related: What licenses does a driving range need?

Step 6: Find Financing

Coming up with a good business idea and having the skills to run it are one thing, but getting the funding to start a driving range is another due to the high costs.  Funding to start a driving range business can be difficult.  In order to get a loan, the borrower(s) will need to have good credit and be able to personally invest 15-25% towards the total start-up costs.

Related: Finding the money to start a business

Step 7: Open a Business Bank Account

Keeping your small business and personal finances in separate bank accounts is important to track the income and expenses of your business and identify trends.
 
Many banks offer free business checking accounts, so be sure to find a cost-effective option for your business.

Step 8: Get your Marketing Plan in Place

Driving ranges need to continuously market to bring in new customers. Common marketing techniques include social media marketing, online advertising, print advertising, and radio advertising. Establishing loyalty programs and referral rewards can also help to drive attendance and bring in new customers.

Marketing to local golf clubs and holding events are another way to bring in visitors.

Related: Low-cost ideas to market a new business

One important task while working on the marketing is developing an online presence. A website developer may be out of the budget, but Wix makes it easy for non-technical people to get a website running quickly and affordably.

Step 9: Get Business Insurance

There are several types of insurance to consider when starting a driving range. A few of these include:
– General liability insurance protects the business if customers are ever hurt while on the property. This type of policy may cover expenses like medical bills and legal fees.
– Commercial property insurance helps cover expenses like damage or loss of equipment and inventory during an event like a fire.
– Worker’s compensation insurance covers expenses like medical bills and legal fees if an employee is ever hurt while on the job.

The cost to insure a driving range can vary substantially depending on the business’ location, the value of its equipment, and the number of employees on staff. Requesting quotes from multiple companies can give you the best sense of insurance costs and what to budget for. When comparing the quotes, consider the differences in premiums, coverage limits, exclusions, and deductibles to decide which plan is right for your business.

Related: Common types of insurance a business may need.

Step 10: Hire Employees

Driving ranges require at least a few employees to operate and tend to be the biggest operational cost. Glassdoor reports that driving range attendants earn an average salary of $21,010 per year, though salaries can range from $18,000 to $27,000. According to Payscale, equipment managers earn an average of $44,000 per year, and maintenance mechanics earn about $45,000 per year. Pesticide handlers and appliers earn an average of $27,000 per year.

In addition to salary costs, a driving range’s budget needs to include other employee-related expenses like worker’s comp, paid time off, and vacation time.

Related: Hiring your first employee

Step 11: Set up an Accounting System

Setting up an accounting system for your driving range is critical to the long-term success of your business.

Staying on top of taxes not only keeps the business out of trouble with the government, but the numbers can be used to track and monitor trends and cash flow in the business and maximize profits.

Related: Setting up the accounting for your business

The thought of accounting can be intimidating for a lot of new entrepreneurs. There are a number of ways of handling bookkeeping, from DIY to hiring a bookkeeper. These include:

- Pen and paper - Low expense, but difficult to track.
- Spreadsheet - Low expense, but easy to make errors.
- Accounting software - Medium expense, but owner typically inputs expenses. Some great accounting software programs include Freshbooks or Wave Accounting.
- Hire a bookkeeper - Higher expense, though very affordable at $100-$200 per month in most cases. A dedicated bookkeeper will probably save money because, in addition to handling all of the bookkeeping (so you can focus on the business), they also provide personalized tax advice and ensure the business is in compliance.

Find bookkeepers in your local area or use a service like 800Accountant.

How much does it cost to start a driving range?

The initial investment for a driving range will generally start at around $100,000. The largest expense is the purchase and development of the land, but machinery purchase costs are also significant. If a business owner can purchase or rent an existing driving range, they can save money over the cost of developing a range from scratch and face startup costs closer to $50,000 or less.

Some common startup costs for a driving range include:
– Property renovation costs, parking lot, artificial turf or grass
– Machinery purchases, like mowers and golf ball pickers
– Supply purchases, like golf balls, golf hitting mats, etc.
– Office equipment like cash registers, computers, and printers
– Signage

How much can a driving range owner make?

Driving range profits will vary tremendously depending on the business model, location, and years in operation. For instance, a driving range operating in a cold climate will only be open for business for part of the year, limiting its income potential. Adding heated tees can expand the range’s operating system, but not usually through the entire winter. A range in a climate that stays warm year-round, like California, can operate year-round and bring in higher profits.

To get a rough projection of what your range could make, here is a way to calculate:
Multiply the number of bays by the number of baskets of balls that could be hit each day from a bay by the cost per basket of balls.

For example, if a range is open for 10 hours per day and an average golfer takes 20 minutes to work through a basket of balls, then each bay has a total potential use of 30 times per day. If you are charging $6 per basket, each bay could generate $180 per day.

Of course, you won’t be at 100% occupancy each and every day, but by estimating your peak night and weekend times and slow early times on the weekdays while estimating the average weather impacts and you can come up with a reasonable sales estimate.

A basic token machine range with a snack bar stands to make less than a more elaborate range with luxuries like technology and a full restaurant on site. Plan to earn about $40,000 per year with a basic driving range and $100,000 or more with a more complex, modern range.

Many driving range facilities will add putting or chipping greens and bunkers so players can practice more. A driving range can generate additional revenue by offering golf lessons and having a pro shop on-site to sell golf clubs and accessories.

Seasonality can be an important factor in the profitability of outdoor ranges.  As most ranges are outdoors, variances in weather affect usage of the range.  Facilities impacted by weather will want to add heated tees to expand the season or have some additional revenue streams to bring in money during the slow months.

What skills are needed to run a driving range?

You won’t need a business degree to start a driving range, but certain skills and experiences can be particularly beneficial in this industry.

Golf experience. Experience as a golfer can help a business owner to identify what’s most important to their customers and develop their business to fill an unmet need in the golfing community.

Knowledge of golfing trends. Awareness of both current and possible future golfing trends will help a business evolve and adapt to the changing priorities of its customers.

Mechanical and technical skills. Driving ranges rely on lots of equipment, including mowers and computers, to operate on a daily basis. A business owner who can perform some troubleshooting and maintenance on this equipment can save money over hiring professional technicians.

Management experience. Experience hiring, training, and managing staff are valuable for any golfing range owner who needs to employ help.

Customer service experience. Interacting with customers is a large portion of running a driving range. Great customer service skills can help a range owner build meaningful connections with customers, encouraging them to return.

Are there grants to start a driving range?

It’s extremely rare to find a grant to start a driving range. If you search for business grants, you will come across a lot of scams and misinformation. Occasionally an organization will offer grants to start a business, however, be skeptical and don’t provide any sensitive personal information or pay money to get more information.

Legitimate federal grants can be found at Grants.gov, and you can check on your state’s economic development office to see if they have any grants available.

What is the NAICS code for a driving range?

The NAICS code for a driving range is 311811.

The NAICS code (North American Industry Classification System) is a federal system to classify different types of businesses for the collection and reporting of statistical data.

Related: What is a NAICS code?

Resources:
American Junior Golf Association
Ladies Professional Golf Association
United States Golf Association

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