How to Start a Golf Course
Millions of people in the United States play golf regularly. Golf is a big business and also could be an opportunity for you to cash in. You could start your golf course, make money, and have fun being in control of your own destiny.
A golf course provides a place for people to play golf, usually offering both 9 and 18 hole games. The course may also offer food and beverages and sell merchandise.
According to the National Golf Foundation, 36.9 million people in the United States played golf in 2020. Three million people played golf for the first time in the same year. According to Statista, the golf course and country club industry size is projected to reach $24.65 billion by 2024.
The industry size increased during the pandemic because it is an outdoor activity and not impacted by the restrictions put in place compared to other activities. Younger people are becoming a larger customer segment, as are women.
Your target market will be those who love to play golf.
Skills, Experience, and Education Useful in Running a Golf Course
There are several specific skills that you will need to open a golf course.
- Experience. Experience working in a golf course is valuable, particularly in management.
- Knowledge. While you don’t have to be a pro golfer, extensive knowledge of the sport is essential.
- Business knowledge and experience. You will need to have at least some basic knowledge of marketing, finance/accounting, and human resources.
- People skills. You’ll need to be able to build rapport with your customers so that you retain them as customers and keep them coming back.
Checklist for Starting a Golf Course
Whether you’re a seasoned pro or this is your first time starting a business, there are some important things to keep in mind. Use this checklist to help get started and make sure you have all the bases covered.
Step 1: Write your Business Plan
After coming up with the idea, the next step in starting your golf course should be to write a business plan. The business plan will make you focus on some important aspects of the business, such as who your customers are, how you plan to reach them, projecting sales and expenses, your value proposition to use for marketing, and more. You’ll also need to do some research to calculate exactly what your start-up expenses will be and what your ongoing expenses will be.
Not only will a bank require you to have a business plan if you need financing, but multiple studies have shown that having a good business plan increases the odds of starting a successful business. Writing the plan helps you to think through all the aspects of the business and then serves as a guide as you begin.
Related: How to write a business plan
Step 2: Name the Business
Finding the perfect golf course name can be challenging. Not only does the name have to reflect what you do and be appealing to customers, but it also has to be available to use. You can check your state’s website to see if the name is available and register your name. Your name should make you stand out, reflect your brand, and tell potential customers exactly what you do.
Step 3: Form a Legal Entity
A business entity refers to how a business is legally organized to operate. There are four primary business entities 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 golf course, 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 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 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: 3 steps 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 4: Select your Location
You will need to find land for a golf facility that is not far from where people live and work, preferably with high road traffic for visibility and affordable land costs.
Investing in a golf course architect is strongly encouraged as they can help reduce construction costs, design proper drainage, and select lower maintenance landscaping.
Related: Choosing a business location
Step 5: Apply for Business Licenses and Permits
You may need to obtain certain business licenses and permits. These permits and licenses can vary based on the state and town where the business is located.
Some areas heavily regulate certain chemicals that would be used on the greens to reduce their environmental impact. Be sure to check on any restrictions before applying chemicals on the property.
Check with your state for specific license and permit requirements for your golf course. Some common licenses and permits may include; a business license, sales tax permit, and an Employer Identification Number (EIN).
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 golf course is another. In order to get a loan, the borrower(s) will need to have good credit and be able to invest 15-25% of their money towards the total start-up costs.
Step 7: Open a Business Bank Account
Keeping your business and personal finances in separate business bank and credit card accounts makes it easier to track the income and expenses of the business.
Step 8: Get your Marketing Plan in Place
Marketing and acquiring customers will be your biggest challenge and an ongoing expense. Your location is critical to getting customers, so choose wisely. It’s important to continually reach new players and keep existing customers coming back weekend after weekend.
Common marketing techniques for a golf course include advertisements on social media platforms, online advertising, and marketing through tourism publications. Developing a website can be a significant expense, but it can also give your golf course greater visibility online.
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
A golf course needs several types of insurance to fully protect the business. A few of the more common types of insurance include:
– General liability insurance can help protect you from third-party claims of bodily injury and property damage.
– Professional liability insurance protects you from claims of professional errors or negligence that result in a financial loss.
– Worker’s compensation insurance covers expenses like medical bills and legal fees that a business might face if an employee were ever hurt while working.
Insurance policies will vary. To get the most accurate idea of what to budget for insurance, request quotes from multiple providers. When comparing the quotes, consider not only the premiums but also how the plan exclusions, coverage limitations, and deductibles compare.
Step 10: Hire Employees
Golf courses are labor-intensive businesses and several employees will be needed to help run and maintain the golf course. Make sure that you select people with appropriate experience and training.
In addition to salary costs, your budget will also need to include other employee-related expenses. Workman’s comp insurance, unemployment insurance, and paid time off are common expenses that a business will need to cover when hiring staff.
Payroll costs are often the largest operational cost for a golf course and average 25%-30% of total sales.
Related: Hiring your first employee
Step 11: Set up an Accounting System
Setting up an accounting system for your golf course 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.
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 golf course?
Here are the typical costs you will face when you open a golf course.
– Land for the course – $200,000 – $5,000,000
– Land preparation and course construction – $100,000 – $2,500,000
– Clubhouse facilities – $300,000 – $1,000,000
– Mowers – $25,000 – $100,000
– Golf carts – $30,000 +
It is expensive to start and run a golf course, so you will be taking a big risk and making a considerable investment. You will need a solid plan to get enough customers to make money. One way to reduce the number of acres of land is to shorten some of the longer par holes and reduce the overall par of the course.
How profitable is a golf course?
Your revenue is hard to predict, and it is highly dependent on your location and how long the course can be used during the entire year. Revenue is generated from membership fees, greens fees, food and beverage, and extra revenue can be generated from merchandise sales if a pro shop is added.
Membership fees could be as much as $1,000 – $5,000 per year. If your membership fee is $2,500 and you are able to get 1,000 members, your revenue from memberships alone would be $2.5 million.
Are there grants to start a golf course?
It’s extremely rare to find a grant to start a golf course. 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 golf course?
The NAICS code for a golf course is 713910, which is categorized as golf courses and country clubs.
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.