How to Start a Golf Course

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Quick Reference

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.

Business Overview

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.

Industry Summary

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.

Industry Trends

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.

Target Market

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.

Costs 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 – $500,000
  • Land preparation and course construction $100,000 – $250,000
  • Clubhouse facilities $300,000 – $500,000
  • Golf equipment $10,000 – $20,000
  • Golf carts $30,000 +
  • Initial marketing such as Facebook ads or search engine optimization for your website $500 -$1000

Steps to Starting a Golf Course

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
Free sample business plans

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 legal entity refers to how a business is organized to operate. There are four primary business entities to choose from, which include a sole proprietorship, partnership, corporation, and Limited Liability Company (LLC).  Each type of entity has its own pros and cons, such as protection of personal assets, costs, and administrative requirements.

RelatedComparison of Business Entities

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.

Having 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.

Check with your state for specific license and permit requirements for your golf course. Some other common government regulations may include; a business license, sales tax permit, and an Employer Identification Number (EIN).

Related: Common business licenses, permits, and registrations by state

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.

Related: Finding the money to start a business

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

A golf course will need to set aside a budget to cover marketing costs on a continuous basis. 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.

Related: Low-cost ideas to market a new business

Step 9: Get Insurance

A golf course needs several types of insurance for full coverage:

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.

Related: Common types of insurance a business may need

Step 10: Hiring Employees

You will need employees to help you run your 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.

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.

Related: Setting up accounting for your business

How Much Can You Potentially Make Owning 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.

Things to Consider Before Starting a Golf Course

Running a golf course or any business will have its challenges.  You need to be prepared and make sure that you know what you’re getting into.

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 keeping existing customers coming back weekend after weekend.

You will face competition, so your course needs to be well designed to be successful.

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.

You need to remember that depending on your location, your business may be seasonal, so you need to play for your down times.

Talk to other business owners for tips on starting a business and do your homework to determine costs.  Research other golf courses to see what they offer and what prices they charge.

Resources:
American Society of Golf Course Architects

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