By Team foreUP on Jul 17, 2018 11:22:57 PM
Buying a golf course is a challenge. You need to look through golf courses for sale, consider the cost, the location, the connections, and playing season – and that’s just the start. You also need to see what work the course may need and other potential renovations as time goes on.
But you can’t just stop at setting yourself up for success on the purchase of your course. Being a golf course owner requires a lot of work and business savvy. You need to be prepared to:
–Maintain holes and the rest of the course
–Run a clubhouse
–Invest in capital improvements
–Create programs for golfers
–Hire and manage employees
The more experience you have with golf, the easier time you will have when it comes to making
decisions that keep your course enjoyable to patrons, while business skills will help with the
major management aspects. To make sure you’re prepared, read on to learn what you can expect when you finally lock down that course purchase.
Day to Day Activities
The specific daily activities of your golf course will depend on what seasons you are open for
business. During golf season, you'll focus on necessary maintenance to keep everything running smoothly, such as watering and mowing courses appropriately and repairing broken equipment.
On the customer experience side, you'll attend to golfers who need help and collect necessary course fees.
Your off season, when there's less business or your course may not even be open to golfers, is
suited for more intensive activities like non-emergency repairs and more extensive routine
maintenance tasks. This time is also suitable for working on capital improvements.
Income, Expenses and Profit
Your largest source of income will be course fees, which will make up a significant portion of
your revenue. Even so, you have other options for bringing in income, such as selling equipment, renting golf carts and other pieces of equipment, providing lessons, and selling food and beverages. If your clubhouse has a restaurant, you can also expect income from there as well.
Your ongoing expenses will include course and building maintenance, as well as covering your
Profit is a tricky thing to work with when it comes to a golf course. There’s a chance that when you bought your golf course, it was for a lower price than it would have sold for years ago. Between 1986 and 2005, over 4000 new golf courses entered the market, leading to an oversupply in a currently declining market.
It’s not to say you can’t turn a profit with a golf course, but you should be cautious of the potential difficulties in doing so before you start. There is a chance you will only break even.
You should form a solid business plan moving forward so that you can see profit and growth.
Key Business Steps
Beyond making a business plan, you will also want to:
–Establish a legal business entity so that you are not personally liable if someone files a lawsuit against your course.
–Open a business bank account and set up appropriate business accounting to have a professional financial presence and keep your finances organized.
–Obtain all necessary permits and licenses for golf course operation to avoid potential fines and other legal complications. When you purchase a course, you will need the proper certificate of occupancy to show your course meets all building codes, zoning laws, and government regulations.
–Understand your brand so that you can portray your business effectively to the public
–Check the registry for all applicable federal and state taxes.
–Have appropriate business insurance for both workers' compensation and property protection.
–Maintain an active web presence with a strong business website and the use of social media.
When purchasing an already existing golf course, it’s likely many of these elements will already
be in place. However, as they will be your responsibility to maintain, you should understand
what is already in place, what you will need to update, and what business aspects you can expect to handle in the future.
Building Your Team of Employees
Due to the substantial number of tasks at hand on a golf course, you will need a capable team in place. The average number of course maintenance staff members is 17, including year-round
workers, seasonal employees, and independent contractors. These are the workers who will take care of your course so that golfers may use it smoothly.
In addition to course maintenance, you will also need additional employees. These staff members will be responsible for collecting course fees and assisting customers with memberships, providing lessons, and operating other functions in your clubhouse and/or restaurant.
When you purchase an existing course, you will likely not need to build your team from scratch.
Even so, you should understand the scope of the employees necessary to keep your course
running smoothly, learn about the members of your team, and consider how the expense of
payroll fits into your overall operating budget.
Maintaining Your Customer Base
Since your primary source of income will be from course fees, keeping your customers satisfied
will be one of your foremost responsibilities. The ideal customer for any course is anyone who
enjoys the sport and has enough disposable income to golf on a regular basis.
Returning customers will enjoy a course that provides a challenge as well as other course
benefits. Membership programs that offer special perks to customers, regular lessons and events, and well-maintained clubhouses all contribute to a satisfied returning customer base.
With golf club memberships on the decline, you will want to use every opportunity at your
disposal to bring in new customers. Social media, online, and radio advertisements aimed at area residents provide effective marketing opportunities. Giving different sign-up benefits and
offering your existing members bonuses for inviting new people to the course also are potential
ways to bring new blood to your course.
Running a golf course can be every bit as much of a challenge as purchasing one, so you need to be ready to step up to the plate. Knowing what you’re in for can help you get prepared so that
once the deal closes and that course is yours, you can face your new responsibilities with confidence. Whenever you need guidance, foreUP can help you get ready.