Golf franchise business opportunities review
March 8th, 2008With the economy slowing and many people worried about their career and possibly their livelihood, some with an entrepreneurial spirit may want to look at all the possibilities in the golf world. Golf has seen explosive growth over the past 10 years and combining one’s passion and career has never been a bad choice.
Golf business opportunities for those wanting to own their own business vary greatly in start up costs, lifestyle and what factors influence success. The main areas for golf business opportunities are retail stores, teaching facilities, driving ranges, golf courses and golf design and installation. We will take the sectors one at a time and discuss the costs, lifestyle and factors for success.
Retail Golf Shops
Retail businesses depend greatly on location. Any business depends on location, but if you want to cover the overhead that is required to build and maintain a retail golf shop, location is probably the key factor. Overhead is another. Finding the right balance between the publics desire for your products, most popular brands and offerings and offsetting these with the interest or upfront payments is very difficult. What products are you going to carry? What amount? The one thing that can kill a retail golf business is to have inventory that is outdated. You must have the correct products, the correct amount of that product, get this inventory out the door before the next batch comes along. The costs of start up are high, your factors for success are location and inventory management. Overhead, rent, labor, utilities, advertising and interest payments on inventory, is very high. With heavyweights like Edwin Watts, PGA Superstore, online sources like TGW (the golf warehouse) and competition from every golf course that exists make the job of separating your store building a loyal following extremely difficult.
The final factor is lifestyle and again this is where a retail store is very difficult in the beginning. You are tied to the space for hours, weekends and holidays. Long hours and at least in the beginning a schedule that is not very flexible.
Teaching Facilities
A new segment of the golf industry has popped up in the past 10 years or so, the indoor teaching facility. The technology advances in video, light sensors, movement sensors and digital analytics have found their way into most teaching facilities. These wonderful contraptions do not require the teacher to see where the ball is hit. They can build a golf swing without ever seeing a golf shot longer than 10 yards.
These indoor facilities are similar to retail golf shops in that they have rent and overhead. The product is not inventory, but intellectual in nature. The costs up front include all the analytical equipment, build out of the retail or office space and the hiring of staff and teachers. Also your marketing and advertising costs to drive people in for a lesson or evaluation must be considered.
The factors for success depends on your technology, teachers who run and analyze the technology and the reputation you build in the community. Your revenue stream is limited to the hours taught and series of lessons sold. The competition works at every golf course and driving range. Large metropolitan markets will probably work best where golf is not readily available.
The lifestyle considerations are similar to a retail store. Because the facility is indoor, you will probably want to book lessons as late as 9 p.m. Evenings and weekends are definitely part of the equation.
Driving Ranges
Land and location must deliver the right fit for the large start up cost and the ability to drive traffic to service the debt. The higher quality facilities continually re-invest and update the property. Those that don’t update seem to die a slow death. The first factor and most important will be the cost of the land.
Long hours are also part of a driving range golf business. Open all the time even with lights in the evening will be required. If you can instill the proper controls to ensure your staff is honest, the required level of expertise is minimal leaving you with a managerial role and less time glued to the property.
Golf Courses
Finding the right property to build a golf course or the right course to take over and improve requires years of experience or requires hiring the proper consultants with the year of experience. The advice of this author is to make sure the course is walkable. The competition out there today will make it very difficult to survive long term if the property is not walkable and takes 5 hours to play.
Servicing the debt of the construction or the cost of purchase can be done through the profits of a driving range, greens fees and golf shop sales. Hosting outing, tournaments and if possible using the clubhouse facilities are all possible revenue streams.
The start-up costs are extremely high and in this current market getting financing would be difficult. Management and accounting experience in similar types of business would be required. The most important employee on the property needs to be the superintendent. The asset will be the golf course and if it is not maintained properly, the business will not survive long term.
Your lifestyle could be great if you can put all the pieces together and make the property profitable. There is huge upside and downside risk. Factors from the weather, taxes on golf courses, location, design and playability all must be considered to make this business work.
Golf Design and Construction
This is a low start up low overhead business that is project based. If done properly, the costs would be figured before any type of work began and the profit would be known within a few percentage points during the research and concept phase. Since you are reading this blog from a synthetic turf site, you will no doubt understand we put ourselves in this category.
The lifestyle is terrific and up to you to decide what you want to work on. Customers could include land owners, developers and commercial properties. Single family residences are the largest potential customer base but multi-family housing, schools, churches, and any property with open spaces could be the canvas you design and construct golf greens, shots and holes.
The factors for success depend on your ability to build an organization that will help you build a business. With the help of a company like IntelliTurf Franchising, Inc. you will have the tools and knowledge necessary to build a great company.
Low start up, flexible schedule and a market that is still in its infancy lead to a possible business opportunity in the golf business that would appeal to you. The competition is not the PGA Tour, established golf courses or top 100 golf instructors.
We invite you to investigate the thoughts touched on earlier in this entry and see for yourself why a design and construction business is the best opportunity in the world of golf today.