Those of you who read my blog know I really like data and companies that do a good job pulling it together in informative ways. I ran across a new favorite today called SizeUp. In about 5 minutes of surfing their site, I found a quick way to identify potential opportunities for golf centers. They have data on businesses and population. Putting the two together, they identified the top 25 markets with over 100k in population with the lowest golf revenue per capita.
Obviously, I would do more research on the market before just jumping in, but this is a cool way to look at how one city compares to another for an industry and could help inform you in starting your next business. The widget doesn't show the whole picture on my site, so check out their page and try it out yourself. You can edit the orange text to change chart.
I've decided to share a few sections of our free indoor golf business plan to help you decide whether or not to go for the download. I've shared our executive summary and SWOT Analysis to give you a good sense of what our free business plan covers (click to get the plan).
Running an indoor golf business involves creating a facility where golfers play rounds on a golf simulator that projects an image of a course and uses sophisticated sensors to depict the real shot in a virtual environment. There are many of these businesses existence, and success turns on 4 basic items:
This business plan will address each of these four items and a bit more.
The GolfPlex (working name) is a high end facility incorporated in City, State designed to provide entertainment via high definition full swing simulation golf. The golfing entertainment will be complimented with good food, beverage, golf merchandise and attractive surroundings.
Our goal is to provide the (City) golfer, and eventually golfers across the US, with an enticing alternative to outdoor golf when time, weather or proximity prohibit traditional play. We provide a realistic golf experience in a comfortable environment, turning the local golf season from 180(?) days to 365 days per year.
Each of our (6) state-of-the-art golf simulator units will be linked to allow competition and record keeping. Customers will be given the option to register a user name with the center and keep track of their scores, see how they stack up with other users of the system, and track their performance throughout the year. Game software will also allow for tournaments to be played with real time scoring and statistical breakdowns of the entire field. It will give customers a quantifiable depiction of their golf game and will allow them to improve their skills.
A group of four can play 18 holes in about 2 hours on a wide variety of courses for only about $25 per player. Compare this to a 4-5 hour round on a local golf course that can cost anywhere from $45-$90 per player depending on where you play.
Strengths – A key strength is in the product delivered by HD GolfPlex. Our simulators are top of the line and provide a realistic golfing experience with very accurate shot simulation. Our facility is also a key strength in that it is high end and provides key amenities local patrons seek in both golf and entertainment. Our staff is friendly and helpful. A final strength is in developing a strategic plan focused on customer centric operations and an information-based marketing strategy. There are a number of golfer oriented marketing databases we can leverage while we build our own data.
Weaknesses - A main challenge will be scheduling to keep the center full. Weekday business hours and weekend days with great weather are likely to be off-times for the business and show a lower utilization. Leagues, corporate events, and other creative ideas and activities will be critical to keep the place full all day, every day. Our other weakness is the technological complexity of the simulators. We’ll be reliant on the manufacturer for service or will have to develop in house technical talent for maintenance and repair of the simulator units.
Opportunities – One opportunity is to partner with local golf courses and clubs to offer offseason memberships. Merchandise sales and club fitting is another opportunity – we could leverage local distributor reps to do demo days, have demo and fitting sets on site and offer extended fitting and playability sessions. The simulator units also have the capability to display advertising, but feedback from the vendor indicates this is best used for in store promotional activity versus seeking ad revenue. A final opportunity would be in the hiring of or partnering with PGA trained teachers to provide lessons and coaching for clients. Research so far indicates that teachers keep lesson fees, so this would just be a strategy to keep the simulators running. One other idea is to focus more on video game or private sporting party clientele in the golf offseason as the projectors can be attached to a receiver to show TV or video games. Could target alumni groups to show / host their football games.
Threats – The main threats are competition or issues with the simulator manufacturers. Competition could be from other similar businesses or Sports Bars as they could add a simulator. There are (number) of Indoor Golf facilities in the area so far. The closest is (#) minutes away. Competition from Sports Bars is a possibility as is competition from golf retailers like Dicks or Golf Galaxy, both of which have a single simulator for club testing.
Get our plan here
Could corporate fun budgets be an untapped source of potential customers for your indoor golf center? Wouldn't it be great to get a new stream of customers at a time when your play is likely at its lowest!
Fun budgets are quite often the core of the "mood and morale" efforts at your local businesses. They are used to show appreciation to employees, build team spirit and grow engagement. It seems ever corporate manager has read "1001 ways to reward employees" and has implemented some sort of budget process and team to improve morale in their team.
If approached correctly, this could be a great way to fill out your tee sheet during business hours and could lead to new customer introductions. You just need to find a way into the minds of the "fun event planners". Having worked at a number of companies that budget for team building and fun events, I thought I'd share a few ideas to help you out.
Start by creating a package that you think would work for a corporate outing and build materials to spread the word (webpage, fliers, in store signs, etc) . Captains Choice with a meal / beverage plan is probably the way to go since not all visitors will be experienced golfers. I've found that a $50 budget per person is an average fun budget. Build a list of the biggest local employers. Try to work your way in through a couple of avenues:
What is keeping you from opening your indoor golf center or adding indoor golf to your current facility? Is it a fear of the unknown, worry about the worst case scenario? Or is it more a lack of time or money? Perhaps it is a lack of advice, information, support or confidence. Let's hear from folks on what they think it preventing them from getting "around to it". I gave you a round tuit at the left, now give me your thoughts. . .
With the continual advances in technology and the wide range of options, choosing a golf simulator can be a daunting task. By understanding the key features of a golf simulator and comparing them to your needs, you can narrow the field rather quickly and hone in on the best choice for you. We'll review many of the key features here to give you a jump start on your research.
Determining if this is for Home or Commercial Use is the best place to start. Are you looking for something for your home or for your business. If you are looking for your home, the most important considerations will be your budget and your space. If you are looking for your business, there are many more features to consider and we'll address many of those here. These may also be helpful to get an understanding of features for home use.
Price. This is an obvious consideration as we all live on a budget and even our businesses need to carefully consider costs. For a functional full size system, you can expect to pay anywhere from $5,000 to $60,000. Most systems designed for commercial use will fall in the mid to high end of that range. The price will be driven by the choices you make in the options below.
Graphics. You need to figure out if you want 2D, 3D or photo-realistic graphics. In addition, do you want the image to fly with the ball or stay static from the tee. Simulators will also come with HD graphics, wide screen formats and real time rendering of images Speed of rendering is a critical component for most commercial applications as customers don't like waiting for images to load.
Number and type of courses. The number of courses will drive the price. Many simulators have standard packages that you can start out with and add to later as you desire. Some include new course downloads in their support, others require you to purchase them. Folks in commercial use situations also look for famous courses as they are often requested by clientele. Having more and famous courses can help drive indoor golf revenue.
User interface and game modes. Many of the high-end systems now come with touch screen control panels to help with set up, aim, mulligans and more. Some systems also come with options for internet gameplay and tournaments so you can compete against other players around the world. You may also want to look for options to play different types of games like best ball, closest to the pin and long drive contests.
Golf swing analysis. There are several different methods for golf simulators to provide for swing analysis. Many of the top line models offer one or more of these methods. Club path analysis shows the swing path, clubhead speed, position and angle of the face at impact. Ball flight analysis will look at launch angle and spin rate. Lastly, video capture allows for instruction and feedback on particular parts of the swing sequence.
Support and maintenance. You also need to pay close attention to the support that comes with the product itself. Look at the length of the warranty, what it covers, whether there is remote support available, and if there is any sort of installation support. Also ask about life of the parts and replacement costs for things like projectors, screens, bulbs and mats.
Most people close to indoor golf know it is a seasonal business. Our golf center survey found that business is much more robust in the cold and wet months than it is in the warm and dry ones. No big surprise there. What is interesting is that the trend for "indoor golf" searches on Google is seasonal as well. Notice how the index from Google below shows that indoor golf searches peak around January each year and tend to bottom out in the May through August period.
What does this mean for your indoor golf business?
It means that your off season marketing efforts need to be broader than just talking about indoor golf. Be creative, look for ideas that align with search trends, provide what folks are looking for in your area. An example is "Golf League" in the chart below. It's peak will perfectly correlate with the off season bottoms on indoor golf in terms of search trends. Get creative, do your research and find ideas lie golf lessons, golf tournament, or golf coupon (I know those aren't too creative, but they do better support summer search patterns than indoor golf.
Being in a good and accessible location that matches your target customers is a key to running a successful indoor golf business. Research on the indoor golf industry points to a few keys to determining the best location for your indoor golf center. It is also critical to make sure you are not paying too much for your location in order to keep your expenses in line. Based on our research, some of the keys to site location include the following:
The higher the proportion of home ownership there is in your target area, the more rounds of golf you are expected to be able to support. This means a higher percentage home ownership in the zip where you are locating, indicates a higher propensity for playing golf. In addition, the average home price tends to also help predict the volume of rounds played. The higher the average home price in a zip, the more rounds you can expect. Look for information on the web about your target zip code and see home prices, percent renters, income and more.
Number of golfers in a 10 mile radius:
Not surprisingly, the number of golfers in a 10 mile radius from an indoor golf center were strongly correlated with the number of rounds reported by that golf center. The more golfers in the radius, the better for your golf center. A great place to find this sort of information is from marketing list companies. They gather information on golfers from things like magazine subscriptions and website registrations. Some may provide you these numbers as part of the process to price a list and you can get the number without paying for the list.
This probably doesn't help pick an area within a city, but can give you a sense of how viable a given city is for an indoor golf center. The higher the number of rain / snow days there are per year, the higher the number of rounds played. Indoor golf centers in the United States experienced as many as 156 days per year with rain or snow, while others had as little as 90 days. Centers on the high end of this range get more play.
Average Annual Daily Traffic:
I am including this as a probable driver of rounds played, as traffic data was somewhat difficult to get with enough precision to be confident in analysis. That said, with a high number of first time visitors during the first year of an indoor golf center business, it stands to reason that a higher volume of traffic outside a location would be better than a location with lower traffic. The traffic statistic in question is often called Average Annual Daily Traffic and most reports abbreviate it as AADT. You may be able to search for it on the web for your target area in question.
I am starting to compile a list of all the golf centers in North America - please help with edits if you can. If you have edits to the table below, they can be made here (click to edit file)
That's the title of an interesting article I read on the Economist tonight. Here's the hook for you golf business owners:
A recent study shows that bosses who don't play golf get paid on average 17% less than bosses that do play golf.
How's that for a marketing campaign for your golf facility. Come play golf and get a huge raise. Sure, that's not how it actually works, but interesting empirical evidence shows that what golf teaches you helps you get ahead.
The article attributed the pay increase to more schmoozing, but I choose to believe that it is because of the virtues of the game develop character that helps develop better leaders. What do you think?
I've recently run across a website called Bundle. It creates ratings on business based on spending patterns accumulated from credit card transaction data. It is all free for you to use. According to the bundle website:
"We use anonymous, aggregated spending data to rate businesses based on factors such as how often people go back, how many people go there and how much people actually spend. Using this data, we can learn a lot about whether a place is good, and further, whether a place is good for you."
I've now spend a little time on this website looking at indoor golf centers. I think indoor golf center owners and potential owners have a treasure trove of information here about their business. Here is an example of the kind of information on the website - I've removed the name and location of the center:
The first page on customers gives a pretty concise view of where customers are coming from and how the business ranks on popularity versus other local recreation.
In this example, 17% of customers are from the same zip as the facility and 69% are from the same county and almost all are from the same state. This does seem to vary a bit by location and it is worth checking out your own statistics.
This could be helpful in understanding where to spend your marketing dollars. The next set of charts they provide cover when your customers come to your facility.
This points to some opportunities around growing Tuesday through Friday traffic with targeted offers, leagues, demo days or other specials.