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
Its been a pretty good winter and hopefully that has meant strong traffic for indoor golf centers. With some really warm days this weekend and folks starting to get outside, I thought I'd take a quick peek at one section of our Golf Center Owner survey around increasing play during good weather.
The chart to the left shows responses to what things golf center owners feel provide the most lift in terms of increasing play at their stores.
Leagues and discounts / promotions were reported to be the most effective in increasing play.
Memberships and Corporate events were also reported to be good ways to increase your customer volume.
Before play starts to slow down, get some information up in your golf center about spring and summer leagues, membership specials and corporate fun events. The best time to get the word out is while people are still in your facility. It might even be good to talk to them and get feedback on times and days that would be most effective for league participation.
Corporate events might be a good avenue for getting mid-week traffic as explained in our last article on "fun / team building budgets". Another interesting option is to work with local colleges to offer a continuing study program on golf as explained in more depth in this blog article.
What other creative ideas are you finding help increase play during the summer months?
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.
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 most are in colder climates.
If you are considering opening an indoor golf center, success turns on 4 basic items:
Depending on the size of your facility and the amenities, start up costs can be significant. Many indoor golf centers start small and grow as they see their revenues grow. Others take a decidedly more ambitious approach and build a premium facility from the start. Choose a path that makes sense for you, your budget and matches your clientele.
One of the major expenses will include the cost of the golf simulators. For a commercial operation, these can run as little as $15,000 or as much as $60,000. Price will depend on a host of factors, software features, number of courses and size of the system. Some facilities mix the simulators, purchasing several basic ones and one or two high end systems. This enables them to offer premium services without the extra start up expense.
Another start up expense will be your facility costs. In most cases, facilities will be leases, but a few do chose to buy / build a facility. In the event you are doing a commercial lease, there will likely be build out expenses to suit your specific design. It may make sense to get help from a commercial real estate pro to help you negotiate these as part of your lease.
The types of complimentary services you chose offer will drive other start up expenses. If you are going to do food and beverage, you will have a few other costs. Licensing for food and beverage will be one such expense. Building out a kitchen will be another. Even a low end kitchen with used equipment will run over $20,000. Don't forget about marketing, recruiting, website, network and signage expenses.
Take a look at all your expenses and figure out which ones are the keys to your success. Be sure to get the right equipment on the items that are critical to your success and perhaps defer those that are not as critical until after you have a strong revenue stream.
We took a look at the impact of geography on golf center performance. As a proxy for geography, we assigned each of the golf centers in our study to a planting zone (think gardening planting zones where 4 is up north and 9 is down south). We than took a look at hours per month per simulator to see if we noticed any trends based on geography. For the most part, the farther north a facility, the more hours per simulator and more simulators the geography will support. The cart below is based on average monthly hours per simulator, peak months are much higher and low months are a good bit lower. There are some impacts from age of the indoor center here as some of the southern facilities are a bit newer and new centers tend to have a bit less traffic than established centers.
In our 2013 survey, signals of optimism abound. We asked several questions about upcoming plans ranging from opening a new center to adding staff to shrinking facility hours. We were quite pleased that so many golf centers are reporting planned increases in advertising, staff, and hours. Additionally a high percentage of respondents indicated plans to open a second center or to upgrade their simulators.
In our infographic below, you can hover over the shapes to see the percentage of respondents answering each question and how they answered. I.e. New / Upgrade Center will show 44 which means 44% of respondents indicated they'd be opening a new or upgrading their current center.
An encouraging sign from the survey is the increase in the percentage of visits from repeat customers. As a golf center matures, it appears its clientele is increasingly made of up weekly golfers. How does your center stack up and what are you doing to increase repeat visits?