I've been up and running for a couple months now, worked out a number of bugs and am starting to get some good traffic. I don't get much participation in the forums or commentary on the blog. I would love to hear what folks would like to see here, how I could encourage more participation and what you'd find of value. Please share your thoughts and comments. Thanks!
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.
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.
Have you played indoor golf recently? Do you run a golf center? Join our Indoor Golf Center Customer Satisfaction Survey.
We have decided to create a pooled customer satisfaction survey. Our premise is that we can all benefit from the results of an industry wide customer satisfaction survey.
By participating, you'll not only get the full details on any specific response about your golf center, but you'll also get an aggregate view of customer feedback for all golf centers.
Think about how powerful that would be. You'd get a much wider audience view on things like what incentives would encourage more summer play. The power of the pooled survey is that we can drive a lot more response that will create more confidence in the answers we are getting from the survey.
Please note that we are not collecting any personally identifiable information on the survey, so you can be assured of customer confidentiality.
Here is a link to the survey:
There are several ways to get your customers to participate in the survey. You can add the link on your website, you can email the link to your client list, or you can post it on your social sites like Facebook. We'll run the survey through March and then provide info to all participants.
Thanks for your participation!
You can vote and see the results or if you click on "View Results" below the survey, you can see the results without voting. Tell us what you are planning.
Let me know you're a real person, leave a comment