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.
12/2/2019 09:20:19 am
I truly appreciate the information that I have received. But my biggest concern is raising capital to get it started . Any thoughts?
12/2/2019 09:45:15 pm
Barbara, thanks for your note and compliment. We did ask about funding in our study. What I found is that most owners used a combination of sources. 2/3 tapped personal savings, a little over 1/2 had a bank loan, about 1/3 had friends and family as investors, just over 10% had an SBA loan, and just over 10% had an angel investor. Yes, that adds up to more than 100% as most folks had multiple sources of funds to startup.
Herman W Redd
8/22/2021 03:27:08 pm
If a potential space leasing firm is willing to except a percentage of the income, what should that percentage be? Is this arrangement an acceptable approach?
8/22/2021 04:31:12 pm
Herman - I am not an expert on commercial real estate, but here are my thoughts. I might start by determining what the typical rent would be without considering the revenue share. Once you have that, you can see how that stacks up as a percent of your forecast revenue. For example, if the average rent would be $2,500 a month and you expect to generate $25k a month in revenue, the equivalent would be the leasing firm taking 10%. My example uses made up numbers so I am not asserting 10% is a good number. If their percentage offer is below your calculation, it might be a good thing. If your revenue is lower than expected, they'd be taking less rent. If it is higher they'd be taking more. The approach gives you some flexibility on the downside, but takes away some of your upside. Again, I am not an expert in this space and would suggest running any deal by an attorney for input.
8/6/2022 02:20:56 am
I really enjoyed your blog post
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