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How To Start A Driving Range

How To Start A Driving Range

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How To Start A Driving Range

How To Start A Driving Range

There’s something so therapeutic about the act of hitting golf balls. Every swing requires concentration, and standing on the driving range for a few hours isn’t just a way to develop your technique; it’s also a chance to get away from the world. If you’re a golf enthusiast, starting a driving range of your own could be a business venture that’s financially and emotionally rewarding.

Setting up a successful driving range requires more than just an understanding of the game or entrepreneurial drive. But worry not! This comprehensive guide will walk you through everything you need to know to get started.

Business Overview

Driving ranges give golfers a chance to practice their swing without playing an entire game of golf. These ranges typically have markers designating different differences, allowing golfers to monitor their progress. Driving ranges save golfers from having to walk courses or rent golf carts, acting as a designated practice facility. Many golfers will spend a few hours at a driving range, where they rent buckets of balls to hit.

At their most basic, driving ranges are large practice spaces, but technology like electronic tee devices and heated tee areas are available at some ranges. Some golf courses include driving ranges, but it’s also possible for a range to operate entirely on its own, especially when access to golf courses is limited in the area. Ranges typically feature some sort of snack bar. Some also pair with restaurants, arcades, go-kart courses, batting cages, and miniature golf, offering versatile entertainment for families and their kids.

It’s important to carefully consider your audience when designing and planning a driving range. If you’re catering more to beginner golfers and families, then you may want to incorporate other entertainment options, like video games and go-karts, to encourage families to spend an entire day at the range and increase their spending. If you’re marketing more toward serious golfers, then investing in technology and setting up a restaurant on the property can encourage those golfers to make frequent, longer visits.

Industry Summary

The driving range business, as a part of the golf industry, plays a critical role in providing golfers of all skill levels a place to practice and improve their game. The golf industry has experienced steady growth over the past few years. The National Golf Foundation estimates that 41.1 million golfers, age six plus, in the United States played some form of golf in 2022.

According to IBIS World, the golf driving range and family fun center industry is expected to generate $16.8 billion in 2023. That growth was largely due to the increase in household incomes that occurred over that time. With higher incomes, consumers were able to spend more on leisure activities.

The United States Golf Association reports that multiple trends affect golf course and driving range maintenance today. Courses in the Western part of the country are increasingly facing water shortages, causing them to replace turf with less maintenance-intense low-water grasses. GPS-guided sprayers allow courses to deliver precise treatments, saving both time and chemicals with every course treatment. Because many courses are now operating with fewer employees than they previously had, courses use riding mowers to mow greens and tees to save on labor.

According to Morning Read, the modernization of driving ranges has made them “fun again.” Driving ranges are doing things differently to keep golfers practicing longer. Some of those changes include:

  • Offering climate-controlled hitting bays for golfers’ comfort
  • Playing trendy music
  • Implementing technology, including launch monitors and simulators, so golfers can virtually play against each other
  • Creating short-game areas
  • Delivering video lessons
  • Staying open at night

The traditional driving range is evolving, but these new ranges are popular with avid golfers and customers who don’t have much golfing experience.

Target Market

Many driving ranges have multiple target markets, but generally includes:

  • Golf enthusiasts of all skill levels
  • Beginners and casual golfers looking to practice and improve their game
  • Golfers who want to warm up or work on specific aspects of their swing
  • Individuals who enjoy recreational sports or outdoor activities
  • Families and groups looking for a fun and leisurely activity together
  • Golfers who want to test and compare different golf clubs or equipment
  • Golfers who may not have access to a full golf course or prefer a more accessible and affordable option for practice
  • Golfers preparing for tournaments or competitive play, who require focused practice sessions

It’s important to consider the local demographics and golfing community when defining the specific target market for a driving range.

Checklist To Start A Driving Range

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Starting a driving range can be an incredibly rewarding experience, but it’s important to make sure you’re prepared for the challenges ahead. Use this checklist to help get your business off on the right foot.

Step 1: Research the Market

Even though you may be a golf expert, before starting any new business venture, it’s crucial to research whether there is enough demand in the marketplace. For a driving range, this means understanding the interest in golf and the need for practice facilities in the local area.

Understanding the market demand before launching a driving range has several benefits. It reduces the risk of failure, informs your business strategy, helps with location selection, and aids in securing funding as lenders and investors usually prefer businesses that can demonstrate a real market need.

There are several ways to research whether there’s a sufficient customer base to start a new driving range:

Local demographics: Use demographic data to understand your potential customer base. Information such as age, income level, and lifestyle interests can provide valuable insights. Cities or regions with a higher number of middle-aged and older adults, who traditionally have shown more interest in golf, may present a promising market.

Census.gov, along with the local Chamber of Commerce and economic development office should have access to this information.

Competitor analysis: Analyzing existing driving ranges and golf facilities in the area can reveal a lot about the market. If these facilities are thriving, it may indicate a high demand for golf-related services. If they are scarce or non-existent, it could either signal an untapped market or a lack of interest in the sport.

Surveys and questionnaires: Conducting surveys and questionnaires within the local community can directly gauge the interest in a new driving range. It can also help in understanding what features or services potential customers might value in a new facility.

Local golf associations and clubs: Local golf associations, clubs, and sporting goods stores often have an excellent understanding of the golf scene in the area. Engaging with them can provide useful insights into the golfing population and their needs.

Sporting events and tournaments: Attendance at local golf events, tournaments, and golf trade shows can provide an understanding of the community’s interest in golf.

Online analytics: Use online tools like Google Trends or social media analytics to understand the popularity of golf and related terms in your area.

Conducting comprehensive market research will not only give you a clearer picture of whether there is a demand for a driving range but also inform you about the market’s specific needs. It’s an essential step towards building a successful driving range business.

Step 2: Write a Business Plan

Once there is data backing up the need for a driving range in your community, the next step is to start on the business plan. A business plan is a crucial tool in the process of setting up any business, including a driving range. It not only serves as a roadmap to guide your operations but is also an essential document to attract investors and secure loans.

While all sections of a business plan are important, there are some sections that I would recommend focusing on before approaching potential investors or lenders:

Market analysis: This section, which showcases your understanding of your target customers, competition, and market demand, is particularly crucial. It demonstrates that you understand the environment in which your driving range will operate and that there is a demand for your range.

Marketing and sales strategy: This section outlines how you plan to attract and retain customers. It should detail your branding, pricing, advertising, and customer engagement strategies. A well-planned strategy indicates that you have a clear idea of how to reach your potential customers and turn them into regular patrons.

Operations and management plan: This part of your plan outlines how the driving range will operate day-to-day, who will manage it, and what staff will be required. It may also include information about the facilities and technology used, which can be significant for a driving range where technological innovations can be a strong selling point.

Financial projections: For potential investors or lenders, this is one of the most critical sections of your business plan. It should include income statements, balance sheets, and cash flow statements for the first three years. Clear and realistic projections demonstrate the profitability of the business.

Related: How to write a business plan

Step 3: Search for a Location

Selecting the right location for your driving range is an important factor that can influence its success. The process starts by determining the target demographic and understanding where these potential customers live or work. The proximity to residential areas, corporate offices, or even schools and colleges can be beneficial. At the same time, the selected location needs to have enough space to accommodate the range itself and additional facilities like a pro shop, parking lot, and possibly a café or bar. Finding a location that can be located close to other entertainment activities can help bring in walk-in traffic as well.

Additionally, the property must meet specific physical requirements. This includes being large enough to safely contain all driven balls, having good visibility for incoming traffic, and ideally being flat to minimize construction costs. Soil conditions and drainage capabilities also need to be taken into account, as water logging can lead to maintenance issues.

You should also consider the zoning regulations in your selected area. Ensure the land is zoned for commercial use and that a driving range is a permitted activity under local laws. Accessibility is another key factor – it should be easy to reach via major roads and have suitable ingress and egress points.

Before making a final decision, do a thorough analysis of local competition. If there are other driving ranges or golf facilities nearby, it may be harder to attract customers. On the other hand, if golf is popular in the area and the existing facilities are insufficient or too crowded, it could be an excellent opportunity.

Once a potential location has been identified, it’s crucial to refrain from signing any lease or purchase agreements until you secure funding. The last thing you want is to be financially committed to a property and then realize that you do not have the funds to develop it. Having a location selected can be useful when seeking financing, but the final commitment should be made only when you have a secure funding source.

Step 4: Secure Funding

Starting a driving range requires a substantial initial investment and funding options can vary based on the specific financial needs and circumstances of the business. Some of the most common types of funding for a driving range include personal savings, loans, and investor funding.

Personal savings are often the first resource entrepreneurs turn to when funding a new business. Personal savings are often not enough to start a driving range, so other sources of funding are needed.

That brings us to loans, which are another common funding source. They can be obtained from a variety of institutions, including banks and credit unions. In many cases, the bank will require a Small Business Administration (SBA) loan guarantee. The SBA works with lenders and guarantees a portion of the loan, reducing the risk for the lender and making it easier for businesses to get approved. Banks will typically require a personal investment of between 15% and 25% of the total project cost.

Investor funding is another source, where individuals or businesses exchange money for a share of ownership in the driving range. These investors can be friends or family members, or they can be angel investors – affluent individuals who provide capital for a business startup.

Leasing is another option for acquiring some equipment that will help reduce your initial investment. This can be a good option for items that may need frequent upgrades or have a short lifespan. Leasing allows you to spread the cost over a longer period, and you also have the option to upgrade to newer models as they become available.

Remember, each funding source has its own advantages and disadvantages. It’s essential to carefully consider each option and choose the one that best aligns with your business goals, financial situation, and risk tolerance.

Related: Finding the money to start a business

Step 5: Register the Business

To start a driving range, a variety of business licenses and permits will be needed. These permits and licenses can vary based on the state and town where the range is located.

Choosing a business structure: Choosing the right business structure is one of the most important decisions you’ll make when starting a driving range. The structure you choose impacts your legal liability, tax obligations, and operational flexibility. Common structures include Sole Proprietorship, Partnership, Corporation, and Limited Liability Company (LLC). According to a report from the Small Business Administration, LLCs are the most common structure for small businesses, including driving ranges, because they offer the owners limited liability protection, operational flexibility, and favorable tax treatment. This means that the owners are typically not personally responsible for the business debts and liabilities.

Related: Comparison of business structures

Business name registration: After registering the business structure, you may need to register your business name. This process will vary depending on what business structure you pick. Sole proprietors and partnerships will often be required to register a “Doing Business As” (DBA), while corporations and LLCs register with the state during the formation process.

Related: Ideas for naming a driving range

During this time, it’s also a good idea to check if the name you want is available as a web domain, even if you’re not ready to set up a website yet.

Related: Finding a domain name for your business

Obtaining business licenses and permits: Next, you’ll need to acquire the necessary licenses and permits. Since these requirements can vary widely by state, county, and city, it’s crucial to research what’s needed in your specific location.

A driving range may need a general business license, sign permit, seller’s permit, and Employer Identification Number to operate. Depending on the specific services and amenities offered, additional permits might be required, such as a food service license for a café or bar, a retail license for a pro shop, or an alcohol license if you plan to serve alcoholic beverages.

Related: What licenses does a driving range need?

Complying with local zoning regulations
Before you start operations, ensure that your driving range complies with all local zoning regulations. These laws regulate how land in a particular zone can be used. You’ll need to ensure that your driving range is an allowable use in the zone where it’s located.

Step 6: Acquire the Property and Begin Construction

Once you’ve secured funding and acquired a location, the next step is to prepare the land and design your driving range. Here are some tips on how to best tackle this step.

Hire a golf course architect: Golf course architects specialize in the design and creation of golf facilities, including driving ranges. They can ensure that the layout of your range optimally utilizes the available space, adheres to safety regulations, and provides an enjoyable experience for golfers. This will likely include designing different sections of the range to cater to golfers of various skill levels.

Focus on safety: Ensuring the safety of your patrons and the surrounding area is crucial. Install high-quality safety nets around the range to contain golf balls. Also, be sure to create enough distance between each driving spot to prevent accidents.

Create a site plan: Develop a detailed site plan, which will include all the elements of your driving range, such as hitting bays, parking area, pro shop, café or bar if applicable, and restroom facilities. Ensure your layout includes clear signage directing customers around the premises.

Engage a landscape contractor: Once your design is ready, engage a reputable landscape contractor to prepare the land, shape the range, and install the necessary structures and facilities.

Consider modern technologies: Think about integrating modern golf technologies into your range. For instance, automated tee-up systems and ball tracking technologies can significantly enhance the golfing experience and make your range more appealing to tech-savvy customers.

Remember, your driving range’s design and layout can greatly affect the golfer’s experience. Ensuring that your driving range is thoughtfully designed and professionally executed will set you on a path to success.

Step 7: Purchase Equipment

When setting up your driving range, careful consideration should be given to the type and quality of the equipment you purchase. Equipment for a driving range typically includes golf balls, ball dispensing machines, golf clubs for rent, tee-up machines, lighting, safety nets, and maintenance equipment like ball pickers and mowers.

When it comes to purchasing equipment, prioritize quality over quantity. High-quality equipment not only lasts longer but also enhances your customer’s experience. For instance, choose golf balls that are durable and provide consistent performance. Similarly, opt for reliable ball dispensing machines to minimize downtime and ensure smooth operations.

When evaluating vendors, look to reputable vendors who provide good after-sales service and warranties. Good service is especially important for mechanical equipment like ball dispensers and tee-up machines, which may require regular servicing and occasional repairs.

Remember, the equipment you choose will play a big part in the overall experience you offer your customers. So, take your time, do your research, and make informed decisions that will help you create a successful driving range business.

Step 8: Get a Marketing Plan in Place

Marketing a driving range effectively requires creative strategies that not only draw in new customers but also retain existing ones. One of the most effective ways is through partnerships and collaborations. These could be with local businesses, schools, or golf clubs, allowing you to tap into their networks and increase your visibility. Offering group discounts or corporate packages can incentivize such partnerships.

Digital marketing should be a significant part of your strategy. Having a professional and easy-to-navigate website is crucial, and it should highlight the unique selling points of your driving range. Regularly updating your website with engaging content such as golfing tips and tricks, news about events, or highlights of features at your range can keep visitors engaged and encourage repeat visits.
Social media platforms are another useful tool for marketing. Regularly posting engaging content, behind-the-scenes videos, customer testimonials, and promotional offers can help you build an online community and engage with your audience directly.

You can also consider hosting events at your driving range, such as golf tournaments, lessons, or themed nights. Events can attract a wide range of customers, from seasoned golfers to families looking for a fun activity. Promote these events on your website, social media, and through local media to reach a larger audience. Remember, marketing your driving range is about showcasing what makes your range unique and creating a community around your business.

Related: Low-cost ideas to market a new business

Step 9: Hire Employees

Driving ranges require at least a few employees to operate and tend to be the biggest operational cost. Having a good hiring process and getting the right people in place is crucial for the smooth operation of a driving range. Your business’s success will depend not only on the location and equipment but also on the staff who interact with your customers and maintain your facility. In a typical driving range, common positions include range attendants, golf instructors, maintenance crew, and administrative staff.

Range attendants are responsible for ensuring golf balls are picked, cleaned, and stocked for customers. They also supervise the driving range and help customers as needed. Zippia reports that range attendants typically earn a median wage of around $13.51 per hour in 2023, but this (and all wages here) can vary depending on the location and job responsibilities.

Golf instructors are another important part of the team. They provide lessons to customers, helping them improve their golfing skills. The median annual wage for coaches and scouts, which includes golf instructors, was $48,714.

Maintenance crews take care of the upkeep of the facility, including cleaning, mowing the grass, and ensuring all equipment is in good working order. According to the Bureau of Labor Statistics (BLS), grounds maintenance workers make $17.05 per hour, on average.

Administrative staff handle tasks such as scheduling, customer service, and financial tracking. The median hourly wage for administrative assistants is $19.09 according to BLS.

Before you start hiring, there are several responsibilities to consider. You’ll need to get an Employer Identification Number (EIN) from the IRS, which is used for tax purposes. You’ll also need to set up payroll, withhold the correct amount from employees’ pay for taxes, and comply with labor laws, which can include everything from minimum wage requirements to workplace safety regulations.

Ensure you have workers’ compensation insurance to protect you and your employees in case of workplace accidents. It’s also a good idea to create an employee handbook, outlining expectations, procedures, and policies.

Starting a driving range involves many steps, but building a strong, dedicated team can help ensure your business’s success. It’s important to know that each state has different employer regulations, but you can check our guide to hiring in each state to help ensure you comply with all requirements.

Step 10: Prepare to Open!

We have touched on the most common steps to starting a driving range, but there are going to be some additional tasks to finish before opening your doors. Every business will have different needs, but here are some of the most common.

Securing business insurance: Business insurance is essential for protecting your driving range against potential risks. You’ll need general liability insurance to cover bodily injuries or property damage, workers’ compensation insurance for employee injuries, and property insurance to protect your facility and equipment. You may also want to consider business interruption insurance to protect against income loss due to unforeseen closures.

We recommend getting three quotes, including local insurance agents and online providers like Coverwallet or Hiscox, to get the best coverage and price.

Related: Common types of insurance a business may need.

Setting up bookkeeping: Good bookkeeping is crucial to managing your business finances. This includes tracking income, expenses, payroll, and taxes. Many driving ranges use accounting software, such as Wave Accounting (FREE) or Quickbooks, which automates much of the bookkeeping process and provides useful financial reports.

Managing contracts: Contracts are part of running any business, including a driving range. You might have contracts with golf pros who provide lessons at your range, facility rental, and liability waivers.

RocketLawyer and Law Depot have free and inexpensive templates that may be helpful, but ensure all contracts are thoroughly reviewed by a legal professional to protect your business interests.

Opening a business bank account: Separating your personal and business finances is crucial. Open a business bank account where all your driving range’s income will be deposited, and from which expenses will be paid. This not only simplifies bookkeeping but is also a requirement for maintaining your liability protection if your business is an LLC or corporation.

Accepting credit cards: There are many payment processing services available that allow businesses to accept card payments both in person and online. Choose a service that offers competitive rates and good customer service. Popular services include Square or Stripe.

Preparing for the grand opening: The grand opening of your driving range is a great opportunity to attract customers and generate buzz. Plan for it well in advance, organizing special promotions, events, or competitions to draw in the crowd. Be sure to promote the opening heavily on your website, social media, and local press.

Starting a driving range can be a rewarding venture. As with any business, it’s important to consult with industry professionals, legal advisors, and other business owners to ensure you’re covering all bases and setting your driving range up for success.

This material is property of StartingYourBusiness.com

Greg’s Tip: An important consideration for a driving range seasonality. A driving range operating in a cold climate will only be open for business for part of the year, limiting its income potential. Adding heated tees can expand the number of days the range is open, but not usually through the entire winter. A range in a climate that stays warm year-round, like California, can operate year-round and bring in higher profits.

Greg's Business Tip

Common Questions When Starting A Driving Range

How much does it cost to start a driving range?

The total cost to start a driving range can vary significantly based on several factors, including the size of the range, location, and the type of amenities offered. However, you can generally expect the startup costs to range from $50,000 to upwards of $1 million.

Some of the most common costs include:

Land acquisition or lease: Securing a location for your driving range is one of the most significant costs. The cost of land varies greatly depending on the location. For instance, land in or near urban areas tends to be more expensive than in rural areas. If you’re leasing, you’ll need to consider the ongoing monthly lease payments.

Construction or renovation costs: If you’re building a new driving range or renovating an existing one, the construction costs can be substantial. This includes the cost of leveling the land, building the range, hitting bays, and any additional facilities like a pro shop or cafe, installing safety nets, lighting, and landscaping.

Equipment purchase: The equipment needed for a driving range includes range balls, ball dispensers, mats, and ball pickers. You’ll also need maintenance equipment, such as mowers for the range.

Marketing and advertising: Marketing your new driving range to attract customers will require an initial budget to get the word out. This could include the cost of designing and hosting a website, social media advertising, print advertising, signage, and promotional events.

Operating expenses: It’s also recommended to have three to six months of operating expenses on hand as a buffer when you start. These costs include employee wages, utilities, lease or mortgage payments, insurance, and ongoing marketing costs.

The costs of starting a driving range can be quite high, but it’s a unique business that can offer a good return on investment if planned and managed well. Always create a detailed business plan and financial projection to understand the potential costs and returns before diving in.

Is a driving range profitable?

The profit potential for a driving range can be substantial, depending on several factors, such as the size and location of the range, the pricing structure, the cost of operation, and the range of services provided.

For instance, let’s take a moderately sized driving range that has 30 bays. If it operates 12 hours a day and the average occupancy rate is 50%, that means that 15 bays are occupied every hour. If the range charges $10 for an hour’s use, that’s $150 of revenue per hour. Over a 12-hour day, this amounts to $1,800 in daily revenue.

This revenue can be further supplemented by offering additional services such as golf lessons, selling golf equipment, or running a café or snack bar. For example, if a golf instructor charges $50 per lesson and gives five lessons a day, that adds an additional $250 per day. A small café could add another $200 per day in revenue.

So, the total daily revenue could be approximately $2,250 ($1,800 from the range + $250 from lessons + $200 from café sales). Over a 30-day month, the total monthly revenue could reach around $67,500.

On the expense side, the biggest costs are likely to be the lease or mortgage payments, staff wages, utilities, and maintenance. Let’s say these costs add up to $20,000 per month. In addition, there will be costs for golf balls, equipment, insurance, and marketing, which might total another $5,000.

So, the total monthly operating costs might be around $25,000. Subtracting this from the monthly revenue of $67,500 gives a monthly profit of $42,500. Annually, this would result in a profit of $510,000.

However, this is a simplified example, and actual profits can vary widely. It’s crucial to do detailed financial planning, taking into account all potential revenue sources and costs, to get an accurate picture of potential profitability. Factors such as weather, seasonality, and local competition will all have a significant impact on both revenue and costs.

What skills are needed to run a driving range?

You won’t need a business degree to start a driving range, but certain skills and experiences can be particularly beneficial in this industry.

Golf experience: Experience as a golfer can help a business owner to identify what’s most important to their customers and develop their business to fill an unmet need in the golfing community.

Knowledge of golfing trends: Awareness of both current and possible future golfing trends will help a business evolve and adapt to the changing priorities of its customers.

Mechanical and technical skills: Driving ranges rely on lots of equipment, including mowers and computers, to operate on a daily basis. A business owner who can perform some troubleshooting and maintenance on this equipment can save money over hiring professional technicians.

Management experience: Experience hiring, training, and managing staff are valuable for any golfing range owner who needs to employ help.

Customer service experience: Interacting with customers is a large portion of running a driving range. Great customer service skills can help a range owner build meaningful connections with customers, encouraging them to return.

What is the NAICS code for a driving range?

The NAICS code for a driving range is 311811.

The NAICS code (North American Industry Classification System) is a federal system to classify different types of businesses for the collection and reporting of statistical data.

Related: What is a NAICS code?

American Junior Golf Association
Ladies Professional Golf Association
United States Golf Association

How To Start A Driving Range

How To Start A Driving Range

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