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How To Start A Golf Course

How To Start A Golf Course

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How To Start A Golf Course

How To Start A Golf Course

So you’re interested in starting your own golf course? That’s a fantastic idea and a dream for many.

Starting a golf course is more than just having a love for the sport or a knack for business. It’s about creating a place where people can escape their daily grind, improve their swing, and maybe even build lifelong connections. You’re essentially crafting a sanctuary that caters to both avid golfers and newcomers alike. It may sound straightforward, but there’s plenty to consider before you hit that first ceremonial tee shot.

Our guide will provide an overview of starting a golf course, including the industry landscape, key steps in the process, and answers to common questions. With the right preparation and knowledge, your dream of owning a golf course can become a reality.

Business Overview

At its core, starting a golf course involves securing an appropriate piece of land, designing the course layout, constructing the greens, fairways, and other features, and establishing clubhouse facilities and operations.

Courses may be public, private, or semi-private. Private clubs require an initiation fee and monthly dues, while public courses collect greens fees directly. Food, beverages, merchandise, and golf lessons are additional revenue sources.

Golf Course Industry Summary

Golf is a sport enjoyed by millions of people around the world, both young and old. In the United States alone, 119 million people in the United States played golf in 2022, and 3.3 million people played golf for the first time, according to the National Golf Foundation.  In addition, the golf course industry generates over $27.2 billion in annual revenue across about 8,776 courses nationwide.

Demand is driven primarily by household income levels and the economy, while revenues over the last five years have contracted slightly. The future looks good for golf, though how people engage with golf is evolving. Here are some trends to consider:

  • Health and safety: Given the outdoor setting, golf courses have seen a surge in popularity in the wake of social distancing measures.
  • Technology: From booking tee times online to virtual reality simulators for practice, tech is becoming a significant part of the golf experience.
  • Sustainability: More courses are moving towards environmentally-friendly practices, like water recycling and using organic fertilizers.

Steps To Start A Golf Course

Whether you’re a seasoned pro or this is your first time starting a business, there are some important things to keep in mind. Use this checklist to help get started, and make sure you have all the bases covered.

Step 1: Research the Market

Investing in a new golf course is a significant financial undertaking, and while you may be pumped about the thought of being a golf course owner, you should first check what the market has to say before breaking ground.

Research isn’t just busy work; it’s your first swing at understanding the game you’re about to play. You want to know how many golfers are out there, what they’re looking for in a course, and if they’re willing to pay for it. Even though research won’t give you a guaranteed yes or no, it does give you a sense of the field. You’ll get a better idea of whether there’s room for another player—your golf course—in the market.

A few things tasks when researching the marketur reader is someone with a high school diploma.Write in plain English with a professional, warm tone of voice. Avoid business jargon. Avoid business cliches and tropes. Avoid adverbs and passive voice.   include:

Conduct a market analysis: The first step to assess demand for a new golf course is to conduct a comprehensive market analysis. A market analysis involves gathering data about the local population, demographics, and income levels. You can also assess the supply and demand for golf courses in the area, their pricing, and their features. You can use this data to determine the target market for your golf course and the price point for the course.

Analyze local competition: In addition to researching the market, it’s essential to conduct a competitive analysis to identify the existing golf courses in the area, their strengths and weaknesses, and the market gaps you can fill. You can visit the facilities, explore their pricing and integration with other amenities, and analyze their customer reviews online. Analyzing local competition will help you identify the unique selling points your golf course can leverage to attract customers.

Conduct a feasibility study: Another step in assessing demand for a new golf course is conducting a feasibility study. A feasibility study involves assessing the market dynamics, expected demand, and the cost involved in building and operating a new golf course. In this study, you can assess the total investment required, your expected revenue, and the time frame required to break even. Conducting a feasibility study will help you identify the financial viability of your investment and the probability of success.

Especially given the high cost of starting a golf course, hiring an expert in the industry (consultants, appraisers, etc.) who can help with the feasibility study and provide recommendations based on their expertise can be very valuable. Plus, some loan programs, such as those from the USDA (United States Department of Agriculture) will usually require one from an independent source.

Survey the local community: While analyzing regional and competitive data is essential, it’s equally crucial to gather direct feedback from potential customers. You can survey the local community to collect insights on their preferences, experience levels, and willingness to pay for a new golf course. Surveying the community will also allow you to identify their expectations, including the features, amenities, and pricing they prefer.

Step 2: Write a Business Plan

After researching the market, the next step is a business plan. It’s worth noting that a business plan isn’t just a document the banks and investors ask for; it’s your game plan for success. It acts as a roadmap guiding you through each stage of your business.

While I know funding is an important reason people will put together a golf course business plan, I do want to point out a few sections that are particularly important to banks and investors.

Market Analysis

In this section, you’ve got to show that there’s room in the market for your golf course and that you know how to draw customers in. Lenders want to see that you understand who your competition is and how you stand out. You should also provide solid reasons why your golf course will succeed, like unique features or a specific market need you’ll fulfill. Lenders and investors will appreciate your ability to present a compelling case for your business’s success based on sound market research.

Management Team

Lenders and banks pay close attention to the team behind the business. The management team includes the owners and key employees. It’s not just about having a background in golf or business; it’s about proving that you and your team have the skills and experience to manage a complex operation. Highlighting the team’s experience, expertise, and commitment is necessary to convince funders that the business is in capable hands.

Location

You can’t have a golf course just anywhere. The location section needs to outline why you’ve chosen a particular site. Discuss its advantages, like accessibility and attractiveness to your target market, and any competitive advantages, like lower land costs or proximity to a busy area. For lenders, the location is another piece that must fit perfectly into the puzzle. They want to see that you’ve thought this through and that the location supports your business plan.

Financial Projections

Numbers talk. In this section, you’ll need to outline your financial projections clearly. Lenders and investors will dig deep into these numbers to see if your business model makes sense. They’ll look for reasonable projections and evidence that you can turn a profit. Importantly, you’ll also need to explain how you arrived at these figures. Knowing your numbers inside and out will make it easier to answer questions and build confidence among lenders.

Before showing your business plan to any lender or investor, it’s a good idea to have someone with business experience, like another business owner or an accountant, review it. They can provide a fresh perspective and may find weak spots you didn’t see.

Related: How to write a business plan

Step 3: Secure Funding

You’ve done your market research and crafted a solid business plan. But unless you’ve found a way to build a golf course out of good intentions, you’re going to need money – a good chunk of it. Securing funding is often one of the most challenging steps in starting a golf course, and having funding in place is crucial before you go any further because nothing stalls a project faster than running out of money.

Golf courses are typically funded from a few sources. These include:

Lenders: Banks are a traditional source for business loans, but they want to see you put up some of your own cash first. Generally, they’ll ask you to cover between 15% and 25% of the project cost with your own funds. You’ll also need a solid credit score and something to put up as collateral. If a bank feels your project is a bit too risky for a standard loan, they might still back you using a loan guarantee from the Small Business Administration (SBA) or the United States Department of Agriculture (USDA), which can make it less risky for them to loan the money.

Friends and family: Your loved ones might want to chip in to help make your dream a reality. That’s great, but don’t rely on a handshake. Put all agreements in writing to prevent misunderstandings down the road. You’re starting a business, after all, not a family feud.

Local investors: While banks and personal savings are common routes, finding investors can also be an effective way to gather the resources you need, as golf tends to attract higher net-worth individuals, several of whom would like to say they own part of a golf course.

Sell sponsorships: You could sell sponsorships to local businesses and individuals. This is a great way to generate revenue for your new golf course and to get exposure for your business.

Offer pre-sale memberships: You could offer pre-sale memberships to your new golf course. This is a great way to generate revenue upfront and gauge interest in your golf course.

Related: Finding the money to start a business

Step 4: Acquire the Site & Begin Course Construction

Once you’ve got your funding in place and your business registered, it’s time to start making those plans a reality. This is the exciting part where you finally get your hands on a piece of land and start turning it into the golf course you’ve been dreaming of.

Picking the right location is key and should match the target market you identified in your business plan. Before you sign any contracts, make sure your funding is secure. Delays in funding can derail your plans in a hurry. It’s also crucial to check that the land is zoned for a golf course. Zoning rules can be a deal-breaker, so make sure to verify this early on.

Once the property has been acquired, purchasing the necessary equipment and setting up the golf course is the next step. This includes everything from landscaping tools for course maintenance golf carts for transportation, to golf clubs and balls for the pro shop.

Constructing the golf course and accompanying facilities, such as the clubhouse and pro shop, is significant. It requires careful planning and coordination with architects, contractors, and landscapers. This is going to be the longest phase of the startup process, as it typically takes 18 to 24 months to construct a new golf course.

Step 5: Register the Business

The next step is to make your golf course legal. Below are the key steps you’ll need to take to properly register your golf course business.

Business structure: The first step is deciding on the legal structure of your business. There are four primary types of business structures: sole proprietorship, general partnership, corporation, and Limited Liability Company (LLC).

  • Sole proprietorship: This is the simplest form of business structure. It’s easy to set up and is the lowest cost to set up. However, it doesn’t provide any liability protection, meaning your personal assets can be at risk if the business incurs debts or runs into legal issues.
  • General partnership: This is similar to a sole proprietorship but involves two or more owners. Each partner shares the profits, losses, and management of the business, and each partner’s personal assets can be at risk.
  • Corporation: A corporation is a separate legal entity from its owners, providing them with liability protection. However, it’s more complex and expensive to set up and has some administrative requirements to be aware of.
  • Limited Liability Company (LLC): An LLC combines the liability protection of a corporation with the simpler administrative requirements of a sole proprietorship or partnership.

Most golf courses will go with an LLC or corporation for the liability protection and potential tax benefits.

Related: Comparison of business structures

Forming an LLC sounds complicated and expensive, but using an entity formation service guides you through the process so you know it was done right.


Some popular LLC formation services include:


IncFile - $0 plus state fees & free registered agent for 1 year!

ZenBusiness - Best for beginners. $0 plus state fees & free registered agent for 1 year!

Northwest - Best privacy protection. $39 plus state fees & free registered agent for 1 year!

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.

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

Obtain business licenses and permits: To start a golf course, there will be several licenses and permits needed. The permits and licenses needed will vary based on the state and town where the golf course is located.

For a golf course specifically, these often include health permits if offering food service, liquor licenses, building permits, and zoning permits.

In addition, some areas heavily regulate certain chemicals that would be used on the greens to reduce their environmental impact. Be sure to check on any restrictions or environmental permits before applying chemicals on the property.

Last, you will want to check with your state for general business licensing requirements. Some common licenses and permits may include a local business license, a sales tax permit, and an Employer Identification Number (EIN).

Related: Common business licenses, permits, and registrations by state

Step 6: Hire Staff

Golf courses are labor-intensive businesses, and several employees will be needed to help run and maintain the golf course.  Make sure that you select people with appropriate experience and training. From groundkeepers to manage the course itself to customer service staff in the clubhouse, hiring the right people is key to your business’s success.

Common Types of Employees

Typically, a golf course will need a variety of staff, including:

  • Groundskeepers for course maintenance
  • Clubhouse staff for member services
  • Pro shop attendants for gear and rentals
  • Golf instructors to offer lessons
  • Food and beverage staff for any on-site dining
Legal Requirements for Hiring

Before you hire anyone, there are legal steps an employer needs to follow:

  • Obtaining an EIN: You’ll need an Employer Identification Number (EIN) from the IRS for tax purposes.
  • Employment eligibility: Make sure your employees are eligible to work in the U.S., commonly verified through forms like the I-9.
  • State reporting: Each state has its own requirements for reporting new hires, so be sure to check the rules for your state.
  • Worker’s compensation: Most states require you to have worker’s compensation insurance to cover any workplace injuries.
  • Labor laws: Familiarize yourself with both federal and state labor laws to ensure you’re in compliance, particularly in areas like minimum wage and overtime.

In addition to salary costs, your budget will also need to include other employee-related expenses. Workman’s comp insurance, unemployment insurance, and paid time off are common expenses that a business will need to cover when hiring staff.

RelatedHiring your first employee

Step 7: Create a Marketing Strategy

The success of your golf course depends on how well you can market it. In today’s ever-changing business landscape, it is essential to have a marketing strategy that sets you apart from the competition and helps you attract customers.

Social media is a powerful marketing tool for any new business, including golf courses. Create profiles on popular social media platforms like Facebook, Twitter, and Instagram. Start by posting interesting updates about your golf course, like upcoming events, new course design features, and behind-the-scenes photos. Make sure to engage with your followers by responding to comments and messages. You can also run targeted ad campaigns to reach potential customers and promote specific events.

Hosting events is also great way to showcase your new golf course and attract new customers. You can organize events like tournaments, charity fundraisers, or beginner clinics. Ensure that the events are well-promoted in advance and offer attractive incentives for people to attend. Consider partnering with local businesses like golf stores or restaurants to provide sponsorships or prizes.

Having a way to promote through public relations is a great way to generate positive media coverage for your golf course. You can work with a public relations firm to develop a media campaign or reach out to local media to generate awareness.

Related: Low-cost ideas to market a new business

Step 8: Prepare to Open!

As the opening day for your golf course nears, there are several key steps to finalize. Every business is going to have different needs, but here are some common ones:

Business insurance: It’s essential to protect your investment with comprehensive business insurance. This can cover property damage, liability, workers’ compensation, and more. We recommend getting at least three insurance quotes, including local insurance agents and online providers like Coverwallet or Hiscox to get the best coverage and price.

Setting up bookkeeping: Implementing a reliable bookkeeping system is crucial for tracking revenue, expenses, and overall financial health. You may consider hiring a professional accountant or using accounting software like Wave Accounting (FREE) or Quickbooks.

Opening a bank account: Opening a separate business bank account helps to keep personal and business finances separate and makes tax preparation easier.

Management software: There are several industry-specific software systems designed to streamline golf course operations. Examples include Lightspeed Golf, which offers tee sheet management and POS features, Club Prophet Systems, known for its robust course management tools, and ForeUP, which provides POS, online booking, and inventory management.

Setting pricing: Carefully determine the pricing for green fees, equipment rentals, lessons, and other services. Consider factors like local market rates, your operating costs, and the value you provide to customers.

Joining industry associations: Associations like the Golf Course Superintendents Association of America (GCSAA), National Golf Course Owners Association (NGCOA), and the Club Managers Association of America (CMAA) offer resources, networking opportunities and industry insights that can be invaluable for a new golf course owner.

Preparing for the Grand Opening: Prepare for your grand opening. Whether it’s a soft launch or a full-blown event, make it memorable. Consider special promotions, activities, or even a small tournament to mark the occasion.

Greg’s Tip: The costs don’t stop once the course is built. Plus revenues for golf courses are at the mercy of the weather. From maintenance to staff salaries, make sure you bedget in a buffer to cover running costs.

Greg's Business Tip

Common Questions When Starting A Golf Course

How much does it cost to start a golf course?

Starting a golf course requires a significant upfront investment of $5 million to $10 million or more. The largest costs are acquiring appropriate land, constructing the course, and developing clubhouse facilities.

To secure land for an 18-hole course, plan anywhere between $500,000 and several million dollars. Design and construction costs typically add another $3 million to $6 million for an 18-hole course. This covers land clearing, course shaping, drainage systems, irrigation, grassing, cart paths, and features like bunkers and water hazards.

The clubhouse is another major cost, with an high-end facility easily exceeding $2 million. This includes the building, furnishings, kitchen equipment, and starters building.

Other start up needs include maintenance equipment ($500,000+), permits/fees ($50,000), insurance ($25,000), marketing ($15,000), and initial inventories for the pro shop and restaurant.

With total costs reaching $8 million or more, extensive financing is crucial.

It’s also a good idea to have 3-6 months of budgeted operating expenses available as a contingency reserve to cover unforeseen costs.

How profitable is a golf course?

The actual profitability of a golf course will vary depending on a number of factors, such as the location of the course, the length of the playing season, and the quality of the course.

To provide a rough estimate of potential profit, let’s look at industry statistics:

Revenue
– Green fees: $500,000 – Assuming an average green fee of $50 and 10,000 rounds of golf played each year.
Cart fees: $250,000 – Assuming an average cart fee of $25 and that 50% of golfers rent a golf cart.
Membership fees: $100,000 – Assuming the golf course has 1,000 members and that each member pays an average annual membership fee of $100.
Food and beverage sales: $200,000 – Assuming $20 annually in food and beverage sales per golfer.
Pro shop sales: $100,000 – Assuming $10 in pro shop sales per golfer.

Total revenue: $1,150,000

Expenses
– Course maintenance: $400,000 – Assuming an average of $40,000 per month on course maintenance.
– Staff salaries: $300,000 – Payroll costs are often the largest operational cost for a golf course and average 25%-30% of total sales.
– Marketing costs: $50,000

Total expenses: $750,000

This would leave an operational profit of $400,000 before taxes and any loan repayments.

Please note, these figures are just rough estimates for illustration purposes. The actual profit you can expect will depend on numerous factors specific to your operation.

What skills are helpful when starting a golf course?

Starting a golf course requires a diverse range of skills to ensure success. A few of these include:

Agronomy skills: Understanding the science behind grass, soil, and environmental factors is crucial for maintaining a high-quality golf course.

Strong leadership abilities: You’ll need to manage teams, make important decisions, and provide direction.

Good writing and communication skills: These are necessary for marketing your business, liaising with stakeholders, and communicating with your team.

Business and finance skills: Running a golf course is running a business. You’ll need to understand finance, budgeting, and business operations.

Customer service skills: Providing excellent service to golfers will help retain customers and attract new ones.

Organizational skills: Managing a golf course involves coordinating many moving parts, from staff schedules to maintenance tasks.

Knowledge of golf: It’s important to understand the game of golf, including the rules and etiquette, to ensure your course meets the needs of players.

Technical skills: This includes understanding how to maintain and operate golf course equipment and tools.

Interpersonal skills: These are crucial for building relationships with staff, customers, and other stakeholders.

Problem-solving skills: You’ll likely face unexpected challenges, and having strong problem-solving abilities will help you navigate these effectively.

What is the NAICS code for a golf course?

The NAICS code for a golf course is 713910, which is categorized as golf courses and country clubs.

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 and how to find yours

Resources:
American Society of Golf Course Architects
Golf Course Industry
National Golf Foundation
U.S. Golf Association

How To Start A Golf Course

How To Start A Golf Course

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