You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple step guide to starting your driving range. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your Business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How long it will take you to break even?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a driving range?
This depends wildly on location. Opening an indoor local in a metropolitan area can cost millions on the property alone, while one removed from the city can be a fraction of the cost. Regardless of your geographic location, simple, outdoor ranges will be most cost efficient. High-tech, indoor golf simulators can cost six figures per simulator unit, so these types of ranges are best suited for those who have already made a large amount of money in the business already. Go low-tech with no amenities, and the entire range can be set up for around $100,000.
What are the ongoing expenses for a driving range?
Property maintenance is key for an outdoor facility. Such maintenance includes mowing the range, maintaining grass, and keeping tee areas clean. For an indoor facility there are more daily cleaning, payroll, and simulator repair/replacement issues to take into consideration.
Who is the target market?
Your customers will include golf lovers of all ages and skill-levels. Students and young professionals will use your facility to improve their golfing game, teens will enjoy hitting a few balls with their friends, and dedicated lifelong golfers will enjoy the convenience of a driving range when they don't have time for an entire game. Indoor facilities can target companies and families to sell parties that include a meal and use of the facility for a specific amount of time.
How does a driving range make money?
Driving ranges make money by charging customers for the use of golf balls and a tee area where they can practice their swing. While a bucket of balls can cost you $20 as an initial investment, you'll be re-selling the balls over and over before you'll need to replace them through loss or damage. The trick for finding real profit is generating enough traffic such that you sell a sufficient number of balls over the year to cover payroll, insurance, cost of property and maintenance. The retail sale of golf equipment can generate a substantial portion of your income.
How much can you charge customers?
The more services you offer, the more you can charge for a bucket of balls. Most ranges offer 50-80 balls for $5-$8. Monthly memberships go for $50 to $100 for valued customers.
How much profit can a driving range make?
An indoor facility with full-service restaurant and rental space in a high-traffic urban environment can see a net profit of up to $2.9 million a year. However, if you have a low-tech field in the country, you could see an income as low as $40,000 a year.
How can you make your business more profitable?
Provide more services for each customer, such as snack foods that require minimal preparation and reserved parking for members. Monthly memberships collect money upfront from regulars who may not use the entire value of their membership. Golf lessons require no extra equipment, but you'll need to hire a knowledgeable pro who will build a perception of better value for your clients.
What will you name your business?
Choosing the right name is very important. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your driving range is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
For most small businesses forming an LLC is a great option, but if you still want to weigh all your options check our our article, What Structure Should I Choose for My Business?
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a driving range. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
For information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
Release of Liability
To avoid liability and potential lawsuits, driving range businesses should have their clients sign a release of liability. Here is an example of one such form.
Recommended: Rocket Lawyer makes it easy to create a professional release of liability form for your driving range when you sign up for their premium membership. For $39.95 per month, members receive access to hundreds of legal agreements and on call attorneys to get complimentary legal advice.
Certificate of Occupancy
A driving range is usually run out of a storefront. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
- If you plan to lease a storefront:
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a driving range.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
- If you plan to purchase or build a storefront:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for you business’ location to ensure your driving range will be in compliance and able to obtain a CO.
STEP 7: Get Business Insurance
Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
How to promote & market a driving range
You can partner with local gyms, batting cages, sports bars, and other businesses with to promote the existence of your new driving range. Cross-promotion will get feet in the door, then it is up to you to keep them coming back. Mid-week discounts help to drive sales during off-periods.
Recommended: Get started with local advertising for your business with a $300 credit from Yelp.
How to keep customers coming back
Golfers need to know you exist. Work with sporting goods stores, local sporting events, and wine bars to create cross-promotions to drive new faces to your range. A clean, well-lit range with extended operating hours will keep them coming back. Heated tee areas can increase your business during the colder months.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Start A Driving Range In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Ideal driving range owners are those interested in golf and experienced in customer service. Great customer service is a vital part of your business, as you will be having personal encounters with your customers, and satisfied customers have the potential to become regulars. It is also important for owners to feel comfortable managing property maintenance, maintaining food-service standards, and running basic business operations.
What happens during a typical day at a driving range?
Your own list of daily duties can depend on whether you open an indoor or outdoor facility with or without food services, but the average day of a driving range owner includes:
- Maintaining the driving range which can include collecting balls, removing debris, mowing, and maintaining night lighting
- Checking ball dispensers or golfing simulators for proper operation
- Standard money handling and banking procedures
- Providing assistance for customers who might need help with simulators or ball dispensers
- Maintaining clean golfing stations
- Conducting property surveys of parking area
- Providing clean restrooms for your clients
- Serving food items offered on your menu
What are some skills and experiences that will help you build a successful driving range?
Successful owners will have excellent business skills and they will be able to adjust their marketing plan to meet the needs and demands of their local customers. Creativity in marketing is needed to attract new customers, while attention to detail in maintaining a welcoming environment will bring your old customers back. Knowledge of golfing etiquette and culture will assist the entrepreneur in responding to desires of your target audience.
What is the growth potential for a driving range?
The location of your driving range will determine how much business you can generate. While property values in rural areas lower your initial investment, urban settings bring in more customers. The increased number of customers may open up opportunities to offer golfing lessons, sell more golfing equipment, or expand your snack-shack into a larger restaurant.
TRUiC's YouTube Channel
For fun informative videos about starting a busines visit the TRUiC YouTube Channel or subscribe below to view later.
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a driving range?
Know your area and target popular golf courses as a place to reach out to potential customers. If you are the tenth driving range to open, you're fighting an uphill battle. Look for an area without a driving range in which golf is highly popular.
How and when to build a team
If you're just loading the ball dispenser, emptying change machines, and mowing the lawn yourself, you can operate a driving range on your own. Once you have a retail shop, restaurant, and rental space, you'll need to start building your team as soon as you make your first business proposal. You'll need a property and food service manager, along with crew, chefs and servers.