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According to Golf Digest, more than 20 million people in the United States golf. Golf courses provide these people with a place to play the sport. Most courses are 9 or 18 holes, and they may have other amenities, such as clubhouses and pro shops.
Who is this business right for?
Anyone who is well-versed in a variety of aspects of business and enjoys golfing themselves may be qualified to run a golf course.
It’s important to have a broad business background, because golf courses are multi-faceted businesses. Running one might encompass:
- maintaining holes, including making decisions about irrigation and mowing
- hiring and managing employees
- running a clubhouse, which may have a restaurant
- creating programs for golfers and running tournaments
- deciding what capital improvements to invest in
Having previous golf experience helps owners make decisions that will most improve the experiences of their course’s customers.
What happens during a typical day at a golf course?
During the golf season, there are lots of day-to-day activities that must be done. A few include:
- watering and mowing fairways, roughs and greens
- collecting course fees from golfers
- repairing broken-down equipment
- attending to any golfers who need assistance
Capital improvements, non-emergency repairs and routine maintenance are usually made during the offseason.
What is the target market?
A golf course’s ideal customer is an affluent golfer. Such a person enjoys the sport, and they have the money necessary to go golfing regularly.
How does a golf course make money?
A golf course business’ primary product or service is course fees, which golfers pay to play the course. These fees account for a significant portion of a business’ revenue, but they are far from the only source of revenue. Some other things golf courses sell are:
- golf clubs and other equipment
- food and beverages
- club and golf cart rentals
What is the growth potential for a golf course?
Most golf course businesses have just one location, but a single location might contain several 9- or 18-hole courses. For instance, Pine View Golf Course has two courses, the Championship Course and the Executive Course. The Golf Club of California is an example of a business that has just one course.
What are some skills and experiences that will help you build a successful golf course?
Business owners that build a golf course from scratch should be familiar with golf course design. Even if they hire a golf course architect to actually design their course, it’s still helpful to know a little about the subject. Having this basic knowledge will help a business owner know what questions to ask and what advice to take from an architect. There are many books on this subject, such as The Golf Course and Golf Course Architecture.
All business owners, regardless of whether they’re building a golf course or purchasing one, should be familiar with how courses operate. There are several resources that business owners can learn from:
- The National Golf Course Owners Association hosts the Golf Business Conference and has an informative forum for golf course owners.
- The Golf Course Superintendents Association of America has educational resources on environmental issues and maintaining courses.
- There are also many books on owning and running golf courses, like The Complete Guide to Course Management and The Business of Golf.
What are the costs involved in opening a golf course?
The costs associated with opening a golf course are significant. The largest upfront expense is usually land, as courses can require 200 acres of land or more. Other major expenses include:
- designing the course itself
- preparing the land and building the course
- installing an irrigation system
- acquiring or constructing a building for a clubhouse
One couple in New York built their own course, which they expect to cost $1.5 million by the time all 18 holes are installed. A third of their budget ($500,000) went towards land and a building. Additionally, this couple cleared the land, designed the course and built the holes themselves, which kept costs down.
Business owners who don’t have the skills or time required to do all of this work should be prepared to spend significantly more.
Because building a golf course is so expensive, many business owners opt to purchase one instead. Purchasing an existing business is sometimes cheaper, and it’s often perceived as less risky because the business already has a history. The Golf Course Market maintains lists of courses that are currently for sale and ones that will soon go to auction.
What are the steps to start a golf course?
Once you're ready to start your golf course, follow these steps to ensure that your business is legally compliant and avoid wasting time and money as your business grows:
- Plan your business. A clear plan is essential for success as an entrepreneur. A few important topics to consider are your initial costs, your target market, and how long it will take you to break even.
- Form a legal entity. Establishing a legal business entity prevents you from being personally liable if your golf course is sued.
- Register for taxes. You will need to register for a variety of state and federal taxes before you can open for business.
- Open a business bank account. A dedicated checking account for your golf course keeps your finances organized and makes your business appear more professional to your customers.
- 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.
- 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.
- 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.
- 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.
- Establish a 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. Save 15% when you create a business website with Weebly.
Select your state below for an in-depth guide on completing each of these steps in your home state.
Where can I find a business mentor?
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.
What are some insider tips for jump starting a golf course?
While it may be tempting to try and reduce design, construction or irrigation fees, business owners should resist cutting back in these areas. Golfers often seek out the most challenging courses, and skimping on a course’s design or construction could hurt its long-term success. Not having a robust irrigation system can also prove detrimental, as it can leave fairways and greens dry and brown during times of drought.
How to promote & market a golf course
Golf course businesses can be effectively marketed through social media and online advertisements directed at area residents. Purchasing advertisements on local sports radio stations is another effective way to raise awareness of a course.
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How to keep customers coming back
Golf courses can set themselves apart from other courses in their area by having more challenging holes. Because existing courses usually aren’t able to change their course layouts, this is an opportunity that business owners who do open new courses -- and, therefore, get to design their courses’ holes -- can take advantage of.
How and when to build a team
Running a golf course requires a sizable team of employees. Golf Course Industry reports that the average course’s maintenance staff consists of 17 employees, which includes six year-round employees, ten seasonal employees, and one part-time employee and / or independent contractor for odd jobs. This doesn’t take into account additional employees that are needed to collect course fees, operate restaurants or provide lessons.
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.
Certain state permits and licenses may be needed to operate a golf course. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
In addition, certain local licensing or regulatory requirements may apply. For more 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.
Maintain Personal Asset Protection
Don’t think that just forming an LLC, or any other type of business, will save your personal assets in case of a lawsuit or other matter by itself.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your LLC is sued. In business law, this is referred to as piercing your corporate veil.
Two of the simplest steps that will protect your business, and yourself, are to:
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.
Release of Liability
To avoid liability and potential lawsuits, golf courses should have their clients sign a release of liability. Here is an example of one such form.
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Certificate of Occupancy
A golf course is generally operated on a large acreage of land, with a clubhouse run out of a small shop. 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 location:
- 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 golf course.
- 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 construct a golf course and clubhouse:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for your business’ location to ensure your golf course will be in compliance and able to obtain a CO.
How much can you charge customers?
According to Golfweek, most privately owned golf courses charge an average of $40 per round with a cart on the weekend. Weekday prices tend to be slightly lower.
Some courses, however, charge significantly more. For instance, courses built since 1990 charge $60.55 per weekend round on average. Furthermore, some well-known courses, such as ones where PGA championships have been played, charge hundreds of dollars per round -- up to $495.
What are the ongoing expenses for a golf course?
The ongoing expenses for a golf course business largely consist of maintenance fees for the course and any buildings on the property. In 2016, the average course budgeted $750,000 for these expenses. This figure doesn’t include employees’ salaries, which could be an additional several hundred thousand.
How much profit can a golf course make?
In 2015, 69 percent of golf courses broke even (24 percent) or earned a profit (45 percent). The profitability of these courses varies greatly, depending on their location, prestige, fees and amenities. Some just barely broke even on the year, while others brought in sizable profits.
How can you make your business more profitable?
Golf course businesses can add additional revenue streams and increase profits by hiring golf pros who offer lessons, putting in a pro shop that sells equipment, installing a driving range adjacent to the course, or having a restaurant on site.