Running an indoor golf business involves creating a facility where golfers play rounds on a golf simulator that projects an image of a course and uses sophisticated sensors to depict the real shot in a virtual environment. There are many of these businesses existence, and success turns on 4 basic items:
● Managing start up costs
● Keeping simulators fully rented
● Add on revenues from food and beverage, merchandise or lessons
● Controlling operational costs
This business plan will address each of these four items and a bit more.
NB Par-Tee Haus is a high end facility incorporated in New Braunfels, Tx designed to provide entertainment via high definition full swing simulation golf. The golfing entertainment will be complimented with cold beverages, golf merchandise and attractive surroundings.
Our goal is to provide the New Braunfels golfer, and eventually golfers across the US, with an enticing alternative to outdoor golf when time, weather or proximity prohibit traditional play. We provide a realistic golf experience in a comfortable environment, turning the local golf season from 180(?) days to 365 days per year.
Each of our (4) state-of-the-art golf simulator units will be linked to allow competition and record keeping. Customers will be given the option to register a user name with the center and keep track of their scores, see how they stack up with other users of the system, and track their performance throughout the year. Game software will also allow for tournaments to be played with real time scoring and statistical breakdowns of the entire field. It will give customers a quantifiable depiction of their golf game and will allow them to improve their skills.
A group of four can play 18 holes in about 2 hours on a wide variety of courses for only about $25 per player. Compare this to a 4-5 hour round on a local golf course that can cost anywhere from $45-$90 per player depending on where you play.
Managing Start Up Costs
One of the major expenses will include the cost of the golf simulators. For a commercial operation, this will run $150,000. Price will include a host of factors, software, Hardware build out of each bay in total 4 bays.
Keeping Simulators Fully Rented
Our primary target market includes: Golf Enthusiasts: Individuals of all skill levels who are passionate about golf and seek a convenient and weather-independent practice and play environment. Beginners: Individuals interested in learning golf in a controlled and comfortable setting with access to professional instruction. Corporate Clients: Companies and organizations seeking unique team-building activities, client entertainment, and corporate events. Social Groups: Friends, families, and social clubs looking for an enjoyable and engaging activity in a relaxed environment..
Marketing Strategies: Digital Presence: Develop a professional website, engage in search engine optimization, and utilize social media platforms to promote our services and attract customers. Local Partnerships: Collaborate with golf instructors, local businesses, and golf courses to establish referral programs and cross-promotion opportunities. Events and Promotions: Host golf tournaments, offer special discounts during off-peak hours, and partner with local charities to attract new customers. Customer Reviews and Testimonials: Encourage satisfied customers to leave reviews on platforms like Google, Yelp, and social media to enhance our online reputation.
SWOT Analysis
Strengths – A key strength is in the product delivered by NB Par-Tee Haus. Our simulators are top of the line and provide a realistic golfing experience with very accurate shot simulation. Our facility is also a key strength in that it is high end and provides key amenities local patrons seek in both golf and entertainment. Our staff will be friendly and helpful. A final strength is we have a well establish and strong presence in the New Braunfels community.
Weaknesses - A main challenge will be scheduling to keep the center full. Weekday business hours and weekend days with great weather are likely to be off-times for the business and show a lower utilization. Leagues, corporate events, and other creative ideas and activities will be critical to keep the place full all day, every day. Our other weakness is the technological of the simulators. We’ll be reliant on the manufacturer for service or will have to develop in house technical talent for maintenance and repair of the simulator units.
Opportunities – One opportunity is to partner with local golf courses and clubs to offer offseason memberships. Merchandise sales and club fitting is another opportunity – we could leverage local distributor reps to do demo days, have demo and fitting sets on site and offer extended fitting and playability sessions. The simulator units also have the capability to display advertising, for seeking ad revenue. A final opportunity would be in the hiring of or partnering with PGA trained teachers to provide lessons and coaching for clients. Research so far indicates that teachers keep lesson fees, so this would just be a strategy to keep the simulators running. One other idea is to focus more on private sporting party clientele in the golf offseason as the projectors can be attached to a receiver to show TV. Could target alumni groups to show / host their football games.
Threats – The main threats are competition or issues with the simulator manufacturers. Competition could be from other similar businesses or Sports Bars as they could add a simulator. There are 4 other Indoor Golf facilities in the area so far. The closest is 32 minutes away. Competition from Sports Bars is a possibility as is competition from golf retailers like Dicks or Golf Galaxy, both of which have a single simulator for club testing.
Revenue Forecast
The revenue forecast is most heavily influenced by the number of rounds played and the rates we charge. Based on the hours we plan to be open and with 4 simulators, NB Par-Tee Haus has a total of 364 simulator hours per week capacity. Peak season will be November – March as they are colder months with shorter daylight hours.
Research indicates two pricing models for simulator use. One is hourly and the other is per round. Charging $30 per player assuming an average of 2.5 players per round at 1.5 hours for 18 holes yields an hourly rate of $50. The typical simulator rate is in the $40-$70 an hour range. This revenue forecast assumes $60 per hour for simulator use.
Conservative Simulator Revenue Forecast
Based on 4 simulators, NB Par-Tee Haus has a total of 364 simulator hours/week capacity. NB Par-Tee Haus is forecast to generate ~$584,000 in simulator revenue in year 1.
Conservative Beverage Revenue Forecast
The food and beverage forecast will be based on an average tab per patron. The simulator revenue forecast equates to 7,245 players annually. Research finds an average sports bar tab between $12 and $20 per person. Assuming $12 per customer, food and beverage revenue is forecast at $89,000.
Other Revenue
There are several other revenue streams: league fees, merchandise sales, advertising, club fitting, tournaments, etc. These will likely be smaller than food and beverage, and without a basis for estimation, this model assumes 15% of simulator revenue, equating to $60,000 per year.
Total annual revenue projection for NB Par-Tee Haus with 4 simulators is $565,000 in year one. A three year revenue forecast assuming a 5% annual growth rate is as follows:
Expense Forecast
Expense evaluation will cover both start up and ongoing operational expenses. The primary start up expenses are for purchase of the simulator equipment, build out of the store location, furniture and kitchen equipment.
NB Par-Tee Haus Store Location
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. Based on our research, some of the keys to site location include the following:
Number of golfers in a 10 mile radius:
Not surprisingly, the number of golfers in a 10 mile radius from an NB Par-Tee Haus were 3,371 reported by infousa.com. When filtered to golfer and credit card user that was even more shocking coming in at 26,488
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.
