The purpose of this article is to provide key information to give you the edge in starting your indoor golf business. It is important to make sure that all the bases are covered — even the ones that may seem pretty basic. Ultimately the success of any entrepreneurial venture is in the details! I hope that you find this material informative and helpful as you begin the process of opening your indoor golf facility.
#1 Golf is a game — Don’t forget it!
Golf is a game that is simple and complex; easy to learn and yet impossible to master; and appeals to both young and old. But, when all is said and done, it is still a game.
Golfers enjoy many aspects of golf, but the element that always keeps them coming back is the entertainment value. Fortunately, this aspect can be delivered very effectively with a quality indoor golf center.
Picking the right golf simulators and accessories can greatly impact the customer’s experience. First, you want a system that is easy to use and understand. An intuitive, user friendly interface will cut down on the amount of time you will need to spend teaching people on how to use the simulator.
Secondly, go with a simulator that is entertaining! Many systems fall short as they are really meant for providing raw data, which will lead to bored and unsatisfied customers. Choosing simulators with incredible graphics, different camera angles, variable weather and game modes will keep your patrons coming back for more. Highlight these features in your marketing and make it fun. After all, golf is a game and should be enjoyed.
#2 Know your customer!
Indoor golf centers are typically open to the public. Because of this, you will get golfers of all skill levels in your facility. The way that you present the theme of your golf facility can greatly influence the type of customer you attract. For example, private lessons may not work very well in a sports bar environment with the distractions of multiple TV’s and attractive wait staff.
I deal with customers all the time who want to open a facility that tries to appeal to everyone. This can be hard to accomplish and even harder to maintain. It is imperative to match the theme of your interior with the overall theme of your facility. You might consider hiring an interior design company to help create a complimentary environment for your facility.
If you are opening a high-end facility, catering to the wealthy and they walk in and see a giant dance floor with neon lights, that customer is going to walk out and never come back. But if he walks in and is greeted by a friendly member of your staff and sees nice golf themed pictures on the wall and the interior matches his expectations he is likely to stay and have an enjoyable experience.
Decide what type of facility you are opening and be consistent.
#3 Location, Location, Location
Take the time to find a location that accommodates the theme of your facility. You want to find a location that is easy to access for your primary demographic. If you are setting up a high-end facility, look for a location near an exclusive country club or affluent neighborhood. Conversely, if you are opening a facility targeting college kids, then you need to find an area to that is going to maximize the walk-in traffic.
Golfers on average are willing to drive 20 minutes from their house or work to go golfing. Stay within a 20 minute drive of your potential market. If rent is too expensive in the area you want to setup your business, either pay the high rent (it’s normally high for a good reason) or change the theme of your facility to match the level of rent you are willing to pay. Many indoor golf facilities fail because they do not have their location geographically close enough to their target demographic. Don’t make this mistake! It will cost you.
#4 Don’t give away "the Farm"
The number one question that I get from people looking to open an indoor facility is “What can I charge for a round of golf on a simulator?” There are two ways to charge for play on the simulators.
One way is to charge on an hourly basis and the other way is to charge per hole. Most of the time you will see the hourly method used in facilities similar to a sports bar, where there is more going on than just golf. It is a more casual setting where the patrons can hop on a simulator for a half hour and play as many holes as they want. This model is very similar to a billiard hall; play as much as you can in a set amount of time. The drawback to this method is when you have golfers looking to play 9 or 18 holes, you have to figure out the amount of time (on average) that it takes one, two, three… golfers to play that many holes in a set amount of time.
You will find that the vast majority of players will take longer than you think to play a round on the simulator. This makes it much harder to book tee times and keep a consistent schedule. If you have two players get through just fifteen holes in the hour and a half they paid for, they won’t be happy. If they pay for another half-hour to finish their round, the group behind them is delayed on their start time. If the goal is to leave your customers happy, this model can cause problems. But, if this is your preferred method of charging for simulator time, it is useful to have an extra simulator available to accommodate groups that are delayed by slow play. It is helpful to have a designated member of your staff walk around and just touch base with the customers and offer them more time to finish as well as monitor the pace of play.
The other method follows the model set fourth by golf courses, a set fee for 9 or 18 holes of golf. Most golfers are more accustom to this way of paying for golf which makes it easier for you as well as your customers. This method requires a little more attention from your staff to ensure a good pace of play. (See #9) This payment method is better for golf facilities where the target customers are serious golfers who are interested in getting in a full round of golf.
Now the real question: How much do I charge? This can vary based on where your facility is located and what type of theme your facility is offering. A good formula to follow is: find the closest (nice) municipal golf course, take what they charge for 18 holes (with cart) and, cut it in half and now you have your rate for a round of 18 holes on your simulators. (Municipal course= $58 for 18 holes with cart. $58/2= $29 for 18 holes at your facility). The same formula applies for both methods of charging for simulator time.
The most successful method of charging that I have seen is a hybrid of the two methods. Have a set price for 9 or 18 holes, but also offer the ability for your customers to hop on for a set amount of time. This accommodates those who want to spend time on the practice range or work on their short game. For example if you have four simulators, two are reserved for tee times in 9- or 18-hole increments. The two remaining simulators are open for walk-in business on an hourly basis.
Another popular method, which mirrors outdoor golf courses, is to offer memberships. However, I would avoid offering memberships for at least six months to a year after opening. It is very hard to anticipate the true value of a membership until you have a few months under your belt. The people that I have talked with who have offered memberships from day one, regret it! It is much better to gauge how much people are using your facility before you offer them any type of long-term discounts. Get through a full season of business before offering memberships and you will be able to charge a lot more for them. There is a fair amount of sticker shock when a customer is new to the idea of indoor golf and you are asking them to throw down $1000 for a membership. They really have no idea how much they are going to use your facility, by year two a $1000 or $1500 membership looks like a great value for that customer. Be patient and offer memberships after you have built up a loyal customer base.
#5 Size Matters
Unfortunately, there is no easy formula to apply for the number of simulators your facility should have. The size of your indoor golf facility can, and should be very flexible. There are successful facilities that have only one simulator and there are facilities with more than 20. The size of the facility should have a direct correlation to the number of golfers in your primary demographic, within a 20 minute drive of your location.
Most of the time, in dealing with customers looking to open an indoor facility, I will recommend starting small and growing the number of simulators as the business matures. You want to avoid over crowding your facility with equipment. Having too many simulators creates safety as well as aesthetic issues. Golf is a fairly private game, where players are used to being alone or in small groups. It is best if you can create a separate area for each simulator booth, to allow some perceived privacy for the golfers. It is easier to start small and create a successful business and then duplicate or expand than it is to start larger than what your business can sustain. Open seating areas around the bar are often popular. This gives your customers a nice place to congregate before or after their round of golf, creating a clubhouse atmosphere.
#6 To Pro or Not to Pro?
Adding a golf professional to your facility can be a good idea, but not a must. Golf professionals can add a great deal of attention and value to your facility, but they can also take a lot away from your bottom line. Be careful of how you bring a golf pro into your facility. Golf pros often rely on customers coming to them and not the other way around. Avoid any loose deals where you hope they will bring customers in to your facility. Do not expect much income with this model.
The better way to do it is to hire a pro as employee and setup a system of where they can offer lessons as well as generate new customers for you. People will pay a lot of money for a good golf lesson, there is no reason you can’t capture this same stream of revenue for your business. Be picky…there are a lot of golf pros out there looking for work, so take the time to find one that is motivated.
Make sure the pro(s) you hire fit within your business model. Again, if your target market is college kids, not too many of them are going to drop $100 for a lesson. There are some facilities where it is an absolute must to have a golf professional on staff and many others where it is not. Don’t make this a high priority; you can always add a pro later.
#7 What’s the Weather Like?
Before opening an indoor facility ask yourself (realistically) how many months of the year can you play golf outdoors? If you answer more than 10 months you might want to consider a different location. The months where golfers can’t play outdoors are going to be your busiest season. This applies to both hot and cold environments. Texas in July is not a lot of fun, but a nice air conditioned facility where it is always 68 degrees is a nice option. The nastier it is outside the better it can be for your business. Of course one thing you have to take into account is the number of golfers in your area. Opening a mega (20+ simulators) center in Havre, Montana might not be a great idea. Sure it gets cold, but the population won’t justify a mega center. The weather outside can greatly affect the size of your facility and your bottom line.
#8 What are you Selling?
This may seem like a simple questions but it is not. This is the heart of your business. Take a lot of time to figure out what the answer to this question is; it can mean the difference between a successful business and a failure. Indoor golf facilities typically charge players to play a round of golf on one of their simulators. This is the basic stream of revenue.
What are you offering? Lessons, club fitting, food and beverage, retail, leagues, tournaments… the list goes on and on. Again this speaks to the issue of being everything to everybody. There are facilities that offer many additional amenities and there are others that only offer a few. If you have no idea how club fitting works, it’s probably smart to stay away from it (or hire someone with experience). Stay within your comfort level and don’t over extend yourself.
#9 Time is Money!
With an indoor golf business, the more that your simulators are being used, the more money you can bring in. Clearly your business model will reflect this idea through advertising and promotions.
Two things you must take into consideration to increase your dollar per hour: Pace of play and what are your customers doing while they’re not hitting the ball. It is very important to setup a clear structure of how you want to dictate the pace of play. A good idea is to create a structure on a per player basis. For example: “one golfer is expected to play 9 holes in 30 minutes; two golfers are expected to play 9 holes in under an hour” (and so on). Keep it simple and monitor it. You want to encourage you customers to play comfortably but quickly. One of the advantages of simulated golf is the total amount of time it takes compared to playing outdoors. A single golfer, who is accustomed to playing on a simulator, can play a full round of 18 holes in about 45 minutes; verses playing outdoors which may take as long as two hours or more.
Many people who are setting up indoor golf facilities overlook a very important question: what are people doing while they’re not hitting the ball? Simulators are designed to be used by one golfer at a time. So, if you have a threesome booked, this means one golfer is hitting the ball and two are sitting around watching. The two golfers watching are a huge source of ancillary revenue. This is where your food and beverage sales are essential. Each golfer paid (for example) $20 for a round of golf, but while they’re sitting around you can hit them for another $20-$40 in food and drinks. Offer your customers snacks, appetizers, drinks and entrees which are easy to eat but not messy. It is also a great option to have a server go around to each simulator bay and take orders, just as they would in a bar or restaurant setting. Take advantage of the down time of the other golfers, if it takes a threesome an hour and a half to two hours to play a round of golf, use this time to capture some additional revenue while keeping your customers fulfilled.
#10 Be Creative
With an indoor golf center you have the ability to offer a wide variety of playing options that you can’t offer outdoors. If you are located near a busy business park, offer a 3-hole lunch special. Most golfers have to take time off of work to play a full round outdoors, offer an after work special. Use these opportunities to increase the appeal of your indoor golf business.
For generations, golfers have had to follow the rules and hours of the standard golf course. With your facility you can offer tee times and scenarios no outdoor golf club can. Use this to your advantage! Where can you play 9 holes at Pebble Beach and another 9 holes at St. Andrews, all on your lunch break? The answer: only on a golf simulator. Offer tournaments, leagues, online play and hold competitions all within your facility. Reach out to other business in your area for advertisement revenue on the simulators. An indoor golf facility offers a great deal of advantages traditional golf courses can’t, you are limited only by your creativity.
J. Todd Mallon
President, Sports Entertainment Specialists, Inc.
Please note: This article is written only to help inform potential customers. In no way does Sports Entertainment Specialists, Inc. or its agents, guarantee or warrant any claims in this article. All customers are encouraged to do their own research and create their own business plan.