The new business venture we selected is a golf course. In recent years traditional golf courses has been known to have difficulty. The main issues contributing to these difficulties based on studies of the business is that most golf courses do not actively invest in developing casual players into avid players, they do not invest in the service needed to make the experience less intimidating, most courses exist in "overbuilt" areas where the golf hole to population ration is undesirable or the course was simply built to increase home selling cost, and finally most courses follow a simple plan of limiting services or cost to reduce overall operational cost. All of these issues contribute to the main reasons golf …show more content…
In areas which enjoy a 12 month season and support high fees, some facilities can generate $2 million or more in net cash flow.
Funding/Financing for Golf Courses Without necessary funding and the proper investment, there are likely to be significant challenges to completing a new golf course development. Financing is needed for three core components: land acquisition, consultant and permitting work, and construction. Some of the most popular methods follow. Merchant banks or financial institutions that provide capital to companies in the form of share ownership instead of loans are one source of funding. The types of instruments offered to fund golf course projects by merchant bankers are debt-equity, debenture and common stock. Loans, equity loans, locally or nationally obtained mortgages, mortgages through insurance companies, bond sales, offer memorandums, offer institutions are …show more content…
Financing a municipal golf course is generally done through a combination of recreational revenue bonds and general obligation bonds. In many states, the financing of municipal or government facilities is done through revenue bonds, whereas the debt service and operating overhead is covered directly by the fees generated by golfers. Under this type of financing, interest on the bonds is tax free and the taxpayer doesn't have to pay for the construction. General obligation type bonds may or may not require a public referendum. For these types of municipal bonds, a Market and Financial Feasibility study is performed to determine the financial success of the proposed