Golf Course Startup

Topics: Golf, Golf course, Revenue bond Pages: 5 (1733 words) Published: July 20, 2012
Company and Business Overview
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 courses fail, high turnover or low retention rates. The average membership for most courses each year is 1.5 – 3 million new players. Unfortunately the average membership also decreases by the same amount. According to the National Golf Foundation, 2012 started with 15,753 courses in the U.S, this is a decrease of 299 from 2005. NGF estimates that 25.7 million Americans were considered golfers last year; a decrease of 4.3 million from 2005. NGF says 463 million rounds were played last year and that is a decrease from 500 million in 2005 and 518 million in 2000. Even with those statistics the possibilities of the golf business are high based on the overall popularity and expected trends. Total golf course revenues were up 0.86% in 2010 and 1.10% in 2011 reaching to value of USD. The figures suggest a positive growth in golf demand. By 2016, the US golf course revenues are expected to grow at 3.75% led by positive growth in golf facilities and operations. We plan to take advantage of the expected trends, address the issues existing golf courses face, and differentiate our course and future courses as a brand to seek for the sport of golf. We will begin with one golf course proof of concept of a slightly different type of course. Depending on the success of the proof of concept we will venture to more course(s) of this type or more traditional courses. We will select areas that are not overbuilt and has the most playable months. Our main differentiating factor will be the size of the course. We plan to reduce operational cost by reducing the size of the course. Golf can still be entertaining and challenging for everyday players on smaller, shorter courses. Shaving, 1,000 yards in length of a course should suffice for most amateur golfers. It would also save a course builder acres in land needed to build resulting in a savings of both initial expenses of construction for new courses or long-term maintenance for new courses or purchased courses. A shorter course would also keep players interest and desire to develop their skills and reduces the intimidation factors which contribute to high turnover rates. It also will afford players time to play as most find it a major challenge to dedicate the 4.5 hours minimal to playing a round of golf. All of those issues are at the heart of why existing courses struggle. Reducing the size of the course will also reduce our fixed cost. Those savings can be reinvested into developing the golfers by offering clinics and other developmental programs to keep them vested in increasing their skill but most importantly maintaining the base of players while going after new ones. Cost to build and Revenues

Depending on the site, the permitting and regulatory environment, water availability and the owner’s objectives, a complete project can cost as little as $2-$3 million. A more practical budget, however, should be between $6 and $8 million (exclusive of land), as outlined below. Pre-Construction and Design $ 500,000

Construction Soft Costs $ 500,000
Golf Course Construction $3,500,000
Clubhouse/Maintenance Building/Infrastructure $1,500,000
Furniture, Fixtures and Equipment $ 500,000
Pre-Opening and Grow-in Costs $ 500,000...
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