The ongoing expenses of 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. According to reports, this figure doesn’t include employees’ salaries, which could be an additional several hundred thousand.
How much should a golf course spend on capital expenditures?
From a capital expenditure standpoint, public and semi-private golf courses should on average spend between 3% and 5% of total revenue on maintaining existing capital items. Private clubs sell and market more than just golf, they promote a lifestyle and social hub.
What are the most expensive things to maintain on a golf course?
The greens. They are the most essential element of any course, but because of labor and equipment they are also the most expensive things to maintain — even if some of our demands are a costly waste. Firm and fast is the golf standard for greens. That’s achieved by mowing, rolling and hand-watering the greens to prevent them from burning out.
How much does it cost to run a professional golf course?
Alas, this isn’t a column about fantasy but about money and golf. The cost to achieve the condition players expect — or will tolerate — ranges from about $500,000 a year for a daily-fee course to $1,000,000 a year for a private club, estimates Bob Randquist, chief operating officer of the Golf Course Superintendent’s Association of America.
Why are golf facilities so expensive?
Many facilities now are exposed to high costs caused by failure to replace old equipment or upgrade inadequate facilities, including higher equipment repair costs, reduced efficiency, increased labor requirements, playability issues and many others. Failing to invest in improvements and upgrades may also affect how golfers perceive a facility.
What do most golf courses cost?
The median cost to build a golf course is $14 million, not including buying the land. The lowest-priced golf courses cost $7 million. Others cost as much as $25 million. Building greens is one of the most important tasks, and it can cost as much as $60 per square foot.
Where do golf courses make the most money?
The most common income streams are green fees, membership fees, pro shop sales, and food and beverage sales. While increasing membership fees or green fees might seem like a good way to increase revenue, it might put off more golfers than the additional income earned.
Are most golf courses profitable?
Roughly 25% of golf courses don't turn a profit. How can you make sure you're in the 75%? Just like with any other deal, one of the most important parts of a golf course investment comes down to the acquisition.
How does a golf course benefit or hurt the economy?
Golf courses definitely have a positive economic impact on local economies. These impacts are demonstrated in the form of new jobs and payroll impacts. . Golf courses have a significant impact in terms of local expenditures for supplies, repairs, maintenance, etc.
How does golf generate money?
Endorsements play a significant role in how much a golfer can earn. You can earn multiples of the prize money in endorsements. The most marketable golfers earn huge fees in endorsements from golf equipment and apparel brands.
How much do golf courses make per year?
Golf Course Owners make between $30,000 to several hundred thousand dollars per year. However, golf course owners sometimes will lose money if the course has a bad year. Overall, the golf course industry is very volatile, and there is no guarantee that money will be made.
What is the profit margin on golf clubs?
After all expenses, the best golf retailers rarely profit more than 2-3% of the total cost of a club. However, as a whole, we can say that around 33.33% of the cost of a golf club is the markup from the retailer.
Why are golf courses so expensive?
Why is golf so expensive? Golf is costly due to the high cost of quality golf clubs, accessories, course fees, memberships, and the amount of golf that is played. Golf clubs are made from quality materials meant to last a lifetime, and courses often require membership, the cost of which reflects the club's exclusivity.
How many acres do you need for a golf course?
“This means an 18-hole course of all short par 3s could be built on as little as 30 acres, while an intermediate length or executive course of 18 holes of par 3s and 4s would require 75-100 acres, and a full size par 72 course would need 120-200 acres.
How much does a golf course spend on fertilizer?
Fertigation is becoming the way for golf courses to be able to fertilize the grounds in the most efficient and cost-effective way. Did you know that golf courses spend $25,000 to over $100,000 on fertilizer annually?
How much does golf contribute to the economy?
It shows $84.1 billion in activity was directly driven by golf in 2016, a 22% rise from $68.8 billion in the 2011 report. The industry supported $191.9 billion in total annual activity, including 1.89 million jobs and $58.7 billion in wages and benefits.
Are golf courses bad for the environment?
Environmentalists argue that golf course land is not only a waste of space, but also harbors harmful impacts to the earth and environment, such as pesticide use. This negative impact occurs by using large quantities of water and destroying habitats for wildlife species.
What is the most important purchase a golfer will make in his lifetime?
One of the most important purchases a golfer will make in his lifetime is when he/she picks out a new (or first) set of irons. Unfortunately, this will also be one of the more expensive investments you make towards your golf game.
Where to go on a golf vacation?
It's great to experience a different city and the golf courses that they have, while also having time to sit, drink and chat with your golf buddies. Some of the best places to have a golf vacation include Las Vegas, Dallas, Arizona, and just about anywhere in Florida. But even if you're just doing a staycation in your own city, there's just something magical about a golf vacation so please start planning one now.
What are some good accessories for golf?
One of the most underrated accessories for golf is a good pair of sunglasses. Golf is an outdoor sport and the sunshine is one of the most enjoyable parts of the experience. Having a nice pair of sunglasses can make a huge difference during the golf round, especially when you're trying to track your golf ball in the air.
What time of year is golf in twilight?
Twilight hours are generally from about 3:00 p.m. to dark and they provide super cheap options based on the possibility that you may not be able to squeeze a full 18 holes in before it gets too dark outside. Twilight rates are magical though as you can sometimes play courses for 1/3 of the regular price, if not even more. If you want to play that uber nice course in town, see if they have a twilight rate that you can take advantage of.
How much are golf gloves?
Golf gloves are golf gloves no matter what brand they are. Some name brand golf gloves like Titliest or Ping or Puma provide golf glove options that can get over $25 starting price.
Do golf gloves rip open?
Not only is the glove sure to rip open at some part if you play and practice a lot, but you won't notice an actual difference in grip or comfort between most name brand golf gloves and non-name brand gloves. Just stick to the cheap ones as they will all fall apart quickly anyways.
Is golf clothing expensive?
Golf clothing can be very expensive depending on the brands and styles that are you looking for, but you don't have to break the bank for a normal golf outfit that would be acceptable at most courses. It's not a fashion show.
What is the most important thing in a golf course?
The greens. They are the most essential element of any course, but because of labor and equipment they are also the most expensive things to maintain — even if some of our demands are a costly waste. Firm and fast is the golf standard for greens.
Who is the vice president of Billy Casper Golf?
That’s a question owners ask all the time,” says a weary Bryan Bielecki, vice president of agronomy at Billy Casper Golf, which manages nearly 150 golf courses in the U.S. “You can’t spend less and expect the same exact product. You have to sacrifice something.”.
7.1 Break-even Analysis
Using averaged monthly total expenses and an estimated variable cost, the monthly break-even point in sales revenue is calculated and shown below.
7.2 Projected Profit and Loss
The following table and charts show the projected profit and loss for three years. Monthly figures for the first year are shown in the appendix.
7.3 Projected Cash Flow
The following table and chart show the projected cash flow for three years. Monthly figures for the first year are shown in the appendix.
7.4 Projected Balance Sheet
The following table presents the projected balance sheet for three years. Monthly figures for the first year are shown in the appendix.
7.5 Business Ratios
Business ratios for the years of this plan are shown below. Industry profile ratios based on the Standard Industrial Classification (SIC) code 7997, Membership Sports and Recreation, are shown for comparison.
What is the most frequently mowed area of golf courses?
Putting greens are the most frequently mowed area of golf courses and the associated costs are significant. Mower technology has improved to the point where triplex units can produce a quality of cut equivalent to that of walk-behind mowers.
What was the effect of the recession on golf courses?
The good news is that the recession caused golf facilities to re-evaluate maintenance practices, presentation options and course amenities. Many golf courses were forced to differentiate between essential and nonessential maintenance programs so they could focus on what matters most.
Why are golf courses removed from the Southwest?
Out of necessity, many courses in the Southwest removed maintained rough in peripheral areas to cut down on water usage and save money. For years, golf courses have also replaced mown rough with naturalized or unmown rough.
How does failing to invest affect golf?
Failing to invest in improvements and upgrades may also affect how golfers perceive a facility. Golf is a competitive business, and golfers are more likely to play at golf courses that demonstrate a commitment to quality by making improvements.
How did the recession affect golf?
These effects are not surprising given the challenges created by an oversupply of golf courses that is partially the product of the aging golfer demographic and declining participation rates among younger generations. Furthermore, extended periods of severe drought have increased the price of water and limited its availability for golf courses.
Does fertilizer save money?
Fertilizer and Plant Protectants. Carefully analyzing fertilizer costs can reveal some significant opportunities to save money even though fertilizer does not represent a major percentage of a typical golf course maintenance budget.
Is golf course maintenance competitive?
Golf course maintenance work is demanding and the labor market is very competitive. Recruiting and retaining reliable maintenance staff is currently one of the biggest challenges at golf facilities across the country. Additionally, there are many hidden costs associated with hiring and training new maintenance employees.
What are the KPIs for each type of golf course?
The KPIs for each type of course are different . As an owner or operator, this means you need to be recording, tracking and updating KPIs in a manner consistent with the industry (category) standard as a baseline starting point. Therein lies the greatest challenge the golf industry is set to overcome.
What is benchmarking in golf?
Benchmarking standards are commonplace in most industries. These standards are set and updated based on defined and evolving business models and shared information. The core objectives for creating and using benchmark standards are performance measurement and improvement. The golf industry has lagged other industries in ...
Is golf a lagged industry?
The golf industry has lagged other industries in the widespread adoption and use of benchmark standards. The good news is that change has been brewing for years and is picking up speed.
When to have a business discussion on golf course?
Your business discussion can take place directly before or after hitting the golf course, but it must occur reasonably close in time to the business-setting business discussion. This is an ideal time to do your business discussions over breakfast, lunch or dinner.
Can you use non business setting discussion on golf course?
Even if you actually are talking business while playing, you likely cannot use that nonbusiness-setting discussion to qualify your entertainment expenses. But, there is a simple solution.
Can you deduct golf fees?
With regard to golf, you can deduct golf green fees, guest fees, cart fees, caddies, tees, balls & gloves, beverages, snacks, breakfast, lunch or dinner. And, you can deduct your own costs, even if you go Dutch & pay only for yourself.
Breakdown of the expenditure of top players on the PGA Tour
Recently, Golf.com revealed the expenditures and the cost of doing business for a top player. Moreover, the expenses are estimated to be in seven figures, approaching $2 million. So here’s a breakdown of all the estimated expenditures.
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Amey Kulkarni is a Golf writer at EssentiallySports. He is currently pursuing his Bachelor’s degree in mass media. Before joining EssentiallySports he used to write articles on Golf and Cricket on his personal blog cricgolf.
