So, You Want To Own A Golf Course?
The American Dream of working for yourself is still alive and well. And I respect that dream. But, sometimes
dreams turn into nightmares. For many people owning a golf course is a nightmare.
How could it be a nightmare? Well, you’d own a golf shop, and a bar/restaurant, and a driving range, AND a golf
course! Then add carts and a cart barn, and a maintenance facility. How about staff? A course superintendent and his
staff, and F&B manager and her staff, and PGA golf pros, and rangers and starters. What about customers? And
leagues? And golf events? And the joys of banking, and accounting, and legal issues? The fun never stops.
Does that sound like a recipe for playing a lot of golf and just hanging out at the golf course? Not so much. And, is it
like Field of Dreams, “Build it and they will come?” Not so much again. So that means you have to zero-in on a
market, build a brand, and start advertising and promoting – in your spare time!
Hopefully you can see that running a golf course is not a walk in the park. But many people think it has to be easy
and must be fun… that it’s not really “Work.” Sadly, many people put their home and/or life savings on the line to
buy a golf course. Too often they think the secret is “in the buy.” That if they buy it right, they won’t have any
problems. The reality is that most golf courses wouldn’t cash flow even if they were debt free. Think about that.
When I go down South in the winter, I play a few courses that keep changing ownership. No one ever makes them
operate successfully, so they wind up with a new owner who always thinks he “stole it.” Wrong. These courses have
usually been rundown and have needs – expensive needs, and not enough customers, or at least customers willing to
pay the necessary green fees. Everybody talks about rounds – rounds are nice, but revenue is vital. Aren’t they the
same thing? Hardly. Too many courses sell their rounds too cheaply. These owners don’t realize that rounds are
their inventory – a successful business cannot continue to sell its inventory at a loss.
Obviously the day-to-day running of the golf course is difficult and time consuming. But the really difficult part is
the branding and development of a culture for a target market. Most golf courses don’t get to that stage – they’re too
busy just trying to keep up with the daily dealings of running a golf operation.
Why would I write such a column? To squash people’s dreams? Not at all. I want to alert them to the reality of
owning a golf course. I’m doing this out of kindness.
The first thing to consider when buying a golf course is the local market for golf. Are there enough people in the
area to play enough golf on your course so that you can pay the bills? You can buy some cool courses for a nice
price out in the sticks. But, what do you have? Is it good enough that a lot of people will continually travel to play
your course – even during iffy weather, weekdays, and the spring and fall season?
No matter how well you can operate the golf course – if you don’t enough full paying customers, it doesn’t matter.
That’s what catches most people. They don’t know how to increase revenue – they only know how to cut expenses.
This happens to restaurants all the time. A chef will open a restaurant. He loves food and knows how to make it. He
might even be skilled at running the operation. But, he probably isn’t skilled at marketing and won’t have enough
customers. Now he’s left to discounting – the worst of all worlds – more work and less revenue, and now he’s
devalued his restaurant. Next, he starts buying lower quality food hoping that people won’t notice. They’ll notice.
Now the downward spiral begins – less customers, lower prices, less revenue, more cost-cutting, less service, worn
out restaurant, more discounting, etc. The same scenario happens to golf courses – all the time.
Do you love golf? Be smart and enjoy the game. Let someone else worry about providing the experience you love.
Just remember how lucky you are and thank them – they will really appreciate it.