I had an idea...

[lamebums]

This thought struck me over a few drinks with my father as we were having dinner tonight.

I was thinking, in the next year or two, to begin putting things into motion to opening up a driving range around here. I've already done a decent amount of research on this issue. I'm thinking of the area of Union, Kentucky because it's a lot of urban sprawl with just houses and new subdivisions, broken by the occasional shopping center. The closest golf course is Meadowood, about 12 minutes away, and the closest driving range is a similar distance. (I don't know about Lassing Pointe, or if it has a driving range or not, but I am talking about a dedicated, purpose-built driving range here.) The only driving ranges I know of in all of Northern Kentucky are the Fort Wright Driving Range and the Town and Country center, about 20 and 25 minutes away from my proposed place, respectively.

Land in underdeveloped areas is absurdly cheap - I am talking about $15,000 an acre or less (I have seen $12k). Assuming a 10 acre driving range (300 yards long plus about 150 yards wide - comes to about 8 acres plus space for a parking lot and a shed, totals 10. The entire cost of buying the land, putting down a parking lot (gravel seems to be cheaper, at least temporarily until the operation gets going), building a shed and getting the necessary equipment will run about $220,000, give or take, say, twenty percent. I'd cut corners by having mostly grass tees - having mats plus the accompanying shelters is just more money and it seems a lot of people prefer grass anyway.

Now, figure this: It will be the only driving range within ten minutes, all of the surrounding area will be suburban homes, so there would be a pretty solid market. If a hundred people a day show up (I am being extremely conservative), and buy say, a $10 bucket of balls on average, that would be a thousand dollars a day. More would show up on weekends and during the summer, but less in winter and on rainy days, so it would average out. Assuming it's pretty steady all year, that would be 36,000 customers, or $360,000 roughly.

$360,000 minus the costs - say $30,000 to the bank for paying off a loan, $20,000 a year in maintenance, mostly range balls and mechanical equipment, another $40,000 or so in part time workers to help staff the place, means I'd have about $270,000 in mad money before taxes. Each year. Doesn't seem like a bad idea to me. I'd be prepared to eat a loss the first few months, but the place would pay for itself in 1-3 years, after which I am simply skimming money off the top. Retiring at 22 sounds like a great idea to me...

Even if I'm being overly optimistic and only 50 people show up a day - I would still make $90,000 in profit each year. I am guessing the average of one hundred a day because the ranges I know around here are jammed at peak times, with about 40-50 people on them at any one time (more would come but the parking lot is too small).

Thoughts, comments, kudos, criticisms? Please go ahead. I am seriously considering this, so I'll take any advice I can get.

(Also I might let Sand trappers in for free, eh...)

[Dent]

Nice thinking there lamebums, but explain where your going to get 300,000 thousand dollars? :P. But then again for example what if nobody in the suburban areas arent golfers? what if you only get 10 people a day? Are you actually thinking of doing this? again if so where you get the money?

[lamebums]

Nice thinking there lamebums, but explain where your going to get 300,000 thousand dollars? :P. But then again for example what if nobody in the suburban areas arent golfers? what if you only get 10 people a day? Are you actually thinking of doing this? again if so where you get the money?

My first recourse to securing $300,000 will be my step-grandfather. He's worth about $10 million, retired at 55 by selling his business. If I lay it on the table what I'm going to do and portray it as an investment rather than him handing over a huge wad of cash I may be able to sell him on the idea. If not, I will look into a loan from the bank, which I'd have to pay back over several years.

I doubt the people in these areas aren't golfers. It's mostly upper middle-class whites that are moving into these places. If they cn afford a Ford Excursion that gets 8 mpg's, they can probably afford a bucket of balls - and will probably do so if they don't have to spend $10 in gas going to another place. I would start an ad blitz in the newspapers and local media some time before the place actually opened, and get the area aware of its existence. If it were to all go well, I'd build the place in the fall, run ads in the late winter, and open up in the spring, just when people are starting to play again. Imagine it this way - "Show this advertisement and receive a free bucket of balls" or something like that. Like I said, I'm prepared to eat a loss for the first couple months in order to get the operation started.

[iacas]

The closest golf course is Meadowood, about 12 minutes away, and the closest driving range is a similar distance.

That's not that far. I routinely drive 25 miles to visit a driving range I like when some are much, much closer.

I'd cut corners by having mostly grass tees

And how much are you going to pay your groundskeeper to make sure the grass grows back quickly and is a suitable type? How about installing all the irrigation? Where will you put the short game practice area, bunkers, putting greens, and other things and who will you hire to design those? How much will insurance cost? What types of golf balls are you going to get (cutting corners here too?)? Where will you get the staff? How much will you pay them? Are you going to have concessions? Will teaching pros lease space from you to give lessons?

If a hundred people a day show up (I am being extremely conservative)

We have a golf dome here that, in the dead of winter when there are NO other options, sometimes doesn't see 100 people per day. And it's right next to a full retail golf store and is the only "golf" in town in winter.

People work, particularly the people who can afford to live in nice little suburban mid-upper-class type neighborhoods. Then they come home to their families. On the weekends they have chores. If people get 5 hours/week for golf, they'll spend it playing golf, not visiting the driving range.

$10 bucket of balls on average

I wouldn't pay $10 for a bucket of balls... (more on this later).

Even if I'm being overly optimistic and only 50 people show up a day - I would still make $90,000 in profit each year.

And if the number drops to 40, or you only average $7/visitor... suddenly you're barely breaking even. Your salary comes out of that, too, and you're not factoring in property taxes, income taxes, insurance costs, electricity (you're going to have lights, no?), etc. You're forgetting a LOT of things.

I doubt the people in these areas aren't golfers. It's mostly upper middle-class whites that are moving into these places. If they cn afford a Ford Excursion that gets 8 mpg's, they can probably afford a bucket of balls - and will probably do so if they don't have to spend $10 in gas going to another place.

You mean like to their country club, where they likely already have a range membership?

I wouldn't pay $10/bucket to go to a range because I've got a better range at my club, which is 25 miles away. I'll go to that range over any other in the area in a heartbeat. That's $10 in gas... but I can hit as many balls as I'd like, use the short game area, practice on the green, play three holes if I want, eat dinner, see my friends, talk to my head pro... I also don't know that mid-upper-class people are going to care to be seen at a driving range where the owner is already planning to cut corners.

Like I said, I'm prepared to eat a loss for the first couple months in order to get the operation started.

I think you're going to have to be prepared to accept a "loss" for a lot longer than the first few months.

I think you have a lot to learn about business before you go forward with this. I'm not trying to be critical here - just asking questions to which you need to have answers - and I've barely scratched the surface. Others would include: - Are you going to have a retail setup to sell some clubs? - Are you going to partner with a clubmaker for repairs and custom-built clubs? - How much will advertising cost? - How much would a yearly membership cost? - Will you partner with a local course that doesn't have a range? - Heated stalls for winter practice or no? - Is where you want to build even zoned properly? - How many golfers can you expect to fit on the range at any one time? - What's your credit score if your relative doesn't loan you the cash? And still, barely scratching the surface... I've watched Property Ladder, and starting a whole new business is orders of magnitude harder than flipping houses.

[T.J.K.]

Iacas makes some great points.

My biggest concern, which he mentioned, is the fact that pulling 100 people per day, every day is a stretch in my opinion. Even more so to think they would all spend 10 bucks on a bucket of balls.

I have never spent $10 on a bucket of balls. 6.00 at my nearest range. It's the main course in my area and I would venture to guess that they don't average 100 people per day.

I know I am lucky to get there one time a week on weekdays, and I don't want to waste my weekend time on the driving range. If I am playing, it's 18 holes. I may hit 30 balls before the round for 2 bucks or whatever but that's it.

There is also a dedicated driving range about 1 mile from the golf course I am speaking of, and I have never seen anyone there. It's lighted and nicer than the golf course driving range, but no one seems to go there.

I think there is just something about going to the golf course to hit balls.

[fusioncal]

Unless you have a different concept of driving range. I won't talk too much, but you should DEFINITELY check out this site.


P.S: Make sure you check the business opportunity section.

[lamebums]

I'm going to work on solving all the issues mentioned above over the next year or two. Currently I'm ordering a book which tells you all about how to set one up, including evaluating the market, zoning laws, insurance, and so on. My estimate of $10 for a bucket of balls is a number I pulled from looking at other driving ranges in the area. One place charges $10 and another charges $12 for a large bucket of balls. I am assuming again that most people are hackers who will buy a large bucket and flail away at the driver - I am not interested, really, in helping their game, it's all about marketability. If they get better in the process, great, it's not my issue though.

Thanks to everyone who posted - I will keep everything in mind here if I get this ball rolling.

[ettsn]

Erik nailed most of it, but I'll add a little more:

1. A typical startup should plan to endure 1000 days of being in the red (roughly three years). Thinking you'll take a loss for only a few months is unrealistic, without a whole lotta luck.

2. Market research is critical. Just "thinking" that it's a good area means nothing. Without good research to backup a business plan, good luck on getting a loan (even from your uncle, as he didn't make that kind of money making poor business decisions). What exactly is the market opportunity in the area? What other activities (golf or not) are competing for your potential customer's time and dollars?

3. Marketing plan. If you build a better mousetrap, you'll die a pauper without a mouse problem unless you've got a good marketing plan. Build it and they will come is a movie script, not reality. What are you going to do for advertising? Anything in mind for driving PR? Partnership opportunities with parallel but non-competitive businesses?

I'm not saying it couldn't work, but there are a lot more things you should consider before diving in. At your age, some business school might be worth looking into to help you understand the intricacies of the business world.

[ericm]

Living in NKY as well, I know both ranges you mentioned. I regularly drive by the Ft. Wright range and my anecdotal observation is that it seems like it is normally empty. The times I have been there, on the weekends, it is never very crowded. Maybe I'm lucky that way, though. If you are that young (retire at 22) I would go to the range and ask the people working there how many people they get during a summer day week and weekend. Hopefully they'll tell you, if not oh well. Your only other option would be to stake the place out and watch all day.

Now, as for the finances, you had better hope that your wealthy relative is willing to help you out. If not, you are going to have to go through the SBA . I couldn't imagine getting a loan on this on your own from any bank unless you have some serious connections. If you had the land to secure the loan it would be one thing, but since you want to finance that too you are going to have to show a bank where they are going to get their money back from when you go out of business. (I'm not saying you would, but that that is how they are going to think.)

You really are going to need some sort of a catch as well. As fast as the Hebron/Union area is growing I wouldn't count on just the local population. In fact, if you want to succeed in this you need to be thinking along the lines of creating a range that people will drive past the other two, and a lot further, to choose your range over your competitors. Drive out to Mason and take a look at this place to get an idea of what I'm talking about. That is the current state of the art in driving range "mouse traps."

Also, you overlooked at least one range. World of Golf .

[lamebums]

Living in NKY as well, I know both ranges you mentioned. I regularly drive by the Ft. Wright range and my anecdotal observation is that it seems like it is normally empty. The times I have been there, on the weekends, it is never very crowded. Maybe I'm lucky that way, though. If you are that young (retire at 22) I would go to the range and ask the people working there how many people they get during a summer day week and weekend. Hopefully they'll tell you, if not oh well. Your only other option would be to stake the place out and watch all day.

I am getting a book which tells you all about how to set up a driving range, and so on. Thing about Ft. Wright is, what times do you usually drive by? It seems when I usually go, it's either empty or packed (usually the latter). They would get even more business if they had a bigger parking lot, I think. I know those guys pretty well - odds are they'd tell me.

Finances - Working on this one. I am not sure about my plan for this one, but really, I am thinking out loud when I say I want to do this. Chances are pretty good I'll do it sooner or later, but I am looking at 2 or 3 years. I'm going to use the time in between to figure all this out. The only problem with setting up a state of the art driving range is the cost. But I will look into every option on the table.

[ettsn]

Oh good, you've got a book.


I think I'll pick up a book on futures trading, or perhaps Google a webpage on oil wildcatting. I understand there's good money in those fields.

[Bo the Golfer]

Hey Lamebums-I think you have a lot to learn about opening up a business but I like your fire-take some businesses courses so once you have some more facts on running a business you can decide if this is for you-I am a realist as many of the people who answered this thread seem to be but having pie in the sky dreams of owning your own business shouldn't be dashed out of hand but on the flip side you should have a better understanding of what goes into it-good luck!

[letgodsortemout]

This thought struck me over a few drinks

That's where you went wrong.

[ericm]

I go by Ft. Wright at all times of day. My office is in Covington and often go down Madison to 275 when going to see clients. I will also go that route at the end of the day sometimes. I would say I pass by 1-2 a week.

If you are looking at 2-3 years before doing this make sure you calculate what the real estate is going to cost at that point. Using today's value won't do you any good. If you know a real estate agent, that would be a good place to start when guessing at what the cost might be.

I also agree that you should sign up for some business courses. NKU would be a good option.

FWIW, here is my opinion of the Ft. Wright range. It sucks. The only reason it doesn't completely suck is because you hit off of grass. Those targets/greens are dreadful. Aesthetically, it is run down and uncared for. I go as infrequently as I do (once, twice a year, maybe) because I think they are over charging for what they offer. Like it or not, they are competing against the mental image of the higher end range and you would be too. However, what works for them may not work for you. You can't expct to be able to copy their model and expect to turn a profit just because they do.

[lamebums]

If you are looking at 2-3 years before doing this make sure you calculate what the real estate is going to cost at that point. Using today's value won't do you any good. If you know a real estate agent, that would be a good place to start when guessing at what the cost might be.

Although nothing's certain, with the housing market slowing down I doubt there will be a dramatic rise in prices. I will keep an eye out for it though, and plan accoridngly.

I also agree that you should sign up for some business courses. NKU would be a good option.

Currently there, majoring in I don't know what (currently thinking of construction management or economics).

I go as infrequently as I do (once, twice a year, maybe) because I think they are over charging for what they offer.

Here's the deal, though - it's $11 for the biggest bucket there, but it's $12 at Town and Country. I figure, in a few years they will be like 13 and 15 or something, and then I could undercut them at 12. I'm just thinking out loud here, though.

I'll take all of this into account as I put together a plan here, thanks for everyone who posted.

[erniebanks]

lams,
I bought 600 used range balls on eBay for about $ 0.10 each.
There is an 8 acre cow pasture next to my house.
instant driving range (and private)
no gas cost
no maintenance cost ( but I have to pick up the balls myself)
If I pay the kids next door a nickel a ball, they pick 'um up for me
If I hit 100 balls(a large bucket) I pay $5.00 to get them back
closest range is 14 miles away ($4.00 gas cost and 45 minutes drive)
Only problems are the pond and the "pies"
Good luck with your idea