Budgeting and Financial Planning for Golf Courses
The average annual maintenance costs for a golf course in the United States are more than $810,000. This ranges from around $620,000 for a municipal golf course to in excess of $1 million for a private golf course.
In terms of labor expenses, the overall average for a golf course is more than $463,000, again with private golf courses having by far the biggest expense. The average public-access golf course in the country has between 12 and 18 maintenance employees, while private clubs tend to range from between 18 and 25 maintenance employees.
The simple fact is that it is incredibly expensive to run and maintain a golf course. That's why it is so important to understand budgeting and financial planning. In this blog post, we will highlight practical tips when determining your golf course's available budget and share ideas on how to increase revenue.
Tips for Budgeting for Golf Courses
Every golf course should have both budgeting and business plans that account for both its routine and long-term needs. This is essential to ensuring its long-term success. Here are three practical tips to help you better budget for your golf course.
Determine Your Maintenance Standards
When evaluating the labor expense of your staff, it's important to compile a set of maintenance standards that your course should aim to achieve. There are a number of questions that you and your committee should ask when compiling these standards, such as:
- How frequently should you mow fairways, greens, tees, and the rough?
- How often should you change pin locations?
- How often should you rake bunkers?
- How often should you edge the cart paths?
- How often should agronomic tasks be performed?
Once you understand the answers to these and other questions, you will be able to determine the man-hour requirement to meet the established expectations of your club.
Determine the Expectations of Your Members
This is tied in with the above point. The question to ask here is "What are the expectations of your members and people who could reasonably choose to play at your golf course?"
It's important to understand the level of conditioning and detail required to compete with other golf courses in your area and what is required to sell rounds within your market segment.
You should closely consider the expectations of potential players and what you believe is achievable considering your available revenue.
Lease or Buy Equipment?
Labor is by far the biggest expense for a golf course (56.74%). This is followed by expenses such as fertilizer (5.05%), equipment lease expense (5.01%), repair maintenance/equipment (4.56%), fungicides (4.28%), and fuel and lubricants (2.65%).
Many golf courses wonder whether it is better to buy or lease equipment. Generally, it is a good idea to lease everyday machines such as sprayers, mowers, and riding-bunker rakes. These machines are typically leased for between three and five years, then replaced when the lease expires.
In the case of equipment that is not typically used everyday, these are typically purchased. Such equipment includes vacuums, dump trucks, aerifiers, and over-seeders.
Ideas for Generating Revenue at Golf Courses
Golf courses face tough competition. This is true not only when considering the number of golf courses around, but also from other recreation facilities. Here are three revenue-generating ideas for golf courses.
Consider Tiered Memberships
By offering tiered memberships, it is possible to appeal to more customers. For every person who plays three or four rounds per week, there are likely several people who have expectations of getting in 18 holes once or twice per month.
By offering a variety of tiered packages at different prices, you can sell more club memberships. It allows each member to budget accordingly and choose the exact level of participation that fits their needs.
Naturally, the more expensive a membership package is, the more services it should include.
Capture Wedding Business
It's not just through rounds of golf that a course is able to generate revenue, of course. Golf courses are a popular place for a host of different events related to tie-ing the knot, including bridal showers, rehearsal dinners, wedding ceremonies, and receptions.
Given the on-site dining services, incredible scenery, event space, and professional staff, golf courses are able to take advantage of the wedding industry and increase their revenue. We recommend that you utilize your social media platforms to promote this side of your business.
Drive Pro Shop Sales
When it comes to your pro shop, it's recommended that you place your brand image on items. This will help to create an identifiable line of course merchandise. For example, you should include your logo on umbrellas, windbreakers, hats, and other items for sale.
You can also create exclusive merchandise to honor long-term members and those who achieve an incredible score (such as a hole-in-one). Members, particularly top-tier members, should be offered discounts and exclusive offers to drive repeat shop stops. Having one-of-a-kind merchandise is something that people always like to show off.
Budgeting and Financial Planning for Golf Courses
Here at Hampton Golf, we are a premier golf course management and development firm. We provide a wealth of experience in all aspects of the hospitality industry. Our team manages 30 golf courses and facilities throughout the United States.
We are dedicated to growing a club's bottom line through smart financial planning and first-rate golfing experiences. If you would like to learn more about our work and how we can assist your golf course, don't hesitate to contact us today.
Call us at (904) 564-9129 or click here to send us a message.