The Five Most Common Mistakes in Planning Indoor Golf CentersPosted by Bill Bales on: June 3, 2011
Author Bill Bales is Founder of aboutGolf
The indoor golf center is a unique, challenging, fulfilling, exciting business. Central to traditional indoor golf centers are golf simulators – such as those offered by aboutGolf, which have become the most favored indoor systems in North America and throughout many parts of the world. There is one very strong fundamental reason for this global preference –aboutGolf simulators generate more revenue, as users favor aboutGolf simulators for their accuracy and realism. Additionally, aboutGolf simulators provide a quality of play that sustains user appeal year in and year out.
But, simulators alone don’t make indoor golf centers successful. In fact, there are five common planning mistakes made by indoor golf centers that can challenge success:
Mistake No. 1: Thinking that “if you build it and they will come”
Many new indoor center operators expect that if they acquire the correct simulator everything else will take care of itself. It is true that getting the best simulator is absolutely critical, but customers can be very discerning and if they don’t have the right (translation: realistic) experience they won’t come back. Good centers with the proper simulators can generate as much as $60,000 or more annually per simulator in direct revenue, while those with lesser simulators often average less than $10,000 annually per simulator in direct revenue.
But to succeed in the indoor center business, operators have to operate intelligently and aggressively. All revenue sources need to be considered and marketing skills must be strong. Operators need to work their businesses every day and get every last nickel out of the business assets. Please continue to reference this blog for proven ideas and methods to indoor center success.
Mistake No.2: Thinking a center can include a successful pro shop
Many indoor center operators desire to include a retail pro shop in their facilities. While there are some angles that might work – such as custom club fitting with the proper system and fitter, logo caps, a few golf gloves and teaching aids who know how to promote the facility – for the most part, this is a losing proposition. The most fundamental reason a pro shop won’t work in an indoor golf center is due to big-box store domination in American retail. Basically, these stores offer selection and pricing that can’t be matched. There is just no upside to going into the pro shop business.
Mistake No. 3: Thinking a center can include a successful restaurant
If the operator is an expert restaurateur and wants to open an indoor golf center, he or she might consider how to do so in separate but contiguous spaces. This will be difficult because the ideal indoor center location (accessible, but off the main drag where rent is lower) is not compatible with the ideal restaurant location (at the corner of “better and best,” where the rent it higher).
If the operator is not an expert restaurateur, food and beverage selections should be limited to the basics, such as tasty sandwiches, high quality pizza and suitable beverages (beer and wine can be assets). The idea is to offer quality comfort food to the simulator users, but no one is going to visit simply to eat – there are simply too many better dining options available.
Mistake No. 4: Installing a putting green
Unless an operator plans to adopt a pure membership model, whereby customers pay a fee to use all the facilities offered, he or she shouldn’t get lured into building an indoor putting green. It seems like a logical thing to do, as most golf courses have practice greens. However, a 3,000 square-foot putting green at a 200 acre golf course is much more reasonable than a 3,000 square foot putting green in a 10,000 square-foot indoor center. Indoor centers are retail operations, and the most fundamental rule in retail is revenue per square foot. No one is going to pay for the privilege of putting on an indoor green while he or she waits to get into a simulator, and zero dollars per square foot from an expensive amenity will just not work.
Mistake No. 5: Locating in a strip mall
Some centers have survived in strip malls, but it is not a good choice for two primary reasons:
1. There is something rather inhibiting about lugging a golf bag across a crowded strip mall parking lot – it just doesn’t feel right. Providing a quiet location where the walk from the car to the front door is fairly direct makes customers feel better about coming to play indoor golf.
2. Strip malls are located in high traffic areas, which often means to higher rent. Because indoor centers are “destination businesses,” with extremely few exceptions, approximately 90 percent of revenue will be derived from repeat business. As long as the center is located in a safe, accessible building with plenty of parking space, customers will come. Operators should strive to pay no more than $12/square foot/year in total occupancy cost.
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