If you believe that more than 25% of all clubs have over $1.2M- Please provide to me where I said this? Please don't put words in my mouth.
When you say clubs, you seem to be referring to Private clubs? If so I am not talking about private clubs, those are train wrecks imo. If you wanna talk private clubs, the ones that have invested in the GOLF COURSE, have increased their memberships in my area.
It simply isn't a sound business decision to invest capital without expectations of a good return- Of course I believe Certain courses in certain markets could have a great return. Losing money is not an option. Why would i suggest not having a great return?
While the goal of getting more “committed golfers” may be a good thing, it really comes down to basic revenue – you need more rounds played, a larger average greens fees, or both. If it were my business, I'd need to be convinced that revenue would increase sufficiently to offset the cost of the capital (be it a loan or from my own pocket). I'll let USGA & others worry about “growing the game”...
First off I hate the growing the game BS, and that isn't done at the top, it starts at public driving ranges with people giving free clinics to kids. You need to be exact with Revenue you seek. The more Committed golfers you have, increasing your season pass/memberships (which pay your maint.) the more you can increase public fees.
The point that I was trying to make is that, in this time of financial stress on course owners, we should look for alternatives to big “moon shot” renovations. These must be creative ways to make course improvements incrementally and afford-ably. If an owner can be convinced to initially spend $50K per year, rather than $1M - $3.5M shot, what improvements are most likely to increase revenue. Present the owner not with a $3.5M one-time roll of the dice, but instead a 5 to 10 year plan consisting of incremental spend on improvements that allow him to observe the impact of yearly capital spend on course revenue.
Private clubs overspend on Renovations, Public courses can get a lot more Bang for their dollar. Private clubs like to outspend their counterparts, plus they are easy targets to get overcharged. I worked golf course construction at a high end joint. Irrigation systems aren't cheap, they have to be replaced every 30-50 years i believe. I like the incremental improvements idea. Explain how you are going to change mowing lines with existing Irrigation, tweak greens with irrigation lines in wrong spots on the greens? The $3.5 M number is the big bang reno. It would be interesting to see if Common Ground financed the $4 M if they would of made it with the increase in revenue?
I'm interested in hearing from more ''out of the box'' shapers and Archies about making incremental chances with the Irrigation system being the big ticket item and elephant in the room?!?
Am I the only one who doubts that major renovation projects can generate sufficient revenue increases to be justifiable? (Granted that there may be cases – but very few)
I think that the answer is more due to location, area growing or declining? Are there just a bunch of 3's and no 5's and 6's. Is private golf overpriced and not good quality in area? All those factors are very very important. Is the land really good and it's just the course that is jacked up.
Most course owners can only dream of adding 40+ net new members, or adding 1600 rounds @$40+
I'd think you would be surprised if the product was really good and you spent money on advertising, especially advertising a different experience that very few have tapped. Word tends to travel fast and golfers talk to fellow golfers.
F&B as a profit center (with or without a lease-out) is also a dream
BS, One Under bar is in Livonia, MI. I think they lease out the clubhouse from the city Muni golf course. They kill it.
A $1M loan for 15 years requires a payment of over $100K per year. (at 6%)
You are correct, my bad. Have to get more investors
