Whether you’re into golf or know that there’s a demand for a place to practice in your region, a driving range can be a good business idea.
However, with multiple complicating factors, it’s important to consider your options and potential revenue before getting started with owning a driving range.
For example, the difference in cost between an indoor and an outdoor range can be massive because of the equipment needed.
On average, you can expect to pay at least $400,000 to open a driving range in an urban area. Those costs can drop to under $250,000 outside of city limits. And, if you’re building a driving range indoors, in a big city, total costs might be in the millions. This means the cost of opening a driving range runs between $250,000-$10,000,000+.
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Average Cost Of Opening A Driving Range
The average cost of opening a driving range will depend on the range, your geographic location, and whether you choose to build it indoors or out.
For example, Top Golf, a large indoor golf range “resort”, has a franchise investment of $15-$50 million. On the other hand, a small-scale outdoor range might cost about $50,000 + the cost of the land it’s on.
Indoors/Outdoors
An outdoor driving range is normally very cost-effective to open and start. However, it may still require significant investment into landscaping, grass, and even watering systems.
Once you add on building structures or covered bays, you’ll have to calculate the costs of the building.
Prefabricated steel buildings can cost as little as $7 per square foot, or as much as $25 per square foot. If you use another material like concrete, you can expect costs to be between $100 and $250 per square foot.
If you have an outdoor facility with covered bays, you’ll likely need about 9-12 square yards per bay. You can add up the number of bays you want to figure out how large the covered area should be.
In addition, you’ll need covered areas to store equipment, including covered areas for the ball retrievers. And, if you’re selling food or golfing equipment, you’ll have to calculate those areas as part of the building.
If your full range is inside, you’ll need a significantly large building. Here, your driving area must be at least 350 yards long.
For this reason, virtual golf simulators are also popular. However, most people wanting to practice will prefer the real thing.
So, if you’re building a 500-square-yard building, that’s about 4,500 square feet. You’ll need about $50,000+ for just the outside structure, before insulation, plastering, trim, etc.
Because most ranges will be larger than that to accommodate restaurants, lounge areas, and putting ranges, you should expect to spend significantly more than that.
Of course, you can always take the approach of having half of your bays indoors and half outdoors. That will minimize costs, while ensuring you can maximize profit.
Land Costs
Across the United States, a 20-acre lot of land averages at $511,200. If you’re in a big city, you can expect that to go up significantly.
For example, in New York, you can expect to pay well over $1,000 per square foot. In most of the U.S., the land costs will average between $2 and $50 per square foot.
This can mean that land is the most significant cost factor in opening a driving range.
Amenities
Many driving ranges make the most of their money by offering amenities like food, drinks, or golfing equipment.
Here, the average cost to open a dining facility will cost around $450 per square foot. From there, you’ll have to add on food licenses, health inspections, hiring employees, menu development, etc.
Sage.com and FreshBooks both calculate that as an average expense of just under $4,000 per seat. Still, offering food can greatly increase the revenue of your facility. That’s especially true if you have an indoor area where people can socialize.
Supplies and Technology
Every driving range will need a significant amount of supplies. You’ll need golf balls, rental clubs, mats, tees, glasses, protective headgear, gates, and machinery.
In most cases, you can spend as much or as little as you want on equipment.
For example, a fully autonomous golf ball picker will cost $12,000+ for a robot with a 3,000-ball capacity. But, you could get a manual picker and attach it to your lawn mower to achieve the same result – albeit for more labor.
| Supplies | Cost |
|---|---|
| Golf Balls | $0.50 to $2 each |
| Ball Management System | $5,000-$200,000+ |
| Payout Systems | $2,500+ |
| Launch Monitor | $2,500-$12,000 |
| Pickers and Collectors | $1,500-$12,000 |
| Washers | $300-$6,000 |
| Tee Dispensers | $1,200-$4,999 |
| Tee Ups | $99+ each |
| Golf Mats and Flooring | $50-$800 each |
| Bay Dividers | $150-$800 each |
| Targets | $5-$250 each |
| Simulators | $1,000-$25,000 |
Business Costs
Business startup costs will always factor into opening a driving range.
For example, lawyer’s fees, costs of business loans and financing, and any memberships (such as USGA). In addition, if you sell food, you’ll have to pay health inspection fees in your state.
Advertising, hiring, and marketing are all also important as part of opening a driving range.
In most cases, you should budget at least $10,000 for hiring people, marketing, and ensuring that people know where your driving range is.
Opening Driving Range Price Factors
If you’re opening a driving range, the most significant cost factor will always be land. However, building, franchise costs, and even facility type will all matter.
The following four cost factors will be the most influential on your total costs.
Location
Buying land in New York is extremely different than buying land in Texas. Across the U.S., you can expect a 20-acre plot to sell for anywhere from $180,000-$500 million+.
That’s a significant price difference. However, the higher the population density, the more land costs.
Of course, higher population density also translates into more customers. So, buying cheap land away from a city may backfire.
On the other hand, many people won’t mind driving a bit to get to a driving range.
This means that providing you spend on advertising, you may be able to get away with moving your range further away from an urban area to cut down on costs.
Franchise Costs
If you choose to install an existing golf range franchise, getting involved in the business can be costly.
For example, BigShots requires $9,000-$410,000, Top Golf starts at around $12 million, XGolf charges a $30,000 franchise fee but requires liquid cash of at least $200,000, Motion Golf has a franchise fee of $79,500, etc.
Participating in a franchise may help you make more money.
That’s because customers will likely already know the brand, you’ll have the franchise to help with research and equipment selection, and most of the work of selection and setup will be done for you. That can be extremely time- and cost-saving.
However, it’s also important to research if taking part in a franchise is worth it for what you want to set up.
Indoor Facilities
Indoor facilities can allow you to offer social outings, food, alcohol, and protection from the elements. All of those things can greatly increase your revenue.
However, building structures and indoor facilities will always cost more than a simple outdoor range.
On average, you should expect to pay around $800 per square foot of indoor space. The price will spike for areas with amenities like food and lounge areas and will drop for areas like indoor ranges.
Size
The larger your range, the more you should expect to pay for it. A simple 8 bay range will always cost less than a 20 bay range. In addition, the longer and more luxurious you make bays, the more it will cost.
Types Of Golf Ranges
There are many different types of driving ranges. In most cases, every range will have a selection of different length ranges, rules, and even obstacles.
However, you can also have a series of ranges with the same rules, lengths, etc.
Indoor Driving Range
Indoor driving ranges either offer protection from the elements and warmth in the winter or a social outing. These range from simple heated bays to elaborate lounges with golfing areas.
Indoor ranges are extremely popular because they offer social activity and may even include alcohol for people who want to go as a group or party.
Outdoor Driving Range
Outdoor ranges are the most standard form of golfing range. These are cheaper, easier to build, and can extend anywhere from 300-600 yards.
A standard setup is 18 ranges, complete with different lengths, a putting area, and a tee area. These ranges may have a snack stand or a small quick-service restaurant, but that’s usually it.
Automated Driving Range
Automated driving ranges are normally designed to require minimal or no attendance.
Here, customers can access the bay by using a card or paying for entry. They then pay for balls and tees from a dispenser. And, a ball picker will automatically return balls to the ball management machine.
Automated driving ranges are a good choice for areas with fewer people. They require less ongoing investment, because you won’t have to pay people to run them.
However, without the option to sell extras like food or golf clubs, the extra income will be low.
However, it’s not all or nothing. Some manned golf ranges benefit from adding automated bays, which they can leave open 24/7.
If you know there’s a small amount of demand for night-time golfing, but not enough to keep the full range open, offering a small amount of automation may be a good idea.
Virtual Driving Range
Virtual driving ranges use simulation equipment to simulate what a ball will do when hit. These machines typically cost $1,000-$25,000+. However, they may be cheaper to install than a full range of a similar size indoors.
At the same time, people looking to practice will normally prefer a real game with real balls. Therefore, virtual driving ranges are more suitable for anyone looking for a social outing or entertainment.
If you know what your market is, you can easily choose which of those you want.
How Much Land Does A Driving Range Need?
Most driving ranges should be at least 300 yards long to meet the average driving distance of 250 yards for most amateur golfers.
However, if you want professional players to be able to use your driving range, you’ll need at least 400 yards instead. And, if you want to advertise your range for “long drive” practice, you’ll need 500 yards. Most aim for about 350 yards long in total.
Most driving bays are about 3 to 4 yards wide each, leaving enough room to freely swing a club, to have company, and to have equipment. If you want to have ball rental machines per bay, you’ll have to make room for that as well.
You’ll also want about 10,000-15,000 square feet as a putting area. And, if you want to increase revenue by selling food and drink – which you likely should, you’ll need room for that too.
So, most driving ranges are recommended to be 18-20+ acres.
Is Owning A Driving Range Profitable?
The profitability of any business depends on how many customers you have, how much you spend, and what your profit margin is. Here, one of the most important factors includes startup costs.
For example, if you purchase an expensive plot of land in an urban area, you simply might not be able to earn enough to cover costs.
Here, it’s a good idea to research your total costs and operating costs.
For example, what does a bucket of golf balls rent for in your area? In most, it’s $3-$25 depending on how many balls are included.
How many customers can you expect per day? How much competition do you have?
If you have a restaurant, what is your profit margin there? Are you selling clubs? Is there a demand for them?
According to the U.S. Golf Driving Range Survey, golf ranges have a profit margin of 8.5% to 35% on average. If that offers enough of a return to cover costs and return your upfront investment, your range may be profitable.
Driving Range Cash Flow Composition
Driving ranges earn money by renting balls, spaces, and by selling extras. In most cases that includes:
- Golf Balls – Most rent by the bucket of 10-00+ balls, with prices ranging from $3-$25 per bucket.
- Clubs – Visitors’ who don’t bring their own clubs can rent a set. Most start rates at around $15 for a basic set.
- Entry – You might charge an entry fee, which may include a small bucket of balls. This is usually $5+.
- Membership – Memberships allow heavy users to benefit from cheaper access. However, they offer a guaranteed income. And, many people won’t fully utilize memberships anyway. Normally, membership rates hover around $50-$100 per month.
- Equipment – Many golf ranges sell golf equipment such as clubs, bags, sporting goods, towels, etc.
- Food and Drink – Offering food and drink means golfers can eat and drink while on the range, so they stay longer. It also increases sales per customer. And, if done right, it will mean people are more likely to go to the range as a social outing.
Summary
Driving ranges are a multi-million-dollar business in the United States. However, startup costs can be high. Depending on your area, it may not be a good idea to invest in one. On the other hand, if you know there’s demand and can invest for a reasonable amount, it may be a great business idea.