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Miniature Golf Course Business Plan
Executive Summary
The Business
Sammy’s is a Family Entertainment Center with a world class, natural looking miniature golf course acting as the initial anchor for other attractions to be added later. Family Entertainment is a highly profitable industry that has been growing rapidly over the past several years. This is due largely to a trend within the country to return to family values. The initial profit centers will be the miniature golf course, video arcade, climbing wall, and food service.
Marketing
There are 150,000 people living within a 15-mile radius of the Firefly County site. One of the interesting facts about the miniature golf business is the breadth of the customer base. While families with children may act as an anchor, seniors, teens, and corporate customers add significant income. A variety of fun promotions keep the business profitable during the entire season. While our marketing plan is devised from other successful plans in the industry, there will be some additions as we start the business. Mulligan-Bogey Leisure Builders, our construction experts, include a marketing plan with golf course completion. This plan includes input from over 200 course owners and shows the most successful marketing programs being implemented across the country.
Management
John and Michelle Putteer have successful experience in small business ownership, personnel management, and financial management. The miniature golf course operates with only one person during the day and two or three people during peak hours. The low personnel requirement makes management easy and keeps employee costs at a minimum.
Financial
The low inventory and low operational cost of a miniature golf course allow owners to reap profits early. With first year sales projections conservatively planned this business should be profitable from year one.
Investment Objectives
Sammy’s will become operational with an initial investment from owners John and Michelle Putteer and a long-term loan. One local commercial lender has indicated an interest in the conceptual business. John has also been approached by local investors who are interested in the opportunity to invest in the project.
1.1 Keys to Success
A highly visible, well-trafficked site near the center of our service area.
Friendly, happy employees providing superior customer service.
A safe, clean environment that the community will be proud of.
Have fun while delivering a quality product.
1.2 Objectives
The main objective of Sammy’s is to use a “World Class” miniature golf course to provide a safe, relaxing setting for family and friends to enjoy quality time together, while participating in fun and exciting outdoor activities.
Objectives include:
- Open for business on April 15.
- Be profitable in the first year of operation.
- First year sales above par.
- Add a Go-Kart track to the facility after three years of operation.
1.3 Mission
The Mission of Sammy’s is to provide THE fun, affordable, family entertainment center for community members living in and around Firefly County.
Company Summary
Sammy’s is a Family Entertainment Center with a world class, natural looking miniature golf course acting as the initial anchor for other attractions to be added later. Sammy’s hallmark will be a large, natural looking waterfall and water features. Family Entertainment is a highly profitable industry that has been growing rapidly over the past decade. This is due largely to a trend within the country to return to family values. The initial profit centers will be:
- miniature golf course
- video arcade
- climbing wall
- food service
Miniature golf is NOT golf in miniature. However, miniature golf does have a lot in common with regulation golf. To be interesting, miniature golf holes must have the contour changes found on a regulation green, which cause the ball to break and turn as it rolls toward the cup. Undulations and banking give the game an element of challenge and fun.
The anchor of Sammy’s is a “new concept” miniature golf course. The industry also refers to these as “sports courses.” Unlike miniature golf courses of old, windmills and standing bears are not found on today’s courses. Miniature golf courses, however, do need unique elements to hold the players’ interest. Greens that bring water, sand traps and rough turf into play add this uniqueness to miniature golf, while still maintaining an interesting and challenging game. Modern miniature golf courses are designed with attractive landscaping, water features, and elevation changes. A waterfall is the focal point of the Sammy’s course design. The water is a defining characteristic, in both its sight and sound.
The golf course is being designed and built by the most respected miniature golf course company in the United States, Mulligan-Bogey Leisure Builders, Inc. Four other builders were considered, but did not meet the professional standards of Mulligan-Bogey Leisure Builders. Mulligan-Bogey has built more than 400 profitable courses during their 40 years in business. They have demonstrated knowledge of what is required to make a successful facility. The course will be challenging, but not overly so. This will bring customers back to attempt to better their previous score.
2.1 Start-up Summary
Total start-up cost include construction, equipment, initial expenses, and working capital. Start-up assets required include short-term assets (office furniture and kitchen equipment), and we need initial cash to handle the first month of operations.
2.2 Company Ownership
Sammy’s will be created as a privately owned Subchapter C Corporation, registered in Firefly County. Stock will be equally held by the principal investors John and Michelle Putteer. As of this writing, the corporation has not been chartered. Other options of legal formation are still being investigated.
Products and Services
Miniature Golf
The primary attraction is the world class 18-hole miniature golf course, where participants have fun for only $5 per round. The challenge in miniature golf is to make the course interesting to play. Interesting shots bring repeat business. Undulations, banking, the size of the greens, the position of the cups, the intermixing of easier holes with more difficult holes to prevent back-up on the course, and hundreds of other little refinements, which come only from experience, are the difference between success and failure.
On a well-designed course, a player is rewarded for a good putt without being overly penalized for a poor putt. If you hit the putt correctly it will go in the cup. If you hit it poorly it may take two or three putts to get it in the cup, but you are not “out of play” or holding up the group behind you.
Players take about one hour to complete a round of golf. The course can easily accommodate up to 100 players per hour during peak times. These numbers are common on weekend evenings during the summer season.
Rock Climbing Wall
The 24-foot portable rock-climbing wall offers an element of adventure for those interested in extreme sports. The wall is located on site most of the time, but has the ability to be set up at fairs/festivals, school parking lots, or company picnics.
The climbing wall is mounted on a double axle trailer. The wall is raised and lowered by the trailer hydraulics in a few minutes. Complete set-up takes only ten minutes. There are three climbing stations on the wall with state of the art auto belay systems (automatically lets you down slowly); this allows everyone a chance to climb without fear of injury.
Video Arcade
The video arcade has a mix of popular games for children of all ages. The games vary in type and skill level. Some are physically oriented; others focus on hand eye coordination. The most profitable games issue tickets that may be redeemed for prizes. The arcade will be operated on a 50-50 split with a regional arcade company. In a national survey of FEC operators, respondents reported coin-operated games, both redemption/skill and video, were the second top attraction and revenue source, behind birthday parties. While FEC operators may have different attractions, all of them have video and/or redemption games.
Food Service
A small snack bar will serve fountain drinks, hot dogs, chips, and frozen custard (ice cream). The food area will also provide space for birthdays and other private parties. A renter may use our food fare or use our outside caterer.
Customers will walk through the food service area to and from the miniature golf course. As the customers walk off the 18th hole they find hot dogs, chips, and fountain drinks awaiting them. Frozen custard is a summer favorite too. Besides lending the feel of a full outing experience, the food service is a profitable portion of the business.
Vending
In addition to the arcade business there are two other profit centers using vending machines. On the course, a bottled water vending machine is located between the 9th and 10th hole.The final fun profit center comes from three fish food vending machines located at the Koi ponds, which are a central part of the golf experience. Other course operators are redeeming $13,000 per year from their fish food vending machines.
On a national level, the top revenue generators at FEC’s are motion simulators (arcade), birthday and other parties, miniature golf, food and beverage, and go-karts.
3.1 Future Growth
As initially introduced, Sammy’s is a Family Entertainment Center, not simply a miniature golf course. Other products and services being considered in our growth plan are:
- Go-Karts
- Second 18 holes of miniature golf
- Batting cages
- Trampoline Thing
- Logo sportswear sales
- Remote control 4WD vehicles
- Lagoon for bumper boats and/or remote control boats.
Market Analysis Summary
There are over 150,000 people living within a 15-mile radius of the Firefly County site. One of the interesting facts about the miniature golf business is the breadth of the customer base. While families with children may act as an anchor, seniors, teens, and corporate customers add significant income. A variety of fun promotions keeps the business profitable during the entire season. While our marketing plan is devised from other successful plans in the industry, there will be some additions as we start the business. Mulligan-Bogey Leisure Builders includes a marketing plan with course completion. This plan includes input from over 200 course owners and shows the most successful marketing programs being implemented across the country.
Customers will appreciate Sammy’s because of the high value to cost ratio our services provide. There is nowhere else in our area where a customer can enjoy an hour, or more, of entertainment for only $5. When the customer considers the high quality of the facility, the friendly staff and the variety of entertainment available, Sammy’s will be the first choice for individual, family, or group entertainment.
4.1 Market Segmentation
Our market segmentation scheme is fairly straightforward. The Miniature Golf Club of America and the Association of Fun and Relaxation both have excellent market research and have highlighted the following target audiences:
- Individuals: There are over 150,000 people living within 15 miles of our location in Firefly County. The typical customer ranges in age from six to fifty-four, with family income over $20,900.[1] This large swath of society provides a broad customer base in Firefly County.
- Families with young children enjoy the outings. Miniature golf is one of the few activities teenagers find acceptable to do with parents. This is demonstrated in research, which shows that children 5 to 18 years old, with at least one adult, represent the largest single audience at 36.9%.[2]
- Teens and young adults, age 15 to 24, will make outings a date or group event. We note here that teens fit into two separate market segments. They may enjoy an outing as part of a family unit or independently as part of a peer group.
- Adults, age 25 to 54, find the recreation enjoyable, with or without children or grandchildren.Seniors, age 55 to 74, find the gentle form of recreation refreshing, whether alone or with grandchildren.
- Private groups using FECs range from children’s birthday parties to family get togethers.
- Organizations using the centers may be church groups, civic organizations, office get togethers, customer appreciation events, or corporate parties.
While the prime time for individual customers is evening and weekend, the wide group customer base allows Sammy’s to schedule daytime and weekday hours for maximum facility utilization.
Understanding and satisfying the customers’ needs are the key elements to a successful operation. The business goal is three-fold:
- Get the customer in the door
- Keep them entertained
- Get them to come back![3]
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[1] Telephone conversation, Sam Tix, President of the “Miniature Golf Club of America”
[2] Association of Fun and Relaxation 2002 annual report
[3] Association of Fun and Relaxation 2002 annual report
4.2 Target Market Segment Strategy
The Family Entertainment Industry has been enjoying significant growth in the last decade. Along with this growth has come research to assist the industry in further development. The markets listed below are proven segments, across the nation, for FECs to target in their marketing efforts.
A. Individuals
Families with young children enjoy outings. As the children mature, miniature golf is one of the few activities teenagers find acceptable to do with parents.[1] This is demonstrated in research, which shows that children 5 to 18 years old, with at least one adult, represent the largest market segment (36.9%) attending FECs.[2]
Teens and young adults will make the outing a date. FECs have proven popular with college age students. The proximity of Southeast State University and Firefly Community College make this segment particularly attractive. While many state college students travel home for the summer, the community college students live, or stay in the area. Adults and seniors find the gentle form of recreation enjoyable, with or without children or grandchildren.
B. Groups
Private groups using FECs include:
- Birthday parties
- Family get togethers
Organizations using FECs include:
- Church groups
- Civic organizations
- Office get togethers
- Customer appreciation events
- Corporate parties
- Group fundraisers
Group events are particularly desirable because:
- A large group of customers can be scheduled for off-peak hours
- Parties breed other parties as guests decide they want to book a similar event
- These are low cost, high profit events, that require little or no additional staffing
___________________________________________________________
[1] Telephone conversation, Sam Tix, President of the “Miniature Golf Club of America”
[2] Association of Fun and Relaxation 2002 annual report
4.3 Service Business Analysis
Family Entertainment, or Fun Centers (FEC) are defined by the Association of Fun and Relaxation (AFAR) as, “unique community-based recreation/entertainment destinations with family appeal and a reliance on repeat customers for their success.” A facility is considered an FEC if it contains three or more of the following elements as major attractions: miniature golf, batting cages, bumper boats/cars, go karts, rides, coin operated games, and soft modular play areas. After nearly a decade of exponential growth, Family Entertainment Centers are still a growing segment of the amusement industry.
In a survey conducted for the 2002 AFAR Annual Report, 89% of respondents reported increased business revenues as the new century began. In the same survey, respondents indicated 73% of customers spent over $10 per person.
Family Entertainment Centers are successful in communities with populations as small as 40,000. Profitable FECs also exist in smaller communities with adequate trade areas.
4.3.1 Competition and Buying Patterns
Direct competition for identical facilities is not found in our service area. While there are competitive miniature golf courses in Wedgeville, Mashie Woods, Cleek, and St. Andrews, they are all well outside Sammy’s service area.
There are direct competitors in the immediate area for some components of Sammy’s.
There is a video arcade in the Mall. This established facility is frequently busy with children whose parents are shopping in the mall. Other customers are junior and senior high school children who are there with friends, just “hanging out”. This competing arcade has the disadvantage of being a one-dimensional facility. They cannot offer birthday parties, miniature golf, or anything but arcade games.
There is a miniature golf course on Hwy 20 just outside Niblick City. This facility is not conducive to children because the main attraction is a Par 3 golf course with a bar in the clubhouse. The course does not offer birthday parties or other complimentary attractions.
The fact that there are not serious direct competitors in Firefly County does not mean Sammy’s will not compete with other established recreation and amusement activities for the consumer’s business. Sammy’s will target marketing efforts at indirect competition, such as:
- Movie theaters
- Bowling alleys
- Roller skating rinks
- Cape Speedway racetrack
- University sporting events
- Par 3 golf course
- Video arcade
Sammy’s also recognizes the indirect competition from local restaurants.
Sammy’s realizes that there is competition for the customer’s dollar. As the local economy worsens with the recent closure of more mills in the local area, lower income families will watch their spending carefully. Although this is an area of concern, it is also an area where Sammy’s low cost will be appealing to the consumer.
While many industries experienced downturns during 2001, 66% of FEC owners experienced steady, or growing, revenues. It is important to note that 24% of respondents to the national survey were not open for a full year before the survey. Only 11% reported declining revenues. To further support the validity of the FEC industry in economic downturns, it is noted that 73% of customers spent over $10 per person in 2001. This is a big jump over previous years where only 43% of customers had this level of spending. During good times FECs do well. During hard economic times families redirect scarce recreational resources to these low cost type of activities and FECs do even better.
History has proven there are two types of businesses that thrive in depressed economic times. These two categories of businesses are alcohol and family entertainment. As far back as the depression of the early 30s, the family entertainment industry has performed well in prosperous times and in economic downturns.