Golf Pros: Will Your Population Base Support Your Business?
If you are located in a major metropolitan area, like Los Angeles, Miami, Dallas, or Chicago, do some research to discover how many people live within a 3 – 6-mile radius of your operation or intended operation. A population base of 20,000 – 30,000 people will provide a strong marketing base for a golf teacher. We will use a 30,000 population base in the examples that follow.
In lightly populated rural areas, like Iowa, North Dakota, or South Carolina, people are not averse to driving long distances. They do it every day to get to the store or to work or to school. In such an area, it’s possible to stretch the population base to a 15 – 20-mile radius from your location to achieve the desired 30,000-plus people.
If yours is the only golf instructional business in your chosen area, you have the potential to capture at least a 2 to 5% share of your 30,000-plus population base. If you run your business at peak efficiency, you will have anywhere from 600 to 1,500 potential students coming to you for lessons over a period of time. If you do your job well, many will return year by year.
Let’s suppose you attract and sign up 600 students in the course of a year, and sell an average of only five lessons to each. A few minutes on your pocket calculator will demonstrate that you can make an excellent living.
Looking at the equation from another angle, if you have a reasonably constant base of about 50 – 60 students, and give each of them one lesson a week, you will be a financial success.
The Advertising, Social Media, Promotion and Sales sections that follow in order will show you how to attract customers, and experience will quickly define the specific methods that are most effective in your market.
Other Instructors In Your Area
What if there are other golf instructors in your area? Then you must share the potential students with your competitors!
If your operation is located in a rural location with a population of 30,000 in a 15 – 20-mile radius, but there are three competing instructors in the same area, you have a problem. Unless your competitors are totally inept, your business, fourth in line for the population base, will have a tough time breaking even!
At best, all four schools will be competing for the same potential golf students. If you factor in a 40% dropout rate, you are left with 900 potential students who may or may not enroll.
Appearances Can Be Misleading
You may think there’s still room for you to prosper, and all four instructors will average enough students to make a good living. Very unlikely. There’s one elusive element that upsets the entire equation: The Establishment Factor. Your top two competitors may have been in business for more than five years, and have established deep roots in the community.
Consider the following scenario. You have carefully researched the area. Of your three competitors, #1 has an excellent location, good name recognition, and is very busy. He drives a new Corvette and just bought a big house on the fashionable side of town. He takes out full-page ads in the local newspaper every week and throws a major charity tournament and ‘clam-bake’ every year, (from which he receives tons of free press and TV/radio coverage.) He appears to be smiling every time you see them!
Instructor #2 is making a fair living, but nothing to rave about; he’s a die-hard who will grin and bear the financial ups and downs and never release his grip on his business or his students. His wife makes a decent salary as a local government officer; they live a simple, comfortable life.
Where does this leave #3? It leaves them, unfortunately, in pretty bad shape. #1 and #2 control the territory, leaving Instructor #3 with the scraps. He is open long hours and is frequently idle…. not from choice. He seldom smiles! It goes without saying that his business won’t survive and he’ll eventually have to close down or move into his backyard.
Unless the two top instructors start doing something incredibly wrong, your two chances of running a successful operation in your selected target area are slim and none.
Numbers Can Be Misleading
Sometimes, you have to probe a little deeper to get the true picture. For instance, you research your market and find that you share the territory with three competing instructors in a population base of 30,000. Should you look for another area? Is there a reason to be discouraged? Not necessarily.
#1 is a no-nonsense, tough as nails instructor who enjoys teaching low and middle handicap players, and doesn’t give group lessons. Instructor #2 is located on the local Air Force Base at a ‘Military Personnel Only’ club. #3 is a retired deputy sheriff, operating in a one-car garage, who made a lifelong career out of issuing parking tickets to everyone within a sixty-mile radius!
To your amazement, you discover that their combined active student base doesn’t exceed 180 students a year!
There Is Room For You To Do Business!
The three instructors do not appeal to the general population base. It is possible for you to capture enough of the total target market to become the leading golf instructor in the area and a solid business success.
The ‘Store Front’ Golf School
Maybe you intend to establish yourself as a golf instructor in your community, but don’t know where to start. Maybe you are already established in a location that hasn’t lived up to your expectations. Let’s face it, maybe your location is a dog and you won’t be a success unless you relocate. Whatever your situation, there is no doubt that a good location is the second key to success. All the planning in the world will do little to help you in a poorly selected location.
A great location must have high public visibility. The driving range of the country club or local public course is obviously an excellent place on which to operate, as is a pure driving range, but they are certainly not the only locations in which you can succeed.
A ‘Store Front’ operation has been proven to be a very viable option.
For this form of golf ‘school’, proximity to a shopping center is a plus. Another good location is near a popular convenience store, supermarket or drug stores, such as Publix, Albertson’s, Ralph’s, Winn-Dixie, K-Mart or Wal-Mart. Food market locations are safe bets; people have to shop for food! For the majority, a regular stop at the market is routine. The same people who buy food will see you. There will be a constant flow of people walking past your window, and none of them will look the other way to avoid seeing a student hitting shots or a group lesson under your instruction. This visibility will bring you a substantial amount of new business.
There’s an adage in real estate defining 3 factors that sell family homes and determine the highest possible sales price…
- Location! 3. Location!
For the golf teacher the same adage holds true, but with a twist…
- Location/People Volume! 2. Location/People Volume!
- Location/People Volume!
The importance of a great location cannot be over-stressed; it will make you or break you. High profile fast food chains dealing in high volume sales, such as McDonald’s, Taco Bell and Burger King, spend tens of thousands of dollars on researching and choose high visibility locations with the maximum possible foot and road traffic. Pizza Hut or Hardee’s won’t put a store on 4th and Main until they know ‘X’ amount of people will pass by their doors each and every day. Like you, they are a business people.
When is the last time you saw a local premier fast food franchise like McDonald’s bite the dust?
It does happen, but only rarely! The fast food ‘kings’ know that 15,000 cars drive by 4th and Main daily.
Experience, plus careful research, has taught them that a minimum of 200 vehicles will drive past the ‘pick-up’ window between 4:00 p.m. and 8:00 p.m. and their occupants will purchase a targeted, average dollar amount of food and drink.
People volume is a life and death affair to a fast food franchise. Can you estimate just how much the average franchise must sell to realize $1 in profit? In some cases, it is as much as $20.00! What does it mean to a golf school located near a successful fast food operation? Success by association.
The more people that pass your business and notice it from the road or sidewalk, the less money you will need to spend on advertising or marketing. Over the years, this could add up to be an extremely large sum of money.
Location Principles For A Store Front School
Your facility should be situated in a residential shopping/strip center location to realize maximum potential. Take care to position your business where your clientele will be confident they can arrive and leave in safety, and where adequate parking is available.
Your chances of operating a thriving business will be greatly enhanced if you adhere to the precepts we have outlined and resisted the lure of a low rent, low overhead location. Choosing a low rent district will be your first step on the road to ruin.
Keep in mind that most storefront instructors will pull the majority of their students from within a three-mile radius. This is especially true if you teach large numbers of junior golfers. Mom won’t drive little Johnny a limitless distance to and from his lessons.
Note: In certain metropolitan centers like New York City, some instructors have limited options, and are forced to set up business in ‘out-of-the-way’ locations due to ridiculously high rents in the more attractive areas. Their city dweller student base usually doesn’t find it a major problem. They understand the instructor’s dilemma because they are in the same boat!
However, the drawbacks are still considerable. Unaccompanied women and parents of youngsters will be reluctant to use public transportation after dark, to attend lessons at a facility located in less than ideal surroundings.
Age Group & Socioeconomic Factors
Although golfers vary in age from about 7 to 87, the prime market population ranges from 15 – 65 years of age. To operate a successful business, make sure a high percentage of those comprising the population base in your area are between the ages of 15 and 65.
2 – 5% of any given population base will express an interest in playing golf for one or more reasons.
The larger the population base, the greater the potential market.
If you can succeed in capturing 50% of your area’s potential market, your business will be highly profitable! Your ultimate goal is to capture 70% of the market and maintain this market share from year to year.
Median Income & Discretionary Income
The population base is not the only statistic to consider. What is the median income of those living in your market area?
For instance, if you had the choice of locating your school in the South Bronx (Median income: $11,000 a year) or White Plains (Median income: $52,000 a year), which would you choose?
Upscale White Plains would be a wiser choice, not only in light of the heavily urban nature of South Bronx, but because the population base of White Plains contains more people who can afford, and are likely to be interested in, golf lessons.
Discretionary income is the amount of money remaining after expenses. It is of prime importance to the golf instructor because that is the portion of income that will be used to pay for leisure activities, including golf lessons. If the discretionary income figure is very low in your area, you will be forced to teach a much higher volume of people than in a more affluent area where you could charge more.
Determining Median & Discretionary Income
How do you determine the median income of a location? How do you discover the general age, sex, occupation and income characteristics of the targeted population base?
Current figures can be obtained from the U.S. Census Bureau and local municipal agencies. Discretionary income can be determined with the EBI (Effective Buying Income), a retail trade survey of buying power compiled by the U.S. Census every 5 years. It includes information on areas of population with solid discretionary incomes, the kind of money able and eager to buy golf lessons! The EBI is conveniently arranged by zip code so you can ascertain the ability of a given location to support your business.
If discretionary income is too low, there is a distinct possibility you might be well advised to pick up stakes and find a wealthier zip code! It may be no more than a few miles away.
Bottom Line: If you want to be enormously successful, you may have to relocate where the competition for students is non-existent and you can control 50% or more of the market! Study the data!
Statistics Can Be Subjective
Small-town, Texas is a limited market for golf instruction because it only has 30,000 people and it already has two instructors. Big City, Texas, just 80 miles away, is a great place for a golf teacher, but if you select a wrong location where unemployment is high and people can’t pay their heating bills, your business will fail.
Such pitfalls are not entirely economic. You may open up in a ritzy quarter of Largetown, Nevada, and fail because the local population base spends all its discretionary income at the slot machines!
Suppose you are inclined to locate in Spanish Harlem but don’t speak Spanish. The language barrier alone would overwhelm you! It might be more advisable to locate your business in a residential section of Staten Island or Throggs Neck.
Location Analysis Exercise
You plan to open a school in Middletown, North Dakota, (population base: 70,000). About 7,000 will have some interest in golf, and between 2,800 and 3,500, (or 2 – 5%) of the 70,000 will have an interest in golf lessons.
At this juncture, you may be thinking, “Great! I have a pool of at least 2,800 motivated golfers to attract to my operation!”
Think again. How many golf instructors are there in Middletown existing off the same 2 – 5% population base?
Do your research.
You discover 8 advertised and unadvertised instructors in Middletown. The top three give every indication of being very successful. They have good locations, employ assistant instructors in shifts, and are busy eight hours a day, seven days a week. You estimate they are monopolizing nearly half the target market.
It’s ‘slim pickings’ for you and the remaining five instructors. To be generous, let’s assume the six of you are sharing about 1,800 potential students, of whom approximately half, say 900, may or may not become serious, long term, (and long paying) students. Each will have an average enrollment for the year of 150. One may have 200, and another only 100, but 150 is the average. 150 is not a satisfactory number. Consider, additionally, the effect of seasonal and holiday season attrition or dropout, causing the loss of up to one-third of the student base.
It’s time to face facts. While the top three businesses are financially successful, the others are either making a moderate to poor living or flirting with failure. All are susceptible to a number of damaging factors: an increase in expenses, fluctuations in the local economy, and dropouts. Should you enter the fray, the situation will deteriorate, and average student enrollment per instructor will fall even lower.
So, for your purposes, Middletown is saturated and it’s not a good idea to open your business there.
Note: In reality, the top three aren’t as successful as they could be. The mark of success is a business that controls 50% or more of the market share. Although the top three are all doing well financially, none of them has managed to establish themselves as the leader.
What now? If your goal is to be as successful as Middletown’s #1 instructor, consider relocating to another city with a population base able to support you. You find there are no golf schools in the nearby town of Newville, just 85 miles down the interstate, and none within a 20-mile radius of the town. Your research shows that a 20-mile radius contains a population base of 41,000 people. It appears the Newville area is a much more attractive proposition!
Return to your 2 – 5% formula. In doing your research you find 40% of Newville’s population falls into the 15 – 65 age category; 50% would be better. Further research reveals the information that Newville is ‘graying’. You will need to concentrate to a degree on catering to seniors or cut your potential student number down by an additional 10%.
Nevertheless, if you can capture 50% of the market, the area will yield enough serious, on-line clients for you to reach your goals. By maintaining a steady base of 60-100 paying students in various instructional programs over the course of the year, you will have a very successful business.
Consider Future Growth
Suppose you want to open a facility within a 3-6 mile radius of a military installation, but the population base is just under 12,000. You will be the only teacher in town, but if you capture 2-5% of the 12,000, (240 – 600 potential students), and face the fact that you could lose one-third of your active student base by Thanksgiving due to attrition, it doesn’t look like a healthy proposition!
Then you discover that the base is to be closed, and major developers plan to acquire the land and build 6,000 new homes and condominiums within two years.
A prominent computer manufacturer plans to build a plant and affiliated trade and service businesses are slated to open shop there to support what they know will be a rapid population increase. Ground will be broken for a major retirement community and a public golf course within a year. Local real estate companies estimate that the population will increase to 20,000 in 6 months.
It would be wise to seek out the best location in town and option a lease before the rents go through the roof. The first instructor to be up and operating wins a grand prize; the opportunity to sign-up hundreds upon hundreds of serious golfers!
Pre-plan and you will have an enormous head start on your competitors.
You sign an option in a great location, adjacent to a new mall, with a no competition clause preventing the developer leasing to a competing instructor. You pay $1,000 a month for the location on a two or three-year lease. The boom hits. You have established yourself as the oldest, most visible, most successful golf instructor in the area, controlling 70% of the market share.
Soon, other instructors see the potential, a year too late, and come to stake a claim on your gold mine. They get ‘sticker shock’ when faced with the challenge of spending $3,000 a month for a less attractive location in the same general area. They can’t lease one anyway, as there’s a waiting list. So what do they do? They wind up in the old part of town, or in an area where discretionary income is substantially lower, and do their best to survive on an inadequate student base, while you walk around with a smile on your face and a healthy savings account!
Some Notes About Location….
Don’t be fooled by appearances and believe that the recent failure of what appeared to be a viable golf instructor in your area is a golden opportunity for you to open up in his place. It may be ‘fool’s gold.’ You must find out the real reason he closed.
No matter how sound your business plan or how skilled you are in marketing and advertising, all the money and publicity in the world won’t make your business a success if your population base is stretched so thin that it won’t support it!
90% of all golfers said availability was the most important factor when they decided where to take lessons.
15% said they didn’t know where to find an instructor!
Great Locations Have Maximum Traffic Areas & Excellent Parking
It is a remarkable fact of modern life, that people will fight, sometimes literally, to park near the place they wish to visit. Even the athlete going to the fitness center for a strenuous workout will park as near to the entrance as he can get, even circling for a while if he notices someone about to vacate a prime space!
Remember driving into a crowded movie theater parking lot on a Friday night and happening upon an empty parking space close to the box office? Did you experience a sense of joy, elation, even victory? Did you feel lucky, special?
Do not make the mistake of minimizing the importance of parking space in selecting a business location. The public at large is very sensitive to this problem. They have to deal with it every day, almost everywhere they go.
“This population base stuff doesn’t apply to me. I’m unique!
My instruction techniques are the best! People will flock to me!”
There are those among you who will argue, “Hey! I offer quality, traditional instruction, and I’ve been teaching years longer than any of these other guys. My three competitors don’t have my experience or my record of success. Even if the population base can’t support 4 instructors, I’ll eventually capture 100% of the market because my teaching is more effective. When local golfers hear about me, they’ll see the difference and change!”
This is one of the deadliest illusions suffered by well-meaning, misinformed golf instructors who believe in their ability to be more complete, more consistent and unbeatable. We hate to have to burst this bubble, but here is the stark reality.
You may have been on the local college team, a former county champion, and considered by your friends to be the best short game exponent in the state, but the brutal truth is that the vast majority of any population base doesn’t know the difference between chipping and pitching, much less anything more specific.
The people who comprise your target market don’t care what you score. Your impressive record in tournaments, the famous match you once played in college against Ben Crenshaw, even your twenty years of experience, doesn’t guarantee you can cure a shank!
Each individual is seeking to satisfy their own personal needs and desires. These needs may be entirely different from what you imagine them to be. (More on this in the Sales Section)
Never think that because there are only two instructors in a given area, neither of them with your latent ability, you can rush in and open a new business, and quickly capture 100% of the market. It doesn’t work that way!
The race to capture the largest market share of students in any locality isn’t always won by the longest hitter or the guy who was once featured in Golf Illustrated. It belongs to the instructor with the most visible location armed with the best sales and marketing tools; the ones that are right here in this manual. Most of the time your personal ability will not be a major consideration on your road to success.
Last of all, if you aren’t a ‘number-cruncher’, don’t be dazed or confused by all the percentages and statistics we’ve listed in this article. A little practice on a basic calculator will enable you to carry out a perfectly adequate location analysis. Go back and work through the Location Analysis Exercise slowly and carefully. Then substitute the numbers that apply in your chosen area.
If you need help, don’t hesitate to enlist the assistance of a more mathematically inclined friend or associate.
All The Best,