Let's be honest. Companies all over the world demonstrate the great opportunities and profit gains that can be made from golf simulators. Are the figures realistic? Some say yes, some say no. But the hard facts are purely in defining the difference between the two opposing ends of the scale.
Let's start with the failed ventures and discuss how they possibly could have failed.
To begin with, the golf simulator projects that have failed will be mainly down to three factors. First of all, the investment has been to high to achieve the anticipated return on investment. Secondly, the investment has most probably been incorporated into a loan that attracts interest, and thirdly, the investor has not researched market potential.
It all sounds so simple, but in fact it is all so true. Golf simulators are a niche market. Success is not a free ticket. Investors need to understand that the simulators do not guarantee a constant throughput of trade.
Cowlens Golf has undertaken several months of study to examine these pitfalls to try to establish the difference between a winning market and a failing one. The differences are stark, but obvious. Let's start with investment...
Investing in a golf simulator is not cheap. Nearly all golf simulators require a significant outlay, and at the same time, they also require maintenance to ensure that they perform correctly. A large investment requires an equally fast return. Therefore, approaching the simulator market this way requires a huge investment on advertising and cost benefit campaigns to encourage further business. An alternative approach is to minimalise investment and lower your risk through profit share. Examine a full investment risk and potential return against low risk investment and decide what is right for you.
Secondly, lets look at loans. Consider your loan. It nearly is impossible to offset loan interest against hire time and gain profit. Your profit margins will be minimal if not insignificant. You will therefore need to spend serious time establishing a realistic price point per hour and identifying guaranteed usage to cover costs. Loan investments will generally be successful if you can establish a facility operating three or more machines with 3-5 hours on each system per day. It really is entirely your choice. If anyone would like to understand potential ROI, please email Rachel at info@cowlens.co.uk
Finally, what about research? A profitable business model does not rely solely on the simulator. Create an environment that suits and pleases the customer to encourages a stable throughput of custom. A typical example of throughput failure can be seen in British public houses. Licencing laws in public houses has changed to 24 hours after Landlords and Pub-Co companies pushed for it. The result? Landlords and area managers failed to utilise the opportunity. Now, customers are more staggered, pubs are more empty, and trade is going down. The point here is that a fluid flow of custom is important, not the hours of operation. A successful facility manager will understand how to anticipate when demand is high and when it is low. There is little point in being open 24-7 unless facility use is guaranteed. Buy free knowledge from local golf clubs, leisure centres and health clubs. Understand how the local demographic works, take time to consider where your advantages lie and apply them to your business model.
I will talk about all three of these aspects in greater detail in future blogs. Please feel free to comment on this post. If you have any questions, please raise them on this blog, or send us a message on our contact form at www.cowlens.co.uk
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