Should I Buy a Golf Store?

[NavyGolf]

Have a bit of a situation. 

 

I will start by saying I have very little experience owning and operating a business. I ran a pretty profitable small business out someones detached garage for a year before joining the Navy 11 years ago but I did not have to experience start up costs or taxes or anything like that. Pretty much PnL, customer service, manufacturing and shipping/receiving. Now that I’m out of the service and have established a career I’ve been thinking about this golf store in town and how it’s in a great location in a town of about 13 thousand people but the ownership has not kept up with current golf trends what so ever. 
 

It just so happens that the guy who owns it is thinking about getting out of it here soon due to some health issues. The town has a pretty popular golf course with a healthy membership but everybody I talk to about golf equipment ranging anywhere from finding a putter grip to doing a driver fitting they all say they have to drive an hour and a half in one of three directions or order it online because they know this store in town isn’t going to have it. 

 

I am pretty obsessed with the golf swing and golf equipment/fitting so I would be leaning more towards offering a custom fitting experience and that being the main focus of the business. If any one has some small business or golf store ownership experience and would like to impart some wisdom that would be greatly appreciated. 

[ewaldbeukes]

Would be intrigued if anyone has more information on the golf store business model. Hoping you get a good response.

 

What I can say is see if you can do some polling with the residents to determine what needs they have, what they would pay for those things etc. That would give an idea of the types of value added services that will bring feet to your store and then build in club sales with good fitting advice. In a small community, you win if you are a well liked and respected local from experience and that would count for a lot.

 

I am estimating but distributer margins are solid, would think 50-100% GP markup... so depending on volume and the businesses you rep for could work out.

Edited August 15, 2023 by ewaldbeukes
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[Mikey_HACKilroy]

You could get in touch with a non-competitive golf business and talk to them about it. By that, I mean a golf store that's not operating as a competitor to you in another market. I think you can get in touch with them through various small business resources (not 100% sure, but it is a common practice).

That way, you can find a successful model and try to replicate it.

 

I thought about this myself, actually. 😄

[AzRoger]

One concern in a small town is if a golf business can survive with a small customer base. I live in a small city (~40K) with two golf courses but no standalone golf store, just the small pro shops at the golf courses. The pro shops seem to get most of their 'golf equipment' business from members spending down their tournament winnings credit. Most do travel 90 minutes or more for a fitting when needed, it would be difficult for a small shop to be able to compete with the offerings (club/shaft selection) of one of the big chain fitters. No idea what it would cost to get a good fitting studio up and running but my guess is big $$$'s. 

[jvincent]

9 hours ago, NavyGolf said:

I am pretty obsessed with the golf swing and golf equipment/fitting so I would be leaning more towards offering a custom fitting experience and that being the main focus of the business. If any one has some small business or golf store ownership experience and would like to impart some wisdom that would be greatly appreciated. 

 

My two cents. For a town that size, you are going to be hard pressed to get enough volume.

 

For the fitting business to thrive you need either a large population base and with online sales being so big you won't be able to move enough hard goods unless you've got the traffic that a fitting operation, or large golf destination nearby, supports.

[me05501]

That's not a big enough local customer base to support the kind of shop you're talking about.

 

My questions would be:

• Could you draw a customer base from a larger metro area from the location in question? What is the population within 50 miles of the storefront? How many golf courses/driving ranges are within that circle? 
   
• Are you comfortable selling online and how would you go about doing so without violating your vendor agreements? 
   
• Are you interested in selling used equipment alongside the new? 
   
• Will you be able to secure vendor agreements and fitting carts from your preferred brands? Will you be able to buy inventory at competitive wholesale prices? 

For comparison I live in a metro area with about 800,000 residents. There are about 7-8 private courses and 8-10 public courses where gear is offered in a pro shop. We have a few retailers like Dick's that offer quite a bit of current golf inventory. There's one range that thrives on lessons and fitting.

 

Then there's a single dedicated golf retail store that has been here for 30ish years under a few different names. From what I understand the store is affiliated with a buying network of stores who procure their inventory as a group to ensure their supply of merchandise and get it at good prices. They always have the latest stuff and the staff has stable for years so I assume they take good care of their people. They have two indoor fitting bays that see a lot of action. They have a great location near the biggest shopping area in our region. It seems like they sell everything face-to-face...as far as I know they don't have a mail order operation. They also do a lot of club repairs. 

 

*****

 

There are a few other angles to golf retail that seem to be gaining traction. 

 

I'm aware of several guys within 200 miles of me who buy and sell used iron sets on Facebook Marketplace. Most of them have a simple website you can visit but I get the impression that FB is their primary way of creating sales. None of them have a physical storefront at this point. 

 

This would be a relatively low-risk way to test the waters and see if the business suits you. 

 

*****

 

Another angle is small storefront/huge online presence. 

 

A lot of the sites we buy from look flashy and impressive online but are kind of underwhelming to visit in person. 

 

This seems like a really saturated market to me. You'd have to have a very solid way to differentiate your store from all the rest. 

For example I have bought a lot of stuff from grips4less.com either on their site or via Amazon Marketplace. I have no idea what their retail operation looks like or even if they have one. All I know is they have the inventory of grips and shafts that I need and they ship very quickly. 

 

 

[NavyGolf]

33 minutes ago, jvincent said:

 

My two cents. For a town that size, you are going to be hard pressed to get enough volume.

 

For the fitting business to thrive you need either a large population base and with online sales being so big you won't be able to move enough hard goods unless you've got the traffic that a fitting operation, or large golf destination nearby, supports.

There is a very large golf destination within 30 minutes of this town/shop. I have a family member that caddies there and a few times he has been with groups who have needed various club repairs on a Friday or Saturday night for the rest of their trip and he has brought them to me. I have enough of a personal inventory to piece them together what they need to get through the trip by the next morning. Have a few signed baseballs from former and current big leaguers for the help. 

[third-times-a-charm]

Sounds kind of like those episodes of 'save my restaurant' on TV where the host asks the owners why its failing and they just go 'oh we dont know, we've never ran a restaurant before, we just bought one and thought it would be fine'.

[me05501]

43 minutes ago, NavyGolf said:

There is a very large golf destination within 30 minutes of this town/shop. I have a family member that caddies there and a few times he has been with groups who have needed various club repairs on a Friday or Saturday night for the rest of their trip and he has brought them to me. I have enough of a personal inventory to piece them together what they need to get through the trip by the next morning. Have a few signed baseballs from former and current big leaguers for the help. 

 

Seems worth considering whether to try to locate your shop closer to the resort. 

 

Just because a specific business is for sale in a specific location doesn't mean it's your best move. Easy to forget that. 

[ChaosTheory]

I gave a lot of thought to this kind of thing about 15 years ago, and have the experience of having owned and sold a successful multi-location retail operation unrelated to golf. 

 

Without much to go on, I think the market is too small to make much of a business.    If you were the only shop in a town of 100,000, then maybe.   To make this one succeed, I believe you'd have to build some sort of online golf business that would be your actual money maker, with the local market being a nice supplement.  There are still niches to be exploited in the online business.  Long putters for example.  Single length irons, maybe.  Full sets of hybrids or fairway woods.  Shorter and longer drivers, things like that that are not what everyone else is selling. 

 

Otherwise, this store is a hobby in which you might make or more likely lose money, unless the rent is super super cheap. 

 

This advice is worth what you paid for it!  🙂

[MattM97]

If it was me I might ask the owner to see the books to see if it's even bringing in any customers as it is. Are they actually making money or does the business cost next to nothing for him to run and he's just happy doing it? 

 

I also find a lot of smaller golf shops they don't often have good stuff and their bread and butter is club work and survive on that and definitely something you'd need to do or pay someone to do. 

 

The resort part is good but anything needed I'm going to assume most will just grab whatever at the pro shop vs driving an hour. 

 

Just my thoughts on it. 

[Fuscinator]

No. Once you make a hobby your job, it's no longer fun, it's work. I think it's a move you should only make if you have no choice. For example, when I was in high school, music had already turned into work instead of fun, so it was just a matter of figuring out how to get paid for it (which I eventually did). When you go on vacations, you probably make playing part of your plans. Once it's your job, you'll be going on vacations to get away from golf.

[tatertot]

No

[596]

I've owned 3 businesses.  Ranging from purchases of $600k to $4m.

 

Do a lot of research before you buy.  Research all the current business P&Ls. Have a business plan going out at least 5 years.  Be sure you have 10s of thousands of working capital at minimum. Look into an SBA loan. 

 

That's a small town with 1 golf course. What percentage of people play golf? Very small.  How many of those people will buy from you, not on line? What will your gross income be each year? How will it increase each year? What will your overhead be?  Lots of questions you have to know the answers to before you consider buying. 

 

The 3 businesses I purchased all included the property and buildings. No rent. But a huge mortgage. 

Edited August 15, 2023 by 596

[st1800e]

Lots of online guides starting and running a business.  Do some research. here’s one. 
 

https://www.rbcroyalbank.com/business/advice/how-to-start-a-business-in-12-steps.html

 

while you are familiar with golf, and fitting , you'll need some real training to be a fitter. 
 

Not sure of your location, do you have a 12 month golf season?  Winter can be pretty slow if there’s no golf being played.  
 

And beware of startup costs, they’re typically higher than one thinks.  Do you want to risk your life savings?  
And consider this.

 

https://www.forbes.com/sites/ellevate/2019/10/24/eight-common-reasons-small-businesses-fail/?sh=288587344fbb

 

Not trying to discourage you, but you need to go in with eyes open.  

 

 

 

[Ferguson]

Should I stop reading the "general golf topics?" 

Yes.   Yes, GD-IT!

 

Must be like someone hooked on the smack. 

I just can't help myself. 

[596]

Most businesses fail because they are under capitalized. You have to have enough money/cash to last at least 3 years with no income from the business. 

[weavej1]

As with any business venture it’s what is the cost to buy it…$1000 to buy him out?….great go for it.   $100k?   Different. 
 

In my outside view looking in, one of the greatest challenges is you can’t stock everything.  But that traveler wants a ventus blue shaft in regular …and wants it now.  You can’t get it to arrive fast enough, you are paying an “up charge “ in delivery fee every time you order something from your supplier.  You can’t afford to buy every shaft/grip combo and risk it never selling before the latest and greatest item is out next year.   It seems to be an inventory heavy business.

[raspymcnasty]

Youre going to have to get a SBA loan to keep rolling inventory. 
Also you have to decide what kind of inventory you are going to keep. Do you buy it and keep it going or do you charge by floor space?

[shankz]

Hope I don’t offend anyone but I think recession is around the corner for most businesses. 

[ilikegolf26]

 

22 hours ago, NavyGolf said:

Have a bit of a situation. 

 

I will start by saying I have very little experience owning and operating a business. I ran a pretty profitable small business out someones detached garage for a year before joining the Navy 11 years ago but I did not have to experience start up costs or taxes or anything like that. Pretty much PnL, customer service, manufacturing and shipping/receiving. Now that I’m out of the service and have established a career I’ve been thinking about this golf store in town and how it’s in a great location in a town of about 13 thousand people but the ownership has not kept up with current golf trends what so ever. 
 

It just so happens that the guy who owns it is thinking about getting out of it here soon due to some health issues. The town has a pretty popular golf course with a healthy membership but everybody I talk to about golf equipment ranging anywhere from finding a putter grip to doing a driver fitting they all say they have to drive an hour and a half in one of three directions or order it online because they know this store in town isn’t going to have it. 

 

I am pretty obsessed with the golf swing and golf equipment/fitting so I would be leaning more towards offering a custom fitting experience and that being the main focus of the business. If any one has some small business or golf store ownership experience and would like to impart some wisdom that would be greatly appreciated. 

 

12 hours ago, third-times-a-charm said:

Sounds kind of like those episodes of 'save my restaurant' on TV where the host asks the owners why its failing and they just go 'oh we dont know, we've never ran a restaurant before, we just bought one and thought it would be fine'.

Edited August 16, 2023 by ilikegolf26

[PJE]

No.
This sounds like a fun opportunity but I think it will turn into a cash losing nightmare. 
Don’t do it. 

[cardia10]

As long as the internet exists, unless you are a millionaire with lots to lose, then don't invest in golf bricks and mortar. The losses will be quick or slow and draining, but it will all be losses.

[WristySwing]

On 8/14/2023 at 11:41 PM, NavyGolf said:

Have a bit of a situation. 

 

I will start by saying I have very little experience owning and operating a business. I ran a pretty profitable small business out someones detached garage for a year before joining the Navy 11 years ago but I did not have to experience start up costs or taxes or anything like that. Pretty much PnL, customer service, manufacturing and shipping/receiving. Now that I’m out of the service and have established a career I’ve been thinking about this golf store in town and how it’s in a great location in a town of about 13 thousand people but the ownership has not kept up with current golf trends what so ever. 
 

It just so happens that the guy who owns it is thinking about getting out of it here soon due to some health issues. The town has a pretty popular golf course with a healthy membership but everybody I talk to about golf equipment ranging anywhere from finding a putter grip to doing a driver fitting they all say they have to drive an hour and a half in one of three directions or order it online because they know this store in town isn’t going to have it. 

 

I am pretty obsessed with the golf swing and golf equipment/fitting so I would be leaning more towards offering a custom fitting experience and that being the main focus of the business. If any one has some small business or golf store ownership experience and would like to impart some wisdom that would be greatly appreciated. 

 

I am going to ignore the logistics for now, but can you elaborate on your last paragraph that I have highlighted? Do you have fitting, sales, and repair experience? There's a big difference between guys that can talk shop and actually know how to fit.  There's so many complaints about local big box stores or shoddy fitters out there for this reason.  They can sit there and say until they are blue in the face "the Tensei White is a low launch shaft" but that in of itself doesn't mean anything.  Do you enough about iron CG, swing path, bend profile, shaft weight, grip size, and such and how it can impact someone's delivery?  Just think about it from an outsiders perspective for a second.  They are coming to you because they expect you know what you are talking about and can help fit them.  If you stumble through a fitting for 45-60min without really helping them or not showing them any improvements they are unlikely to come back to you and very likely to be pretty vocal that they paid $XXX to accomplish jack.  

 

You need to be pretty confident in your ability to a) fit people correctly and back that up with evidence and b) close a sale with either competitive pricing or some sort of edge that the average person doesn't have from just ordering off of a random website.

[Redpro]

Hard no.

 

I was a competitive cyclist for many years, opened a bike shop.

 

My wife gave me a card when I sold it after 3 years; "Congratulations on selling your dream before it became a nightmare".

 

 

[lefty1978]

Sounds like a bad idea to me. I would pass.

[Mych]

No... not enough customers.

 

It may be worth considering a small home-based repair business. You can advertise repair services at the local course and get some word-of-mouth customers, but it sounds more like a hobby or side-hustle than a full time business opportunity. If the local shop doesn't carry much equipment, it's likely because they can't meet the minimum volume requirements for different manufacturers. 

[dabohammer]

@NavyGolf I'm a little late seeing this, but I work in finance and have put together tons of small business deals, acquisitions, partner buyouts, etc.

 

I am happy to help with more info if needed