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Bill
01-26-2011, 08:12 PM
Hey all...new to the site and realized what I posted just a few minutes ago (somewhere else) may be more appropriate here....sorry....and here goes:

Money questions

Hey all. I've been thinking that, when I retire from my current job with the State, I'd open a miniature golf course/ice cream stand. This is still 4 years down the road, but I love thinking about the idea, and have questions brewing in my head. The first is money. I don't know how difficult it is to get a small business loan, and I'm figuring when all is done and ready to go, I'll need around 300k. I'll have about 60-70k of my own saved up, and my credit rating should be in the 700s. Giving what little I've told you (I know much more is required, i.e. a business plan etc.), will they give loans like this to start up business?

Next, I've been doing a lot of research on other places like that I would like to start. Now my plan is to visit many (especially those built by the same company I'm considering using to build mine), but I'd like to know more about the financial situation of the places near me. Is there a way, a public record perhaps, you can see the money situation of a business without cornering the owner and letting him know what you're up to?

Last one: Is it worth it to find the land I'd need (thinking about 2 acres), work on buying it in advance (which means having less money than the 60-70k I said I'd save). I'm thinking the bank that may or may not give a loan would be more impressed with having the cash rather than the empty lot waiting to be built on. Any thoughts? Thanks all.

Spider
01-26-2011, 10:46 PM
How do you intend to pay this $300,000 back?

vangogh
01-26-2011, 10:51 PM
Welcome to the forum Bill. I went ahead and deleted the other thread. I think it does make more sense to have it here.

I can't really speak for the banks who'd be giving you the loan, but it sounds like you have good credit and some collateral. The big question the banks will want to know is the one Frederick asked. How will you pay back the money you borrow. I assume you plan to run the golf course/ice cream stand for a profit. The bank will likely want to see a business plan showing how you'll make that money and reasonable projections for how soon you'll be able to pay them back.

Assuming the plan is good I'm not sure why they'd say no, but again I'm not the bank.

billbenson
01-26-2011, 10:57 PM
Not an answer to your finance question, but how do you plan on making money with a miniature golf course? I worked in one years ago in college in Phoenix. There is one I drive by frequently where I live now in Florida. Both places have a longer season than most parts of the country. I don't see a minature golf course being successful without multiple revenue streams ie pizza or something more cleaver.

Bill
01-27-2011, 06:18 AM
At $6 a person, figure 20 people an hour, 10 hours a day, 7 days a week, four weeks a month, for 6 months = $201,600 for one season. I'm told 20 people an hour is a low estimate, but I'd rather figure low and be prepared for the worst. Now lets subtract one whole month of rain and you've made $168,000...still not too shabby. Throw in some expenses...insurance, taxes, electricity, water, a little part time help, etc, and now, at worst, the golf course alone has made around $100,000 for the season. As I said, I'll be retired and drawing a pension from the state, so I don't need to take any money for myself. Meaning, I could use this $100,000 a season profit to pay off the loan. If all goes accordingly, this could easily be paid back within 3 years. And we haven't even talked about money made selling the concessions. With miniature golf, once it's paid for, the only money required is upkeep. Meaning after the first few years, I'd deduct some to maintain any moving parts, landscaping etc, and rest is profit. Thoughts?

vangogh
01-27-2011, 10:30 AM
Bill I think you just need to put all that information in a business plan and take it to the bank. Again I'm not the bank, but based on the little we know it sounds like you'd be a good candidate for a loan.

Out of curiosity are you looking to buy an existing course or are you looking to build a new one?

Harold Mansfield
01-27-2011, 11:20 AM
To answer your question about how to find out what simular businesses are making. You could do a county tax records search. Those should be public record and online depending how large of an area you live in. If not you may have to go and look them up manually.

Those should give you the exact amount that those businesses pay in sales, and property taxes ( those may be in 2 file cabinets). From that you should be able to figure out a rough estimate of at least the income that they are reporting.

You can also find out information about the land..who owns it, mortgage (if any) payments, value, and so on.

It can also be a way to find out if they are having any difficulties, behind on tax payments, liens, pending litigation, etc.
You would be amazed what is public record.

ChrisHeggem
01-27-2011, 12:28 PM
Have you spoken to any owners of mini golf courses in places with similar climate to get an estimate of gross? If it rains or snows where you are, those are usually slow days. Just some food for thought.

billbenson
01-27-2011, 01:28 PM
At $6 a person, figure 20 people an hour, 10 hours a day, 7 days a week, four weeks a month, for 6 months = $201,600 for one season. I'm told 20 people an hour is a low estimate, but I'd rather figure low and be prepared for the worst. Now lets subtract one whole month of rain and you've made $168,000...still not too shabby. Throw in some expenses...insurance, taxes, electricity, water, a little part time help, etc, and now, at worst, the golf course alone has made around $100,000 for the season. As I said, I'll be retired and drawing a pension from the state, so I don't need to take any money for myself. Meaning, I could use this $100,000 a season profit to pay off the loan. If all goes accordingly, this could easily be paid back within 3 years. And we haven't even talked about money made selling the concessions. With miniature golf, once it's paid for, the only money required is upkeep. Meaning after the first few years, I'd deduct some to maintain any moving parts, landscaping etc, and rest is profit. Thoughts?

I'd really suggest you verify that traffic somehow. While there were hours that had 20 people come through or more. it was very spotty when I worked in one. I'm not saying its not accurate, but I'd really want to verify that those numbers of customers are realistic. I will say this. The one near me today has a good location and has been in business for quite a few years including todays economy so maybe your numbers are good?

Harold Mansfield
01-27-2011, 01:50 PM
At $6 a person, figure 20 people an hour, 10 hours a day, 7 days a week, four weeks a month, for 6 months = $201,600 for one season. I'm told 20 people an hour is a low estimate, but I'd rather figure low and be prepared for the worst.

I don't know too many businesses outside of fast food that can count on a consistent number like that for the course of an entire year. Especially one that operates outside and subject to weather conditions.
I could be wrong. There is a miniature golf place near me and while they have been in business as long as I remember, it still caters to kids and families. If you ride by on the weekends and it's not 100 degrees outside (which is most of the summer) , it's busy. If you ride by there now. It's probably dead.

Considering that most adults work all day and kids are in school during the week, I can't see that kind of traffic anytime except summers and week ends when the weather is nice.
Where do they get the numbers of people without day jobs and kids that don't have school that are frequenting this type of business 7 days a week for 10 hours a day all year long?

And even if you cater to the after school crowd, (and considering that most parents are working until 5pm) how many kids have $6 a day, and what age group of kids both have $6 and are old enough to go to miniature gold place by themselves? And, for how long can you hold their attention? At what age does miniature golf loose it's appeal with kids? Will you be basically limited to kids who are both old enough to be there alone (during the week), yet still find miniature gold entertaining? Seems like a small window of around 12-13 year olds.

So seriously, say you open at 10 a.m. everyday. Who is there until school lets out at 3 p.m.? Adults on their day off? Possible. Will there be beer?

I'm not trying to be a dream crusher, I just see some flaws in the numbers and if you present those estimates to a banker or loan officer, I'm sure they will have simular questions.

Spider
01-27-2011, 02:40 PM
If I was contemplating buying or building such a business, I would anticipate that actual traffic would amount to no more than 25% of capacity. In any business, there will be busy periods and slow periods. Slow and busy hours of the day, slow and busy days of the week, slow and busy weeks of the month and slow and busy months of the year. If I was to work on 200 people a day passing through my establishment, the facility would have to be capable of handling 600 people at any one time.

I've never seen a full 18-hole golf course with 600 golfers any one time.

I suggest you get a job at an existing minature golf course and do you own on-site study of attendance, logistics and traffic patterns before spending on money on this plan. Once verified, it sounds like it could be a real moneymaker, but these figures do need to be verified.

vangogh
01-27-2011, 04:41 PM
Being conservative in your estimates is a good idea. Better than being too optimistic, especially early on.

One thing you often see with miniature golf courses are batting cages. Still mainly a summer and weekend thing, but it might help bring in more customers. I'm not sure how much the cages cost to buy and maintain, but they're often popular and can even be set up inside, though at a greater cost I imagine. It might be something to look into. Another thought is to add something of a family restaurant/arcade inside for the bad weather. Odds are the kids will want to eat there often enough and I would think many families would sit down for a bite after a day of golf. Again more cost and maybe more than you want to do.

Where I used to live a course opened that was associated with Jack Nicklaus. I forget whether he was active in the design or just lent his name to it. The course was designed less with the typical windmill and more as what you might find on a real putting green. There was still some of the usual mini golf stuff like hit the ball into a hole one level and have it roll down to the next level and there would obstacles to hit around and bank the ball off. It was more natural stone than typical windmill though.

Again still mainly a summer and weekend thing, but the course was always packed. I can't remember a time we went where we didn't have to wait some for the people head of us or keeping the people behind us waiting. There was also had a driving range which was usually full more year round. I'm sure part of their success was the Jack Nicklaus name, but the course itself was definitely an attraction. A lot more adults would be seen playing in addition to the kids.

jamesray50
01-27-2011, 07:49 PM
What part of the country are you planning this? I think in my part of the country the only place there are minitature golf courses are at amusement parks or state parks. I think it would be nice to have one, but don't really know how much traffic it would get.

Bill
01-30-2011, 07:17 PM
Hey all...sorry it took so long to get back with some answers, but I've been away for the past few days.

With regards to the "20 an hour" average, again, it's an average. I'm using this based on numbers provided by some other miniature golf courses, and the 20/hr is considered low. In my area, upstate NY, it's more of a 6 month business. At any time (meaning off hours) you can drive by the two in a neighboring town, again this is summer time, and see 8-10 people playing. From mid-afternoon on (especially after dinner), it's easy to see 40-50 people there. My plan is to spend some time at these places (perhaps even work a little part time on days off from my current job), and get a better count, and get an idea of their finances. The two north of me have been in a business a LONG time, and seem to do very well. Where I'm looking to build is south of me (40 miles between), with more of a city population, there are currently NONE. I don't believe the population numbers take in to account the colleges, which run strong all summer long.

I like the idea of checking the county records. I had already thought of that, but hadn't thought of looking into taxes...thanks. My plan was to look into maps and find out exactly how much land each of these places have, and use this information to get a better idea of the size of the piece of land I want to buy. I plan to buy a little bigger than needed, as I've also considered the batting cages. I've looked into those already, and a decent set up, for 4 cages, will cost around 80k. It's probably something I'd add after putting a major dent in the initial loan. The ice cream end of it I want right away. The two (miniature golf and ice cream), seem to go hand in hand. Stopping in for one can often entice you into the other.

I've already warned the wife/kids that some of our summer excursions will center around visiting miniature golf courses that the company I'm looking into has built. I've located about 5 all within a 3 hour drive. The establishments far enough away I may even often spend a little money for a "consultant fee" and pick the brain of the current owner. What did he like about the company, what does he wish he had done different, would he even use the same company again, etc....

Keep the thoughts and caveats coming friends!

Harold Mansfield
01-31-2011, 10:32 AM
Sounds like you are prepared to do the necessary investigation to make sure that you have as much covered as possible. That is a really good sign. Most people just want to get the money and go. I think that as you investigate further, you will probably unearth some additional ideas to generate additional income from it, maybe even some ideas for the off season like some sort of Christmas or holiday tie in.

vangogh
01-31-2011, 11:05 AM
It's been sounding to me like you're prepared for most things too. I think you should get your plan down on paper and then talk to the bank or the SBA. If they don't give you a loan you can always ask why and then work to overcome those objections before reapplying again.

By the way where in upstate NY are you? I'm originally from NY and spent my college years in various parts of the state. Good chance I know your town and maybe have even been there.

huggytree
02-01-2011, 10:58 AM
At $6 a person, figure 20 people an hour, 10 hours a day, 7 days a week, four weeks a month, for 6 months = $201,600 for one season. I'm told 20 people an hour is a low estimate, but I'd rather figure low and be prepared for the worst. Now lets subtract one whole month of rain and you've made $168,000...still not too shabby. Throw in some expenses...insurance, taxes, electricity, water, a little part time help, etc, and now, at worst, the golf course alone has made around $100,000 for the season. As I said, I'll be retired and drawing a pension from the state, so I don't need to take any money for myself. Meaning, I could use this $100,000 a season profit to pay off the loan. If all goes accordingly, this could easily be paid back within 3 years. And we haven't even talked about money made selling the concessions. With miniature golf, once it's paid for, the only money required is upkeep. Meaning after the first few years, I'd deduct some to maintain any moving parts, landscaping etc, and rest is profit. Thoughts?


i drive past a few mini golf places...dont think ive ever seen more than 3-4 cars in the parking lot other than weekends when people want the driving range (i assume you'll have a driving range).....i think your off as far as how many people will come....your forgetting about weather too....ill bet your income will be 1/2 of what you think....at first it will probably be 1/4-1/10th.....

it may take you the rest of your life to pay off that loan....im a big believer in having fewer customers at a high dollar amount...the miniature golf idea is the opposite...invest $300k and get it paid back $2 per person........it takes alot of work to get the amount of customers needed to keep it going....dont forget about upkeep...every 2-3 years you may have to update and redo the course....plus lawnmowing.....broken/stolen clubs and balls.....

it reminds me of a customer i had....he spent $200k to redo an old building and $80k for an icecream machine....he owns an ice cream shop and gets his $280k investment back $.50 cents per cone...ive never seen more than 1-3 cars in his lot....i predicted failure from the start....its a hard business to be in because that icecream machine is so expensive and you can only sell those cones for $2-3 each.....

Id rather sell (5) $100,000 products a year than 500,000 $1 products a year......

you may lose $ the first year...or 2.....make sure you have funds set aside to manage that....

I dont think you have a bad idea for retirement, i just think you need to find a way to do it for less than $300k....id keep it at $60k and see how you can do it



can you find an existing course and buy it/remodel it? ill bet that would be a smarter way to start...

vangogh
02-01-2011, 11:27 AM
We all agree, min-golf courses aren't packed daily and year round. Who cares? There are a lot of businesses that operate similarly. Movie theaters and restaurants are two that come to mind that aren't full to capacity daily. Both make the majority of their money over the weekend. There are plenty of seasonal businesses as well, some that make nearly all of their money between Thanksgiving and Christmas and not much the rest of the year. Most retail businesses pull in a large portion of their yearly revenue during the holiday season.

I don't think the success of a mini-golf course is based on how many people are on the course on a Tuesday afternoon in January.

ruth
02-08-2011, 03:48 PM
I would only do that if I could afford to locate the golf course in a prime location such as a huge mall or movie theatre complex which would guarantee a lot of traffic. But prime location means more initial cost and monthly repayment.

As a retired person, I would not want to risk my life savings in a risky business that could fail because you will not be able to recover any losses you might suffer once you have retired. I would advise investing in rental properties in a good area. You could start NOW because of the cheap real estate prices.

CloptonCapital
03-21-2011, 05:17 PM
It sounds like what you are looking for is just a commercial mortgage. I personally wouldn't suggest using that 60-70k to secure the loan though. There is no need to take on more exposure than you have to.

scottmcconnell71
08-04-2011, 06:11 PM
Also take into consideration the location of your course. Mini-golf is huge in beach/tourist towns such as Myrtle Beach, but those are large elaborate courses that would be expensive to build/maintain. I'm sure they make good money though. Mini-golf seems to be very family oriented.