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PR53-09 Tyandaga Municipal Golf Course APPENDIX B Preferred Practice Facility/Learning Academy Business Plan

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Tyandaga Municipal Golf Course

Tyandaga Practice Facility & Learning Academy

Business Plan

August 2009

Prepared By:

Industry Consultant: Grant Fraser, M.Ed., M.B.A. President Golf Management Institute of Canada Glen Abbey Golf Club 1333 Dorval Drive Oakville, ON L6J 4Z


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Introduction The purpose of this engagement is to provide a business plan document for the Tyandaga Practice Facility/Learning Academy that includes the following: 1. Goals & Objectives of the Practice Facility 2. Construction Details – Guidelines, Specifications and Costs 3. Equipment Requirements and Costs 4. Best practices Review of comparable facilities within the local golf market area 5. 3-Year operating plan outlining sources of revenue and associated expenses 6. Staffing structure and HR costs 7. Preliminary Marketing Plan 1. Goals and Objectives of the Practice Facility The objective of constructing a practice facility at Tyandaga is threefold. The first objective is to introduce the game of golf to beginners of all ages. The second objective is to provide an opportunity for golfers in the area to improve their game at a quality facility that offers a variety of lesson and clinic packages. The third objective is to increase the golf course’s existing customer base and increase the annual number of rounds played at Tyandaga. 2. Construction Details – Guidelines, Specifications and Costs Construction of a Practice Facility/Learning Academy at Tyandaga In order to attract a broader market to the golf course and develop new revenue streams, Tyandaga recognizes that it must develop a practice facility/learning academy. This enhancement will enable the golf course to re-establish novice and junior golf programs and introduce new programs specifically designed for beginners and women. Recent golf industry statistics support the future growth in these segments of the market. In addition, research indicates that other municipal golf courses (e.g. City of Kitchener’s Doon Golf Course, City of Mississauga’s Braeben Golf Course, City of Hamilton’s Chedoke Golf Courses) are investing in this type of facility.

Tyandaga’s Current Situation - Location of a Practice Facility There is no feasible area within the existing land base to locate a practice facility without drastically changing the layout or length of the golf course. It has been determined that the practice facility can be located on the land abutting the 16th hole which will be leased from the Roman Catholic Diocese. The property is located approximately 250 m from the existing Clubhouse and is accessible by a paved roadway. The following photograph shows a proposed layout. The length of the proposed Golf Practice Facility area is 284 yards and would require netting on the west side of the property to ensure the safety of golfers on the 16th hole.


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Practice Facility/Learning Academy as part of Tyandaga Municipal Golf Course


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Practice Facility Guidelines and Specifications: i) Property Requirements: The following are approximate property dimensions and acreage requirements of a single level practice facility suitable for Tyandaga. The ideal amount of land required for a practice facility is 10 acres or more. Tyandaga’s total practice facility area is 7.5 acres comprised of 6 acres for the hitting area and 1.5 acres for the short game area.

Length (Yards) Width (Yards) Tees # Total Acres Netting Requirements265 100 25 5.5 High 280 125 31 7.2 High 295 150 38 9.1 Medium 310 175 44 11.2 Medium

Typical driving ranges will vary in size from 15 tee stations up to 150 tee stations. Regardless of the width, a range measuring 275 yards or greater is ideal. Shorter driving ranges (220-240 yards) require the added protection of barrier netting and in many cases, implement the use of a limited distance flight golf ball. The width of a driving range is a direct correlation between the number of tee stations required. The total number of hitting stations is estimated by dividing the parcel width by 12. This will allow for a tee line that is concave and has hitting stations with a width of 8 to 10 feet. Having a concave tee line helps to increase the safety of the area and positions every tee station toward the centre of the range. By concentrating balls toward the centre of the property, ball retrieval operations become more efficient. Ideally, the tee line will face either north or south. This will keep the early morning and early evening sun at a minimum. ii) Tee Specifications and Dimensions: Grass tees and artificial tees should both be used. As a general rule, better players prefer grass tees while novices tend to prefer mats. A compacted limestone screenings base is a widely used material in artificial tee construction because of its uniform surface and ease of maintenance. The dimensions for artificial tee stations should be:

Tee Width: 8 to 10 feet Tee Length: 7 to 10 feet Recommended dimension is 10’ x 10”

The dimensions for grass tee stations should be:

Tee Width: 10 to 12 feet Tee Length: at least 60 feet

The dimensions for each grass tee station are greater than the artificial tees due to the need to constantly rotate the teeing area. By providing a minimum depth of 85 feet, the operator, using a daily rotation schedule, should be able to give each area 21 days to recover. A basic rule of thumb is that you can never have too much grass area, only too little.


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Estimated Practice Facility Construction Costs

Location of proposed Practice Facility on leased land adjacent to 16th hole owned by the Roman Catholic Diocese. (Tee deck area dimensions – 85 yards x 31 yards, 26 hitting stations)

Revised Report (Aug)

Layout / Clearing/ Topsoil / Land Grading / Shaping $128,500 Construction – Range Main Tee Area $ 38,000 Target Greens (5) $ 15,000 Range Area Seeding and Sodding $ 12,000 Short Game Practice Area $ 36,000 Practice Putting Green and Practice Bunker Area $ 28,000 Cart Path & Roads $ 19,000 Safety/Barrier Netting (16th fairway and Maintenance Bldg ) $ 79,000* Practice Facility Equipment Cost (26 stations) $ 42,000 Video Analysis Equipment + teaching aids $ 5,000 Design Fees ( incl. $3,000 for Project Management ) $ 20,000 Sub-Total Contingency (10%) TOTAL COST GST not included

$422,500 $ 42,250 $464,750

*Barrier netting is required given the size of the land parcel (less than 10 acres) and its proximity to the golf course and existing maintenance building. Given Tyandaga’s barrier netting requirements, the cost to install 60' wooden poles and 50' barrier netting is $79,000. This price is subject to change if steel/metal poles are used, the heights of the poles increase, there are any access limitations or site restorations needed due to less than ideal soil conditions, or if the price of materials changes at the time of installation. Design:

60’ and 30’ wooden poles to extend 273 yards down side of 16th fairway 30’ wooden poles to extend 60 yards down side of Maintenance Building yard No barrier netting required along back of driving area. Normal distance flight

golf balls to be used A new Short Game practice area with putting green and practice bunker area

will be constructed Irrigation cost included in Practice Range costs

NOTE - These cost estimates are different from those previously provided in the May 2008 Interim Report due to additional construction costs for a proper teeing area, the clearing, grading, seeding and sodding of the land, the extension of barrier netting down the 16th fairway and maintenance building area, the addition of 5 target greens, the


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construction of a new short game area, practice putting green, practice bunker area, and increase in contingency costs.

Estimated Total Costs to Develop Practice Facility - $465,000 + GST 3. Equipment Requirements and Costs i) Turf Equipment: The following is the equipment required to properly operate a practice facility:

1 3 or 5 Gang Unit Reel Mower 1 Triplex Reel Mower 1 Deck Rotary 1 Push Mower 1 String Trimmer 1 Tractor

All turf equipment required to operate the practice facility is owned by the golf course ii) Practice Facility Equipment: The following is a list of the major equipment items a practice facility requires:

Golf Balls – 35 dozen per tee station. Life expectancy is 2 years. Mats – 5’ x 5’ or 4’ x 6’ in size. Cost $400-$700 per mat. Ball Picker – A 3-gang ball picker with a pyramid line. Ball washer – The most important feature is the rate at which balls can be washed.

6 to 8 balls per second is recommended. Baskets Ball dispenser* Tee Dividers Yardage markers/flags

*Operating Procedures – Ball Dispenser: Most practice facilities rent balls to their customers on a per basket basis (small, large and jumbo are the sizes used in the financial analysis section of this report). Buckets will be purchased directly from the pro shop. Range balls will be dispensed to the customer at the range via an automated ball dispenser. This more modern approach dispenses balls in the desired bucket size after receiving a code from the pro shop that is then keyed into the ball dispenser. This last option has been utilized in the costing estimates.


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Practice Facility Equipment Costs (2009 Dollars)

ITEM EST. QTY EST. COST Turf Master Octagon Mats (58” x 58”) 26 $12,220.00Magnum Scrub-Pro Ball Washer (375 balls) 1 $3,120.00Super Tee King 10K Ball Dispenser with e-range Version 8 PIN system

1 $11,650.00

Flags & Poles 10 each $400.003 Gang Ball Hawk LT Ball Picker 1 $4,100.00Golf Cart Protector 1 $315.00Range Mat Dividers (portable) 25 $3,712.50Baskets – Sm, Lg, X-Lg 100 $1,795.00Golf Range Balls (35 dozen/station) 10,920 $5,460.00Bag Stands 13 $832.00 Total Cost (Estimate)

$43,604.50

Tractors, transportation, mowing equipment, turf management sprayer, fertilizer spreader, aerifier, etc. utility run-about and large storage ball hoppers are currently available at Tyandaga. The practice facility will require a small portable structure (tent) that will house part-time staff to administer the program. iii) Barrier Netting: Barrier netting is often used when the total land area is less than 10 acres. Netting is hung between poles spaced evenly apart. The left side netting area is 273 yards long, comprised of 50 and 25 foot sections. The right side netting area is 60 yards long comprised of a 25 foot section. To accommodate 50’ barrier netting, 60’wooden poles are required. To accommodate 25’ barrier netting, 30 foot poles are required. Poles should be placed ¼ to 1/3 of the total pole height into the ground and be placed apart every 50 feet to prevent the netting from sagging and to reduce the weight load on each support pole. The netting is made into individual panels with a 3/8" rope border. Prices are subject to change if the heights of the poles increase or if there are any access limitations or site restorations needed due to less-than-ideal soil conditions. iv) Other Practice Facility Amenities:

a) Practice Putting Green – The cost to build a 3,000 sq. ft. practice putting green will be $24,000. b) Bunker Area - A 915 sq. foot sand practice bunker will be constructed to allow players to work on short and long sand shots. It will be located beside one of the short game practice area greens, allowing golfers to practice green-side bunker shots. Construction cost = $4,000.


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4. Best Practices Review of Comparable Facilities As part of this study, several practice facilities were visited in the market area to better understand the best operating practices of comparable businesses. The practice facilities visited were:

i) Wedgewood Golf Centre (QEW and Hwy 6) – Stand alone practice facility • Approximately 300 yards in length • Pie shaped property • 225-240 yards of barrier netting along west side of property • Small putting green available • 9 covered hitting stations (artificial mats) • Purchase buckets directly from pro shop, no dispenser • Approximately 30 artificial mats and 20 natural grass hitting areas • No target greens • Private lessons and clinics from certified member of CGTF • Daily specials on range balls

ii) Rock Chapel Golf Centre (Hwy 6 and Hwy 5) – Stand alone practice facility • 9-hole executive course • Driving Range • 18-hole bent grass putting course • Driving range 300 yards + • Target greens • 35 artificial mats – wood barriers 9 feet apart • grass hitting areas • Grass hitting area available for members only – 50 yards wide • Putting green and chipping green in close proximity to both artificial and natural

grass hitting areas • Buckets sold in shop, no dispenser • Memberships available for range • Daily specials on range balls • Private lessons and Junior golf camps from Class A CPGA member

iii) Within Range Golf Centre (Dundas and Hwy 5) – Stand alone practice facility • Semicircle layout • Not long – 245 to 265 yards • Hitting area 1 – grass with 28 stations (100 yards long, 25 yards deep) • Hitting area 2 – 28 artificial mats – 12 feet between each hitting station (divider to

divider) • Hitting area 3 – artificial and natural grass hitting areas (75 yards long, 40 yards

deep) • Range memberships available • putting/chipping greens • Adult/Senior/Junior rates • Automated ball dispenser used • Lessons, Clinics and summer golf camps from CPGA member


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In addition, several golf courses with excellent practice facilities were reviewed as part of the best practice research. They include the Glen Abbey Golf Club, Hidden Lake Golf & CC, Piper’s Heath Golf Club, Dragon’s Fire Golf Club and Braeben Golf Course in Mississauga. Summary of Best Practice Research In all cases, the best practice facilities (stand alone and golf course with practice facility) provided the following services and amenities:

• Well maintained and manicured practice area • Adequate distance – width and length - for use of all clubs (driver to wedge) • Quality golf balls (clean and new) • Adequate number of golf balls • Use of high capacity ball dispenser • Quality hitting stations – grass and artificial turf • Safety between hitting stations • Safety between golf course and practice facility • Practice putting area in close proximity to hitting area • Practice short game area in close proximity to hitting area • Multiple target areas • Accurate distances to target areas • Variety of lesson and clinic packages taught by qualified golf professionals • Junior Golf Camps • Teaching aids and computer equipment for swing analysis • On site directional signage to practice facility • Practice facility memberships • Daily, weekly and monthly bucket specials, twilight rates and creative marketing

programs • Cross promotions between golf course and practice facility • Promotional signage visible from street • Marketing and promotion of product and amenities to public


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5. Three-Year Operating Plan - Sources of Revenue and Expenses For the purposes of this report, it has been assumed that the practice facility will be managed and operated by the City of Burlington. Revenue and expenditure calculations have been based on costs provided by the City. A more detailed breakdown of the Assumptions are contained in Appendix B-1 and the Pro-Forma Income Statement (2010-2012) in Appendix B-2. Tyandaga Estimated Practice Facility Revenue i) Range Ball Sales Recommended basket sizes: Small – 50 balls Large – 90 balls Jumbo – 120 balls Pricing: Small basket - $5 Large basket - $9 Jumbo basket - $12

Average rate per bucket $8.00 Number of Tee Decks 26 Number of hours in operation 10 Number of days in operation 107 - Yr. 1

(July 1 – Oct. 15) 182 - Yr. 2 (April 15 – Oct.15) 182 - Yr. 3 (April 15 – Oct.15)

Capacity 10% - Year 1 15% - Year 2 20% - Year 3

Revenue (Range balls only) Year 1 - $22,256 Year 2 - $56,784 Year 3 - $75,712

Note – This figure does not include lesson or clinic revenue.


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ii) Lesson and Clinic Revenues: It is estimated that with a practice facility complete with the aforementioned amenities, Tyandaga can expect to generate additional gross revenues of $65,567 in Year 1, $88,910 in Year 2, and $112,254 in Year 3 from lessons, clinics and golf camps. This figure is based on a five month season and was calculated as follows: Group Clinics (based on current Tyandaga rates):

• Six, 4-Week Golf Clinics (8 students per clinic) at $99.00 per student – Revenues $4,752 Year 1, $7,128 Year 2, and $9,504 Year 3

• Golf Lesson Packages, Private and Semi Private – Revenues $23,055 Year 1, $34,582 Year 2, $46,110 year 3

• Day camps with 9 holes of golf, lunch and instruction at $295/student – Revenues $37,760 Year 1, $47,200 Year 2, $56,640 Year 3

Estimated Total Revenues Year 1 - $87,823 Year 2 - $145,694 Year 3 - $187,966

Tyandaga Estimated Practice Facility Expenses i) Lesson and Clinic Expenses: Total expenses directly related to practice facility teaching and instruction vary depending on how many instructors are hired. Estimated cost to hire one seasonal full- time teaching professional/instructor and four junior instructors (junior camps) is: Year 1 - $20,364 Year 2 - $27,264 Year 3 - $34,167 ii) Operating Expenses: Total expenses directly related to the seasonal operation of the practice facility (practice facility labour - operations + maintenance) would be $8,923 in Year 1, $13,785 in Year 2 and $14,198 in Year 3. This figure is based on hiring one individual to oversee the operation of the facility throughout the season and 10-12 maintenance hours per week to ensure the tee deck and hitting stations remain in proper condition. Total Operating Expenditures - Total expenses directly related to the seasonal operation of the practice facility and providing instruction would be $36,972 in Year 1, $58,345 in Year 2 and $67,060 in Year 3. This figure is based on the following:

• Hiring one seasonal full time teaching professional/instructor • Hiring four junior instructors


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• Hiring one individual to oversee the operation of the practice facility throughout the season

• Ten-twelve maintenance hours per week to ensure the tee deck and hitting stations remain in proper condition

• Practice facility maintenance supplies • Practice facility equipment replacement • Instructional Supplies • Marketing and Advertising

Estimated Total Operating Expenses Year 1 - $36,972 Year 2 - $58,345 Year 3 - $67,060

Practice Facility Summary Table

Capital Expenditures

Practice Facility Revenues*

Total Operating Expenditures

Practice Facility Net Revenue

After Debt Service $465,000 Year 1 - $87,823

Year 2 - $145,694 Year 3 - $187,966

Year 1 - $36,972 Year 2 - $58,345 Year 3 - $67,060

Year 1 - $4,551 Year 2 - $41,049 Year 3 - $74,606

*Includes all practice facility sales including revenues from golf balls, lessons, clinics and programs.


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Pay Back Period Based on the total estimated cost of $465,000 and 3-year pro forma financial statements, the discounted payback period for the new Tyandaga practice facility is 7.1 years.

Capital Expenditures

Practice Facility

Revenues

Total Operating

Expenditures

Debt Service*

Practice Facility

Net Revenue

Pay Back

Period (Yrs)

$465,000 Year 1 – $87,823 Year 2 - $145,694

Year 3 - $187,966

Year 1 - $36,972 Year 2 - $58,345 Year 3 - $67,060

$46,300 (Year 1-3)

Year 1 - $4,551

Year 2 - $41,049 Year 3 - $74,606

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* Debt service was calculated at 5.5% amortized over 15 years 6. Staffing Structure and HR Costs Total staffing directly related to the seasonal operation of the practice facility and providing instruction include:

• One seasonal full time teaching professional/instructor • Four junior instructors dedicated to running the summer junior golf camps • One individual to oversee the operation of the facility throughout the season • 10-12 maintenance hours per week to ensure the tee deck and hitting stations

remain in proper condition. Total HR costs directly related to the seasonal operation of the practice facility and providing instruction would be: Year 1 - $29,287 Year 2 - $41,049 Year 3 - $48,365


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7. Preliminary Marketing Plan Tyandaga will have to embark on an aggressive marketing campaign in order to create awareness of its new practice facility among the golfing public. This can be accomplished in a variety of ways including:

• Newspaper advertising (Burlington Post, Oakville Beaver, etc.) • Advertising in selected golf magazines • Developing a dedicated Tyandaga website • Building a Tyandaga customer database • Regular distribution of media releases to golf and non golf media • Billboards and Proper Signage • Media days • Golf Demo Days for Community with Club Manufacturers • Practice Facility promotions and specials (e.g. 2 for 1 buckets) • Membership Packages for Practice Facility only • Cross Promotion with golf course (e.g. regular green fee, free bucket of balls)

Advertising expenditures typically account for 3-5% of total gross revenues. The practice facility’s contribution to Tyandaga’s overall marketing budget required to promote the “New and Improved Tyandaga Golf Course and Practice Facility” would be $2,635 in Year 1, $4,371 in Year 2 and $5,639 in Year 3.

PR53-09 Tyandaga Municipal Golf Course APPENDIX B-1 Preferred Practice Facility/Learning Academy Business Plan

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Tyandaga Practice Facility – List of Assumptions

Revenues:

1. Range ball sales – capacity rates for years 1-3 take into account weather conditions.

2. Golf clinics and lesson revenues – due to popularity and demand, revenues will increase by 50% in the second year and 100% in the 3rd year. This assumes that lesson and clinics will be marketed and promoted to the community.

3. Golf Camps – due to popularity and demand, revenues will increase 25% in the second year and 50% in the 3rd year. This assumes that lesson and clinics will be marketed and promoted to the community.

Expenses:

1. Teaching Pro (Clinics and lessons) – to accommodate increased demand, teaching expenses will increase by 50% in the second year and 100% in the 3rd year.

2. Seasonal Instruction (Golf Camps) – to accommodate increased demand, teaching expenses will increase by 25% in the second year and 50% in the 3rd year.

3. Practice facility labour (maintenance) – full season expense based on 10-12 hours per week x $14.75/hr (city rate) x 24 weeks. The first year is based on 10-12 hours per week x $14.75/hr (city rate) x 24 weeks. The first year is based on 16 weeks. Labour costs were increased by 3% in years 2 and 3.

4. Practice facility labour (operations) – full season expense based on 35 hours per week x $11.72/hr (city rate) x 24 weeks. The first year is based on 16 weeks. Labour costs were increased by 3% in years 2 and 3.

5. Maintenance materials – full season material costs are forecasted to be $1000 for fertilizer, $1000 for soil and $500 for seed. This amount was reduced by 50% in year 1 due to the shortened season.

6. Equipment replacement - $0 in year 1. $6000 in year 2 and 3 to replenish range ball supply ($5,500) and miscellaneous equipment.

7. Marketing and advertising – 3% of gross practice facility sales.

PR53-09 Tyandaga Municipal Golf Course APPENDIX B-2 Preferred Practice Facility/Learning Academy Business Plan

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Pro Forma Income Statement

OPERATING REVENUES 2010 2011 2012

Range Balls $22,256 $56,784 $75,712Golf Clinics $4,752 $7,128 $9,504Golf Lessons $23,055 $34,582 $46,110Golf Camps $37,760 $47,200 $56,640

TOTAL OPERATING REVENUES $87,823 $145,694 $187,966

OPERATING EXPENSES

Staffing - Teaching Professional $7,238 $10,857 $14,478Staffing - Seasonal Instructors $13,126 $16,407 $19,689Practice Facility Labour (Operations) $6,563 $10,139 $10,443Practice Facility Labour (Maintenance) $2,360 $3,646 $3,755Maintenance and Leasing $5050 $6425 $6556

$6,000 Practice Facility Equipment Replacement $0 $6,000Instructional Supplies $0 $500 $500 Marketing & Advertising $2,635 $4,371 $5,639

TOTAL OPERATING EXPENSES $36,972 $58,345 $67,060

NET INCOME BEFORE DEBT SERVICE $50,851 $87,349 $120,906

DEBT REPAYMENT (5.5%, 15 YR. AM) $46,300 $46,300 $46,300

NET INCOME AFTER DEBT SERVICE $4,551 $41,049 $74,606

Tyandaga Practice Facility & Learning Academy

2010- 2012

Tyandaga Municipal Golf Course Tyandaga Practice Facility ... › uploads › 20639 › doc... · In order to attract a broader market to the golf course and develop new revenue streams,

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