Winter is near for those in the northern hemisphere, and I wanted to give a complete guide to a side hustle that I ran for 3 years. This produced great cash flow for me during the winter months.
Golf Simulator Business
If you remember, I wrote about the $300K Side Hustle I Started With $500 about a month ago. I was buying and selling pre-owned golf clubs. I eventually rented a warehouse to run that operation out of. The golf club reselling business is very seasonal and the winter months were slow. So, I had unused warehouse space during those months. I decided to fill that space with golf simulators and rent out the time.
You can generate $25K-$30K of profit during the winter months from renting time to use these golf simulators.
Here is the complete guide on how I did it:
The Simulator Setup:
This business model has become somewhat popular in areas that golf is not possible due to the cold or snow. However, most of these simulator businesses are wrapped into a bar or restaurant (and the build-out can cost $500k-$1M+). I built simulator bays in a warehouse without a giant build-out cost, so I was able to rent simulator time for half the price of my competitors.
Each Bay Should Cost You $4k-$5k To Setup
I had a lot of trial and error, so to setup 3 bays it cost me about $20K, but you can learn from my mistakes and save yourself a lot of money.
You will need the following for each bay:
- A Simulator/Launch Monitor Unit
- Golf Course Simulator Software
- Impact Screen (and a way to hang it)
- Hitting Mat
To start out, I opted to go with the SkyTrak unit as my simulator/launch monitor. There are pros and cons to this unit. It is the best bang for your dollar. However, it can be a little finicky and not the best user experience. I used the Skytrak units for 3 years before selling the business (the person that bought the business upgraded to overhead units that cost about $8k per unit).
You can get what you need from Skytrak for about $2K per simulator. You will need the game improvement package and I recommend getting the protective case.
Golf Course Simulation Software:
SkyTrak has a few third-party apps that run golf course simulation. I opted to go with e6 Golf by TruGolf – http://www.skytrakgolf.com/simulation/trugolf
I have been very happy with this software (however, their customer service is not great). I have had other people in the industry say the same about this software. I bought the basic package for $299/year, which gave me 12-15 well-known golf courses (such as: Bethpage Black, Pinehurst #2, Harbor Town, Bay Hill, Torrey Pines, and more)
You must buy a short-throw projector. I did not realize that at first and purchased projectors that would not work for this setup. It must be a short-throw projector.
Ideally, you will hang the projector right above where the person is swinging (while this seems to be a dangerous spot, it turns out no one actually swings a golf club directly above their head).
The projector is mounted about 8-10 feet from the screen.
I found these projectors as an open box item on Amazon: https://www.amazon.com/gp/product/B00GGGQHHM/ref=od_aui_detailpages00?ie=UTF8&psc=1
I paid about $400/projector.
Finding the right impact screen cost me a lot of money. I tried screens that cost $150 and I tried screens that cost $1,000. The best screen I found ended up costing me $350. The screen is essential because you project simulated video onto the screen, and players hit golf balls into the screen. So you need a crisp, clear image on the screen, and the screen must withstand the impact of a golf ball going 150mph into it.
Here is the best screen I found: https://www.carlofet.com/shop/golf-impact-screens?aspect_ratio=16%3A10&screen_material=Preferred+Golf+Impact
Preferred Golf Impact is the material I purchased.
Hanging The Impact Screen
There are many ways to get creative here. I would say I did not find the best solution, but I found one that worked. The screen must be held relatively tight on the top, left, and right sides (the bottom hangs loose). I built a metal frame to hold the screen using EMT piping and Steel Conduit.
EMT piping can be purchased at a HomeDepot or Lowes and I purchased the conduit here: https://www.memphisnet.net/category/golf-cages-build
The issue with using a metal frame is that if a golf ball hits the frame, it ricochets and can cause damage to the building or people in the bay. I padded the steel with a foam covering. However, this was not perfect.
You will need a computer to run the golf simulator software off of. Any computer will work but I recommend upgrading the graphics card for best results. The computer is hooked up to the projector, whatever is shown on the computer screen is duplicated through the projector and onto the impact screen.
All in you should be able to get a computer and graphics card for about $500.
You will want a quality golf hitting mat. Cheap mats will tear up quickly and give a poor user experience. I purchased my mats from Reel Feel Golf Mats (http://www.realfeelgolfmats.com/). The golf mat should be big enough for someone to stand on and have the Skytrak unit sitting on the Mat (at least 4×6 but go bigger if you can).
The mats cost me about $450 each.
Simulator Bay Size:
Your ceiling height should be no lower than 10ft. This should give plenty of clearance for people’s golf swings. The room depth should be about 20 feet, and you will want it to be about 15 feet wide. This will allow multiple people to be in the bay at once safely with enough space to sit down and have one person swinging at a time.
The End Result
Because I was just golf in a warehouse, I offered my hourly rental rates much lower than my competitors. I charged $30 per hour. And I was open 7 days a week from 8am – 8pm.
Overall you should expect to have the bays utilized for 50% of the time you are open. Weekdays can be as low as 30% utilization and weekends can be about 90% utilization (as you get closer to spring, demand for the simulators will increase).
I ran 3 simulator bays from November – March (or whenever outdoor golf started again). Here is what I expect my monthly revenue numbers to be:
November – $12,000
December – $13,000
January – $15,000
February – $16,500
March – $18,500
For labor, you can choose to work it yourself or hire hourly employees. If you hire someone for $14/per and you have all the hours you are open covered, you are looking at paying about $6K per month in labor (including payroll taxes).
I had my office at the same location. So during normal business hours (8am-5pm weekdays), I did not need to hire someone to cover those hours (but out of convenience, I usually had someone come in for some of those hours).
I paid about $2500 per month for the location I operated these at (rent plus utilities). The unit was about 2500 sqft (I paid about $12/sqft). I did have a year-long lease as I used the spot for other purposes in non-winter months. It may be tough to find a location that will let you rent for 5-6 months out of the year (but if you get creative and hustle, I bet you can find something that will work).
In all, I would expect to generate about $25K in profit each winter season off of these simulator bays. Initial setup costs are about $15K. So after year 1 you have your initial setup costs paid for plus you profited some money. All the equipment should last about 3 years, then you may have to replace a screen or replace a Skytrak unit.
How I Drove Business
Groupon: This gave me an easy way to get the word out that we existed. However, I had to discount the rates pretty significantly to sell on Groupon (essentially 50% off). What I found out though was that not all Groupons that you sell get used. So for all the cash I collected through Groupon sales and the number of Groupons that were redeemed, it was only as if I was discounting by 10% or so.
Note: I am no longer sure if Groupon gives you all the cash upfront, or they now wait for the Groupon to be redeemed. If they only give you the cash for what is redeemed, Groupon may not be a good option.
Google Ads: I put up a geo-targeted Google Ad for anyone that was searching for “Golf Simulators” or “Indoor Golf” in my area.
Gift Cards: I sold gift cards for Black Friday and The Holidays. This was a tremendous source of cash for me. I would sell the Gift Cards at a discount (buy $60 worth of time for $30). I would generate thousands of dollars of sales from this offer. And like Groupon, a lot of the gift cards would go unused. This was essentially an interest-free loan for me that boosted my cash flow.
Email Marketing: For anyone to book time on the simulator, they must provide an email address. It is incredibly important keep an email list and stay in contact with them. This list will help fill your time in year 2, 3, and beyond. Always be collecting emails and keeping in touch with them.
Additional Sources of Revenue
You will have a steady flow of people in and out of the business each day. This gives you an opportunity to sell other items to this audience. You can sell snacks and drinks, you can sell golf balls and gloves, and if you get a license, you can also sell alcohol.
We also offered golf club regripping and repair services. We setup an account with GolfWorks (golfworks.com), and could have almost anything shipped to us within 2 days. However, we did stock a good baseline of grips so that we could regrip a set of clubs same day.
Did this make me rich?
Absolutely not. However, if you have the ability to setup this type of operation, you can make some decent side money throughout the winter.
Let me know if anyone tries this!