The question at the forefront of every aspiring golf sim entrepreneurs’ mind, naturally, is about risk and reward: how much will it actually cost to start a golf sim of my own, and how fast will I make my money back? A quick Google search turns up two kinds of answers: generic ranges with no clear rationale for how they were calculated, or highly specific, random costs and timelines that current owner-operators drop in Reddit threads.
The result? The lack of information makes it challenging for entrepreneurs to build a successful business plan.
In this article, I break down the real startup costs of opening a golf simulator business, with answers straight from the source: two entrepreneurs who run successful golf sim businesses, and one industry expert who's tracked golf sim economics since 2012, and built a benchmarking study to back it up.
In other words, every single number in this piece comes from someone who actually runs one of these businesses or spent more than a decade studying them. Here’s how it breaks down: what it costs once to open, what it costs to stay open, and what actually determines if any of it pays off.
CapEx versus OpEx
These are two terms worth defining, since it’s the way these experts think about and budget for their golf sim businesses.
- CapEx (short for capital expenditures): One-time costs incurred to open a business
- OpEx (short for operating expenditures): Recurring costs to keep a business open
CapEx
Reid Colson, owner of Yardstick Golf, a golf simulator research and education company and first organization to publish a golf simulator business plan, shared that he thinks about the CapEx for the industry in three different buckets: construction/electrical costs, furniture and fixtures, and golf simulator technology.
Construction, electrical, and building costs
Both Nick Notto, owner of Pin High PGH, and Brian Stenson, owner of Golf630, each said this was their biggest investment when they opened.
“I think my biggest dollar amount cost surprise was construction,” Stenson said. “It was insanely expensive to build out a 3,600 square foot retail space in my market.”
For Notto, surprise electrical work was one of his biggest costs. The outlets need to be placed properly for sims, and running extension cords across a bay is not an option.
Neither of them inherited a space that was already built for a golf simulator business, which is how most operators start out. So, if you aren’t taking over a golf sim that already has everything set up, you can expect to spend on everything from electrical work and lighting placement to permits for the build out itself.
Furniture + fixtures
Part of buildouts include furniture, seating, a kitchen if you’re offering food, and other things that make the space feel the way you want it to.
Because many of these things are “nice-to-haves” rather than “must-haves,” they’re often the first things cut if the budget gets tight. Interestingly, though, this category may have one of the biggest impacts on whether someone sticks around after their session and ultimately spends more.
Golf simulator technology
Equipment is one of the few categories where experts don’t have a specific number, because there isn’t one. From Colson’s research, sim technology and hardware can range from $5,200 to $100,000+ per bay depending on the technology.
Your decision on what kind of technology to buy should follow your business model, first and foremost. If you are primarily focused on providing an entertainment venue for novice players, graphics and game play are far more important than real swing and ball data. That’s the exact opposite of what matters most to a performance-based venue.
Add all three buckets together, and Colson roughly puts the CapEx for a 2 to 4 bay setup at $100K or more. He’s careful to call this a ballpark rather than guarantee, though, since so many factors play into a final upfront cost. Once the business gets underway, recurring expenses create an entirely different section of the budget.
OpEx
Unlike CapEx, these costs don't stop once you open the doors. They’re the recurring expenses you’ll need to cover month after month to keep the business running.
Insurance
Colson estimates that insurance can range from $3,000 - $6,000 per year for a 5 to 6 bay facility, stating that it is entirely dependent on hours of operation, whether liquor is offered, what kitchen equipment is in use, and workers’ comp.
Stenson’s experience makes it clear that even finding insurance can be a challenge. His broker surveyed eight insurance companies, and only two were willing to write a policy.
But, why is it so difficult? Colson notes that the industry itself is still relatively new, making it hard for insurers to accurately price risk around things like liquor liability, injuries on the premises, and equipment loss. To give his risk assessment tool a try, click here.
Rent + utilities
Rent fluctuates based on a variety of factors, but it’s a constant that needs to be factored into the overall cost of running a golf simulator business. Facilities in areas that have a higher cost of living will naturally come with more expensive leases. Where you’re located in the country also matters, with lease costs varying drastically from one market to another.
Colson illustrates his point by comparing rent prices across major cities: Boston, for example, has vastly different costs than Houston, despite both being major metropolitan areas.
Once you secure your space, rent becomes a concrete cost you can plan around. Utilities, on the other hand, can be much harder to predict upfront. Even after doing all the math going in, Stenson said that electricity ended up being a higher-than-expected cost to him. His six bay facility has two separate units, which means two separate electric bills.
Factor in the power consumption of projectors and PCs, and those costs can drive up your electric bill faster than you might expect, making electricity an expense worth thinking through carefully before opening.
Marketing
With so many different marketing strategies, this bucket can get expensive—fast. The key is knowing what’s actually necessary, when, and what should be skipped.
From my perspective working in marketing, Google Paid Ads are arguably one of the most important investments a golf sim business can make. But daily ad spend can look deceptively small until you calculate what it looks like over a full month. This came as a surprise to Notto: “Google does a very good job of charging you per day, and you see a low number. You need to multiply that by 30 for your monthly cost.”
Then there’s sometimes a marketing budget spent on things that don’t drive customer acquisition. Stenson said he “spent hundreds of dollars” on social media ads that “got traction,” but didn’t convert into customers. This is where strategy comes into play.
As a general benchmark, marketing expenses should account for 5 to 10% of overall revenue, according to Colson.
Payroll
You’re in full control of payroll expenses whether you know it or not, which makes staffing one of the biggest cost levers you can pull.The actual number here depends entirely on your business model.
If you run 24/7, unmanned, you can avoid staffing costs altogether. If you choose to have someone manning the front desk, you’re adding payroll, and, according to Colson, how much that costs again comes down to your market.
Making the 24/7 unmanned model work means relying on technology to literally open the doors to your facility, start bay sessions, manage temperature and lighting, and keep the facility secure. To see how Stenson makes it work, check out his full tech stack and integration blueprint.
Software and hardware maintenance
These two are easy to under-budget for as well because they generally only come to mind after a problem surfaces. For example, you might realize that you need access control software to manage entry during night hours, or need to replace equipment that gets damaged through wear and tear.
Colson cautions about these silent expenses: “I think the ones folks don't think about is maintenance and replacement. Screens wear out, bulbs die, you have things on the golf simulator equipment that you're going to have to replace.”
What gets you to profitability, faster
To become profitable, your total revenue needs to outweigh your total expenses, and that’s the foundation of a successful business.
There are a few levers you can pull before you even open the door to your facility that increase your chances of becoming profitable:
- Estimate the golfer population within a 5-mile radius of your target facility’s location. Use email provider websites to filter by golf interests, then determine what share of that population you’d need to capture to fill target hours.
- Size your facility for the market you’re building in. Work backward from your market’s costs, not from how many bays you want to have. Stenson calculated backward from his market’s average rent, which is how he landed on 6 bays. This is the point where bay count covered his rent and target profit without buildout and HVAC expenses becoming larger.
Once your facility is built, the focus shifts to squeezing as much out of it as you can. That means maximizing utilization, and these four levers are entirely in your control. Used strategically, they can help you earn more from the space you already have and recoup your costs faster.
So, when does profit actually show up?
With good early utilization, your business becomes cash-flow positive once monthly revenue starts outpacing OpEx. From there, the next milestone is earning back what you paid in CapEx.
Colson notes that it typically takes 6 to 12 months minimum, depending on how much you invested upfront and how much the facility is capable of generating. For a closer look at the numbers behind opening and operating a golf simulator business, check out Yardstick Golf’s full business plan.
