Don, JKM,Many good points; sounds like a lot of work though! I agree that the homework is a must, but Mr. Hendren's comment (even if he was joking) seems to imply that you can do all of that and still go bankrupt. One can be iron-fisted on the expenditures, and if that's what it takes to make the trains run on time, then so be it I suppose. But what if you don't want to be Mussolini?
Well, it is a lot of work. No one can say it any other way. And yes, he is correct, you can do everything 'by-the-book' and still go bust. However, that is my reason for saying limit debt to the highest degree. If your debt is $0 (doubtful for sure) then you only have to make enough revenue to cover the operating expenses, which can be cut in 'lean' times. But the less your debt is, the less you are liable for, obviously, when there is a downturn. I work for a man who owns his own driving range. This time of year, when we are out of season, he does most of the work himself, only having us come in 2 or 3 days a week at most (great for working on my gym physique but very hurtful on the wallet). If you are going to be an owner, that is something you'd need to be willing to do, at least for a little while until you could establish the business.
And you don't have to be 'iron-fisted' on expenses. The main budgetary item for the year is maintenance. So, have your Super put together a list of projected expenses, add a certain percentage and that is his budget for the year. If you budget him, say, $500,000 for the year, he can spend that money on whatever he wants, so long as he doesn't go over. Same with the pro shop, grill, etc. Butget them a certain dollar amount (assuming you aren't the one in control of it all) and so long as they don't go over that amount, they are fine. Of course, if they have a need through the year which requires more than budgeted, they have to come to you, the owner, for approval. That way, you don't have to be a toolbag as far as the money goes, you just require them be at or below budget unless you approve something higher.
As the owner, you can't be stressing about whether or not your Super buys an extra case of oil or your Head Professional buys a new line of shirts for the season. You just give them a set amount of money to spend and they go spend that amount and not a cent more. Now you audit the books every so often for sure, but you are not counting pennies on a daily basis.
I hope to be able to own my own place someday, anything from a basic retail/repair shop all the way up to a full club facility. No kind of business can be run successfully with excessive debt; debt is the #1 reason that small businesses fail. I would say a very good indicator of potential success would be asset to liability ratio. If its good (high asset-low liability) then it will be far easier to succeed. Thats about the best thing I can say to you if you really intend to own a golf course or any other business for that matter.
