The Business Fairways in the foothills of the Smoky Mountains. A 25-year-old golf resort and championship course where 35,000 rounds are played annually, virtually year-round, in a temperate clime. The 18-hole, 72-par course draws 90% of its income from out-of-town golfers. Golf packages account for 65% of revenues. Memberships, daily fees, and food and beverage sales make up the rest. Facilities include six buildings, among them a rustic clubhouse and a full-service dining room that seats 100. Additional buildings -- six cottages and four townhouses -- serve as guest accommodations. Adjoining acreage could be developed.

Financial Summary
1989 1990 1991
Gross revenues* $1.446 $1.665 $1.925

million million million

Recast earnings before $319,300 $436,400 $453,700

interest, taxes, depreciation,

and owner compensation

*Fiscal year ends October 31

Price $5 million

Outlook Growth in the market is above par. The number of golfers hitting the greens has soared -- it's up nearly 40% in the past five years. With more than two-thirds of this course's clientele returning from year to year, the customer base is stable, if small. The number of rounds played is low for a location that enjoys 70-degree days even in January. Better marketing might attract younger players and more play.

Price Rationale The owner assigns nearly $3 million of his $5-million price tag to the course itself. At 7 times cash flow, his valuation is generous but not unrealistic. Multiples can range from 4 to 10, experts claim. Besides, golf courses typically cost $2 million to $3 million to construct new. It's the additional real estate being sold with the resort that may not warrant the total price. Valued at almost $2 million, 30 building lots and 250 undeveloped acres could be expensive baggage for a buyer. Beautiful views won't service the debt.

Pros Healthy cash flow and lots of land spell expansion potential. Plus, a residence is thrown in. Devise a marketing plan on the back nine. Get a tee time whenever you want it.

Cons Servicing millions in debt could land a new owner in the rough. Regardless, you'll have a new handicap: a 20-year-old irrigation system and an aging fleet of 80 golf carts that'll cost half a million to replace. And what if it rains? The bottom line takes a beating in bad weather.

Inc. has no stake in the sale of the business featured. The magazine cannot confirm the accuracy of financial or other information offered by the seller. Inquiries should be directed to David Haynes, P.O. Box 928, Waynesville, NC 28786.