PGA PGM Level 1 Practice Guide
T/F The process for developing a business plan starts before you establish the goals you would
like to achieve for the shop's coming year. - ANS-False
Who should provide direction for creating the business plan at a golf operation? - ANS-All PGA
Professionals
T/F According to the Business Planning Model, a business plan should build on and refine the
operational plan - ANS-True
T/F Long range planning should initially assume an adversarial relationship between
neighboring facilities that directly compete with each other. - ANS-False
What is the usual business duration for long-range planning? - ANS-3-5 years
What is the most significant benefit of strategic business planning? - ANS-A competitive
advantage and meet objectives
T/F Helping establish a starting point for goals, objectives, and related strategies is an
appropriate use of the SWOT analysis. - ANS-True
T/F Financial forecasts should be based on historical data derived from a linear trend analysis. -
ANS-True
You are in the process of completing a business plan for the golf shop. Initial forecasts of sales,
expenses, and profit have been made. Past data has been analyzed and important inside and
outside factors have been identified. What is the next step to be taken towards completing the
plan? - ANS-Monitor the performance
A golf professional is purchasing a golf course. The business plan he presented to his banker
included his history of successfully operating similar facilities, budget projections for the first five
years under his management, and objectives and strategies for reaching his goals. The banker
rejected his loan application because of missing information. What important element is missing
from the business plan? - ANS-Current State of the business
T/F A vision defines the short term objectives that must be accomplished in the upcoming year. -
ANS-False
,T/F A Facility profile defines the overall culture of the business. - ANS-False
T/F The projected customer base of certain golf facilities located in the US could assume
members drawn from international markets. - ANS-False
T/F A yield analysis is used to compile a facility's historical data on the number of rounds
played. - ANS-True
What is the process called when the manager reviews total rounds to determine who is playing
and when? - ANS-Yield analysis
T/F Mission statements should include a definition of the facility's underlying financial model. -
ANS-True
T/F A sound mission statement defines the long-term vision and core values of a facility. -
ANS-True
T/F It is appropriate to address the role of the employee in the mission statement. - ANS-False
T/F The interpretation of quantitative data is less susceptible to differences of opinion than
qualitative data. - ANS-True
T/F Customer demographics is an internal factor. - ANS-True
What type of information is typically provided by qualitative data? - ANS-Golf course,
enjoyment, flavor of food...
*not numerical*
What examples would be considered internal data sources for planning purposes? -
ANS-Staffing, maintenance, amenities & marketing
T/F Cost of goods sold is an example of qualitative data. - ANS-False
What information would be most useful to the planning team interested in measuring the
facility's past or current success? - ANS-Quantitative data
T/F The utility of your business plan for managing day-to-day operations in a golf shop depends
on your ability to manage internal factors - ANS-True
T/F The SWOT analysis would treat opportunities and threats as factors that usually can be
controlled by the facility. - ANS-True
,T/F The results of a SWOT analysis could be sufficient justification for the abandonment of a
core business function. - ANS-True
T/F Staff Evaluations are a relevant data source for a SWOT analysis. - ANS-True
How might revenues be affected at a nearby daily fee course if the local tire plant has major
layoffs? - ANS-Less income in the area to spend
T/F lack of a mission statement is an example of a weakness that a SWOT analysis might
disclose - ANS-False
T/F Trends in local consumer spending would be most useful for evaluation in a core business
function. - ANS-False
What should govern the decision to pursue an opportunity? - ANS-Opportunity costs
T/F Consider the following statement as part of a business plan: "improve range profits and
customer satisfaction." According to the business planning course, this statement is an example
of an objective - ANS-False (not detailed enough)
T/F The new manager of a 10 year old private course, currently doing an average of 5,000
tournament rounds per year, proposes to increase tournament rounds by 50% by the end of
next year. This proposal meets the criteria for an effective business objective as presented in
the Business Planning Course Manual. - ANS-True
T/F "Develop and promote group programs aimed at women and juniors" is an example of an
effective business objective. - ANS-True
What important characteristic is missing in the business objective: "Increase pro shop sales next
year"? - ANS-Too vague
Needs a numerical goal to track
Which characteristic of goals and objectives is described as capable of being observed,
recorded, and measured? - ANS-Achievable
What is a functionally significant difference between goals and objectives? - ANS-Goals =
long-term
Objectives = short-term
T/F a facility's financial objectives could be achieved through operational strategies alone. -
ANS-False
The Following agenda was part of a golf range business plan. "Purchase 175 dozen range balls
and rotate usage three times a year. Who: Head Professional. When: End of First Quarter. Cost:
, $1500" According to the Business Planning course, describe the business plan component
represented by this statement? - ANS-Specific actions and resources that support the
strategies
What is an example of a financial strategy? - ANS-Changing fees within an area or department
What would be the most appropriate initial response to facility income not meeting projections? -
ANS-Unrealistic projection
T/F Calculating yield involves knowing the relationship between the amount utilized and the
amount available. - ANS-True
T/F: Gross profit is the difference between net sales and cost of goods sold. - ANS-True
T/F linear trend analysis and base year analysis are examples of vertical analyses. - ANS-False
T/F The divisor in the linear trend formula-average percentage is the number of years of change
being measured. - ANS-False
T/F Conducting a base year analysis is a good choice for a facility that has just completed a
project that added nine new holes to the original 9-hole course. - ANS-True
Golf shop sales of $100,000 yield a gross margin of $30,000. What is the percentage of the cost
of goods? - ANS-30%
What is the definition of the "cost of goods sold"? - ANS-The value (at cost) of all merchandise
that is sold to customers, stolen, lost, damaged or destroyed
If the gross target margin for your golf shop were about 40%, what would be the target % for
your cost of goods sold? - ANS-60%
According to the Business Planning Course Manual, what is usually the largest contributor to
the bottom-line profit of the facility? - ANS-Guest play and tournament rounds
What is the formula for Merchandise Net Operating income? - ANS-Revenue - (Cost of goods
sold + Operating expenses)
What events would cause a change in the forecast for golf shop expenses? - ANS-Labor, rent,
utilities, insurance,...
What metric should be part of every forecast regardless of the type of facility? - ANS-Revenue
per round
T/F The process for developing a business plan starts before you establish the goals you would
like to achieve for the shop's coming year. - ANS-False
Who should provide direction for creating the business plan at a golf operation? - ANS-All PGA
Professionals
T/F According to the Business Planning Model, a business plan should build on and refine the
operational plan - ANS-True
T/F Long range planning should initially assume an adversarial relationship between
neighboring facilities that directly compete with each other. - ANS-False
What is the usual business duration for long-range planning? - ANS-3-5 years
What is the most significant benefit of strategic business planning? - ANS-A competitive
advantage and meet objectives
T/F Helping establish a starting point for goals, objectives, and related strategies is an
appropriate use of the SWOT analysis. - ANS-True
T/F Financial forecasts should be based on historical data derived from a linear trend analysis. -
ANS-True
You are in the process of completing a business plan for the golf shop. Initial forecasts of sales,
expenses, and profit have been made. Past data has been analyzed and important inside and
outside factors have been identified. What is the next step to be taken towards completing the
plan? - ANS-Monitor the performance
A golf professional is purchasing a golf course. The business plan he presented to his banker
included his history of successfully operating similar facilities, budget projections for the first five
years under his management, and objectives and strategies for reaching his goals. The banker
rejected his loan application because of missing information. What important element is missing
from the business plan? - ANS-Current State of the business
T/F A vision defines the short term objectives that must be accomplished in the upcoming year. -
ANS-False
,T/F A Facility profile defines the overall culture of the business. - ANS-False
T/F The projected customer base of certain golf facilities located in the US could assume
members drawn from international markets. - ANS-False
T/F A yield analysis is used to compile a facility's historical data on the number of rounds
played. - ANS-True
What is the process called when the manager reviews total rounds to determine who is playing
and when? - ANS-Yield analysis
T/F Mission statements should include a definition of the facility's underlying financial model. -
ANS-True
T/F A sound mission statement defines the long-term vision and core values of a facility. -
ANS-True
T/F It is appropriate to address the role of the employee in the mission statement. - ANS-False
T/F The interpretation of quantitative data is less susceptible to differences of opinion than
qualitative data. - ANS-True
T/F Customer demographics is an internal factor. - ANS-True
What type of information is typically provided by qualitative data? - ANS-Golf course,
enjoyment, flavor of food...
*not numerical*
What examples would be considered internal data sources for planning purposes? -
ANS-Staffing, maintenance, amenities & marketing
T/F Cost of goods sold is an example of qualitative data. - ANS-False
What information would be most useful to the planning team interested in measuring the
facility's past or current success? - ANS-Quantitative data
T/F The utility of your business plan for managing day-to-day operations in a golf shop depends
on your ability to manage internal factors - ANS-True
T/F The SWOT analysis would treat opportunities and threats as factors that usually can be
controlled by the facility. - ANS-True
,T/F The results of a SWOT analysis could be sufficient justification for the abandonment of a
core business function. - ANS-True
T/F Staff Evaluations are a relevant data source for a SWOT analysis. - ANS-True
How might revenues be affected at a nearby daily fee course if the local tire plant has major
layoffs? - ANS-Less income in the area to spend
T/F lack of a mission statement is an example of a weakness that a SWOT analysis might
disclose - ANS-False
T/F Trends in local consumer spending would be most useful for evaluation in a core business
function. - ANS-False
What should govern the decision to pursue an opportunity? - ANS-Opportunity costs
T/F Consider the following statement as part of a business plan: "improve range profits and
customer satisfaction." According to the business planning course, this statement is an example
of an objective - ANS-False (not detailed enough)
T/F The new manager of a 10 year old private course, currently doing an average of 5,000
tournament rounds per year, proposes to increase tournament rounds by 50% by the end of
next year. This proposal meets the criteria for an effective business objective as presented in
the Business Planning Course Manual. - ANS-True
T/F "Develop and promote group programs aimed at women and juniors" is an example of an
effective business objective. - ANS-True
What important characteristic is missing in the business objective: "Increase pro shop sales next
year"? - ANS-Too vague
Needs a numerical goal to track
Which characteristic of goals and objectives is described as capable of being observed,
recorded, and measured? - ANS-Achievable
What is a functionally significant difference between goals and objectives? - ANS-Goals =
long-term
Objectives = short-term
T/F a facility's financial objectives could be achieved through operational strategies alone. -
ANS-False
The Following agenda was part of a golf range business plan. "Purchase 175 dozen range balls
and rotate usage three times a year. Who: Head Professional. When: End of First Quarter. Cost:
, $1500" According to the Business Planning course, describe the business plan component
represented by this statement? - ANS-Specific actions and resources that support the
strategies
What is an example of a financial strategy? - ANS-Changing fees within an area or department
What would be the most appropriate initial response to facility income not meeting projections? -
ANS-Unrealistic projection
T/F Calculating yield involves knowing the relationship between the amount utilized and the
amount available. - ANS-True
T/F: Gross profit is the difference between net sales and cost of goods sold. - ANS-True
T/F linear trend analysis and base year analysis are examples of vertical analyses. - ANS-False
T/F The divisor in the linear trend formula-average percentage is the number of years of change
being measured. - ANS-False
T/F Conducting a base year analysis is a good choice for a facility that has just completed a
project that added nine new holes to the original 9-hole course. - ANS-True
Golf shop sales of $100,000 yield a gross margin of $30,000. What is the percentage of the cost
of goods? - ANS-30%
What is the definition of the "cost of goods sold"? - ANS-The value (at cost) of all merchandise
that is sold to customers, stolen, lost, damaged or destroyed
If the gross target margin for your golf shop were about 40%, what would be the target % for
your cost of goods sold? - ANS-60%
According to the Business Planning Course Manual, what is usually the largest contributor to
the bottom-line profit of the facility? - ANS-Guest play and tournament rounds
What is the formula for Merchandise Net Operating income? - ANS-Revenue - (Cost of goods
sold + Operating expenses)
What events would cause a change in the forecast for golf shop expenses? - ANS-Labor, rent,
utilities, insurance,...
What metric should be part of every forecast regardless of the type of facility? - ANS-Revenue
per round
