In a small but tidy corner office nestled between the lounge and snack area of Waverly Woods Golf Club, Tom Healy explains the business like this: It is possible to make money -- lots of it, in fact -- from building a challenging golf course. It's also possible to market what was once considered a slow and boring sport to younger players. And, despite the winter months when many people prefer warm shelter, an outdoor sports facility can still prosper.

Healy should know: In just six years, he and his partner, Joe Hills, built Waverly Woods in Marriottsville, Howard County, which took in $1.4 million in its first year of operation. And soon they will break ground on their second course, Blue Mash in Montgomery County's Laytonsville.

There really is no secret about it, Healy says. "It's simply about people who love golf bringing golf to others who love it just as much. Golf is the best sport. You've got a ball. You've got a stick. And you've got nature."

But what you don't have, at least in the Washington area, Healy added, is perhaps most important. "There just aren't enough nice courses to go to. This is the most underserved area in the country," Healy said. While there are numerous country clubs, which can charge as much as $50,000 or even more for an annual membership, and dozens of municipal courses, few high-end privately owned daily-fee courses exist, he said.

"People want the luxurious accommodations and luxurious playing space that you find at a country club, but they don't want to have to pay the outrageous yearly fees," Healy said.

For that matter, there are comparatively few courses of any kind here. The National Golf Foundation ranks the District and its suburbs just 266th out of 315 metropolitan areas in number of courses. In terms of the industry measure of holes per 100,000 population, Washington does not exactly runneth over with cups: The area has 57 holes per 100,000 people, well below the national average of 76. That includes all courses -- municipal, privately owned public courses and country clubs. "So the demand is clearly there," Healy said.

Building a private golf course for public play is not unlike building any other kind of business, he maintains. A great idea comes first; starting capital follows; but perseverance is what wins the race.

Six years ago, when they were both 28 years old, Healy and Hills raised $6.2 million to build Waverly Woods. To do so, they had to convince a bank loan officer that they would receive financial support from private investors, and they had to convince investors that they would receive financial support from the bank. There were water and zoning permits to apply for, among others. And there was an architect to hire, someone who could transform 200 acres of nothing into a landscape of sprawling fairways and beautiful greens.

"Joe is the one who set this whole thing in motion," said Healy, a former Wall Street banker. "He's the one who noticed there weren't enough great courses. There were too many short courses that weren't very challenging."

So their first idea, back in 1992, was to build a driving range, or a practice course, in Montgomery County, a place that hadn't seen a new high-end daily-fee course in 20 years. But they had to move quickly.

The county was about to repeal the zoning amendment that permitted golf courses to be built in its vast agricultural preserve. Because Hills and Healy had recently purchased farmland for their course and were aware of the pending repeal, Hills filed for a special exception permit one day before the council vote. The following day, the county voted to bar future golf courses, but fortunately for the two partners, prior applicants were allowed to play through.

But not right away. First, the two men took a dogleg into Howard County when developers of the Waverly Woods subdivision there asked them to build an adjacent golf course. "So we put together a plan and raised the money," Healy said. "We hadn't even thought about having two courses."

In the 12 months since Waverly opened, the course has been good to Healy, Hills and the 19 private investors who contributed about $100,000 each.

"Rich guys like to play golf, and it's neat for them to say they own part of the course they play at. There's kind of this charm that goes with it," Healy said.

Plus, the investors get a great return, he said. Unlike stocks, a golf course produces cash flow: Once the course is established, by its second year or so, the investors should begin to receive some $20,000 to $30,000 annually.

But business has to remain solid, and in a seasonal business such as this one, that can be difficult. A course can lose up to $15,000 on a rainy Saturday. So, how does a golf course make money -- enough money to offset an entire winter?

"The way to make money is to build a great product and build it in a great location and build it for less than the competitors. Then, even if the market suffers, you'll have the ability to weather the storm," Healy said.

Waverly Woods makes money through promotional incentives, such as holiday specials, food and beverage sales and Waverly Woods-logo apparel, but the 18-hole course earns the bulk of its income from the daily fees of $50 that it charges for each round. (The fee includes use of a golf cart.) Even county-owned municipal courses, which are generally lower-end courses, charge as much as that. A typical course sells about 40,000 rounds a year, but a course that cost extra to build must find a way to sell thousands more rounds just to break even. Waverly's development costs came in below par, according to Healy, giving it some wiggle room: If the economy goes south and demand dips, Healy and Hills should be able to adjust their prices accordingly.

Mike Hughes, executive director of the National Golf Course Owners Association in Mount Pleasant, S.C., said that to remain competitive a course must stay fresh, at the forefront of consumers' minds.

"It becomes much more of a marketing game," he said. "There need to be promotional efforts made to attract new and repeat customers."

Such promotions include frequent-player discounts, freebie offers and reduced fees for various tee times, Hughes said.

With effective marketing, Healy and Hills hope to generate enough revenue that they can close Waverly and eventually Blue Mash during the off-season.

Along with being creative marketers, Hughes said, golf course owners must be able to adapt to seasons of change, as owners of any business must. In the past five years the biggest change, he added, is the number of golf courses that have sprung up around the country.

According to the National Golf Foundation, there are 16,365 golf courses in the nation, the largest number being in Florida. In Washington, Maryland and Virginia combined, there are 530 courses, 360 of them 18-hole courses. Montgomery County, where Blue Mash will be built, has 30 courses, 20 of them private, to serve about 800,000 people. Howard County, where Waverly Woods is located, has seven, of which only three are open to the public. But the rate at which courses are being added in Howard and surrounding counties is growing. Last year, 448 courses were built across the nation, the foundation said.

In two more years, when Healy and Hills expect to open Blue Mash, nearly a decade after they bought the land, the number of area courses will prove stiff competition. But the partners are confident their Laytonsville property will be a winner.

"Like any other business, there are those with a good location, a good product and a good price that will survive, and there are those that won't," Hills said. "We'll be one of the ones that do survive because we have something great to offer: challenging golf at an affordable price on a very beautiful course."

The Swing Generation

There are 26.4 million golfers age 12 and over in the United States. Of those, about 5.4 million are avid golfers, meaning they play 25 or more rounds a year.

The typical golfer is male, 39 years old, has a household income of $65,775 and plays 20 rounds a year.

Women make up only 22 percent, or 5.7 million, of the nation's golfing population, but they comprise 39 percent of all beginning golfers.

The average female golfer is 42 years old, has an average household income of $68,285 and plays 15 rounds a year.

There are 16,365 golf courses in the nation. This includes regulation courses, where par is generally 72; executive-length course, where par is about 60; and par-3 courses. About 70 percent, or 11,657, are public courses.

Last year, 448 new golf courses were built in the nation. Of this number, 155 were additions to existing courses (from nine holes to 18) and 241 were nine-hole layouts.

* Sources: "Golf Participation in the U.S.," 1999 edition; "Golf Facilities in the U.S.," 1999 edition