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Old 10-25-2014, 07:55 AM   #31
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I don't know that the profit margins on a pizza place are large enough to support a track unless the track was also successful. I think the success rate of restaurants is pretty low.
I think it would depend on where in the country you are. It seems that tracks and clubs in smaller towns or more rural areas have a better success rate, due to limited things to do, close by (movies, bars...etc.)
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Old 10-25-2014, 09:35 AM   #32
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The success of this idea will depend on finding the right place. Another poster mentioned warehouse space but I doubt that most families would enjoy going to an industrial area for dining. And enough space to accommodate both ventures in a more retail oriented area will likely entail very high overhead.
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Old 10-29-2014, 11:05 AM   #33
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You should check out the latest issue of RC Car Action magazine (the December issue). There is a great article on this very subject, -they discuss the success of the OCRC track.

As a few people have pointed out in these posts and like the article pointed out. I think first and foremost you just need a good track, one that caters to the majority not the minority. So looking at your idea of an attached pizza joint, I am thinking that would probably not be a good idea. Like Chris mentioned in the previous post, not many families are going to want to go. Think about it, how many people want to go eat and watch RC cars? -probably not many at all. If the RC track is what you want to create then you need to do that right and cater to the majority of RC racers. The tiny tiny percentage that would bring their families ...forget them. They'll get their own pizza and/or go out to eat another night with their family. But they aren't going to go race their cars for hours on end while their family eats pizza and watches.

Find an inexpensive, really inexpensive area to rent/lease and build a damn good track that will attract a lot of RC enthusiasts. Stock it w/ items RC hobbyists will buy and need for racing. Charge $10 per practice day or some kind of monthly fee. Invite clubs to hold their races at your track 1x a month for a sizeable fee and that is your business.

But know that 9 out of 10 tracks will fail. -This is not much different than any other company out there. Restaurants, tech companies, etc, 9 out of 10 don't make it past the first year or so.

that is my 2 cents.
After reading the RC Car Action article I retract my previous post in regards to holding birthday parties at any RC track. I think it would be a huge headache and not bring in the money one might hope.
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Old 10-29-2014, 07:31 PM   #34
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So if the key is to build an awesome track which I agree it is how does one build an awesome track that is cost effective.
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Old 10-29-2014, 07:57 PM   #35
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The birthday party thing is big at slot car tracks. The issue seems to be finding someone good with the kids to make it fun.
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Old 10-30-2014, 06:14 AM   #36
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The birthday party thing can work, but it can get tricky. A local (failed) indoor offrad track tried it and made a couple huge mistakes. They would rent the track out on race days. Party was over only 30min before stsrt of heats leaving no time for practice. Racers never knew when a party was scheduled so if you came to practice you coukd be SOL. And the kids would UTTERLY DESTROY the track. If your going to have membership that allows practice at any time it should mean just that. Or make sure its clear when practice times are vs birthday times. With an carpet track, destruction is less of an issue but damage will still occur so be mindful of that. The best shops also don't have only rc. You have to have a variety of stuff from rc air, land, and sea, to plastic models, to the artsy craft stuff. Racers are fickel bunch that wont pay all the bills so you need other revenue streams to support a loss lead.
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Old 10-30-2014, 03:06 PM   #37
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read the article in RC Car Action (Dec issue), -it is enlightening.

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So if the key is to build an awesome track which I agree it is how does one build an awesome track that is cost effective.
-per the article, you can't cut corners. You've got to invest money in a well designed and built track that is well maintained. Your focus should be the track and the RC hobbyists that come to use the track.

The reason the other tracks failed was because the birthday parties ruined the track experience, thus the true RC hobbyists left. So now you have a crappy track that caters to kids who jsut want to literally bash cars and destroy things.

You'll have to set this up in a place that has a population that will bring business in.

In our area we have 1 club that represents a location of about 350k people. This is before you reach any of the other clubs in the next set of towns and cities. Out of that 350k population our club which runs at parking lots gets about 40-50 racers 1x a month, they generate about $1500 in income from that 1 event, plus another $1k in membership dues per year. I have a difficult time believing that a dedicated track will bring in enough to support a business in my area based on this. Those same racers are going to visit the track, what 1x a week at most? where will all other other racers come from? I suppose others will get involved because a track is around, yet it's a tough call.

Personally i'd love to set a track up, but the location price would have to be dirt cheap for me to give it a go. Like $1500 per month ...yet all the warehouse space in my area is closer to $5k per month. I'd have to sign a 6 month lease at minimum, which means I could be out 30K not to mention other expenses such as tables, track, etc.. You'll need some money to do this right, and not sure it will be easy to convince investors of an RC track.
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Old 10-30-2014, 03:15 PM   #38
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-Seriously my take on this for me personally would be to buy some land that I own and set up my own track and hold club events there. This way if it failed i'd still own the land which would increase in value over time and I could always sell. In my area you can find land for about $150k for 10 acres or so, this in areas where the land isn't picturesque but remote enough and flat, a track event wouldn't bother anyone and would be on your own property. With a loan and current rates your payments would be in the range of $800-$1200 per month. Start with a really nice dirt track made w/ a bobcat ...contact your local club or start your own and hold events. Create a FB page and website to advertise the events. Charge $15 per event, etc... you'll generate enough to pay the mortgage each month on the loan. as the members increase then you can build a permanent canopy over the track, provide generators, etc.. And further increase to an on-road track, etc...

that is how i'd do it. but there are probably many ways to do it.
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Old 04-20-2016, 11:45 AM   #39
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Old thread. I know. I was curious enough to take my building design, business plan and cost projections to the bank and get their opinion. I need to come up with profit margins and business projections for the next 3 years.

What I found:
Bottom line 1/3 down.

My 250' by 150' building would include Hobby Shop, Cafe open as needed, 20 private pits, onroad and offroad indoor tracks. The 22 acre lot backs up to a Wetlands so could be flown over, enough room for an Asphalt track and a dirt offroad track. There would also be an online presence for the shop.

What does this insanity cost: $1.6 million with 540k down. This covers the business and all expenses for 2 years.

What can be cut? Nothing (in my mind). The plan is to attract national events at the rate of 4 or more per year. International if possible.

Any investors out there? I'm ready to try crowd funding.

Would you come to an all season shop that offers a boat pond, 4 tracks, drone racing and possibly flying on site?
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Old 04-20-2016, 11:58 AM   #40
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Old thread. I know. I was curious enough to take my building design, business plan and cost projections to the bank and get their opinion. I need to come up with profit margins and business projections for the next 3 years.

What I found:
Bottom line 1/3 down.

My 250' by 150' building would include Hobby Shop, Cafe open as needed, 20 private pits, onroad and offroad indoor tracks. The 22 acre lot backs up to a Wetlands so could be flown over, enough room for an Asphalt track and a dirt offroad track. There would also be an online presence for the shop.

What does this insanity cost: $1.6 million with 540k down. This covers the business and all expenses for 2 years.

What can be cut? Nothing (in my mind). The plan is to attract national events at the rate of 4 or more per year. International if possible.

Any investors out there? I'm ready to try crowd funding.

Would you come to an all season shop that offers a boat pond, 4 tracks, drone racing and possibly flying on site?
We are in a similar situation. Several of us are trying to get an indoor carpet track built here in the Asheville, NC area. I've crunched the numbers time and time again (I have an MBA and a PhD in business, was a licensed stockbroker and financial adviser, as well as a finance manager for a physicians group so this is not foreign to me).

No matter how it plays out, the numbers just won't work. Here's how I see it:

Invest $1,000,000 in a high dividend stock portfolio mixed with municipal bonds and earn $50K-$70K per year cash flow.

or

Invest $1,000,000 in an RC track & facility, get ZERO cash flow out of it for years, put up with all the headaches of running a track, and then get pennies on the dollar on your investment when you sell out after it closes.



Unless you have a benefactor, like Scott Speed at SpeedRC, who doesn't need to make money from a track AND has capital to put into it, it's really difficult to make a go of it.


No brainer there.
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Old 04-20-2016, 12:12 PM   #41
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Quote:
Originally Posted by scirocco14 View Post
We are in a similar situation. Several of us are trying to get an indoor carpet track built here in the Asheville, NC area. I've crunched the numbers time and time again (I have an MBA and a PhD in business, was a licensed stockbroker and financial adviser, as well as a finance manager for a physicians group so this is not foreign to me).

No matter how it plays out, the numbers just won't work. Here's how I see it:

Invest $1,000,000 in a high dividend stock portfolio mixed with municipal bonds and earn $50K-$70K per year cash flow.

or

Invest $1,000,000 in an RC track & facility, get ZERO cash flow out of it for years, put up with all the headaches of running a track, and then get pennies on the dollar on your investment when you sell out after it closes.



Unless you have a benefactor, like Scott Speed at SpeedRC, who doesn't need to make money from a track AND has capital to put into it, it's really difficult to make a go of it.


No brainer there.
More like ask for double, do both and put the profits from the personal investment back into the track. It is crushing and trying to find 10 guys who expect nothing in return but a place to race is unreasonable.
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Old 04-20-2016, 12:45 PM   #42
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I've been trying both models for opening an RC track: as a non-profit hobby club w/ memberships and race fees, and the for-profit model with a hobby shop, etc.

Memberships would have to be in the $150-200 annual range, w/ race fees $15-20 per class for members and $25 (OR more) for guests. And you'd need at least 100 members to make it work for just a indoor carpet facility.

The for-profit model is even harder to make work, as running a brick & mortar hobby shop these days against the internet is really, really tough to make work unless you already own the building and are willing to work for free. And the race fees really need to be in the $20-25 range per class to make it break even.

Not an easy nut to crack.
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Old 04-20-2016, 02:19 PM   #43
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To answer your original question: If you build it, will they come?

The apparent answer is NO. To illustrate, take my local indoor on-road carpet track, the RUG in King, NC. I've been going there for the last two years now, it is located just north of Winston-Salem, NC, very centrally located on the east coast.

At first, they had the original grey carpet and opened to large crowds. But the on-road carpet guys are an interesting demographic and can be a little fickle. The carpet was a little 'fuzzy', and the complaints mounted up. And people quit coming.

So the owners ponied up for the new CRC FTII black carpet this past season. And the racers came back, but ONLY to practice for the Snowbirds. Once the Snowbirds was came, the attendance dropped. HARD. The last few on-road race days have been cancelled because no one came. Less than a handful of racers showed!

The on-road racer demographic is very complicated. They are serious about their racing, but are very nomadic. They travel from big race to big race, and aren't really interested in regular club racing, which is a track's bread & butter. I understand the need for competition, but it is counter-productive and detrimental to the building of a successful indoor facility.

The RUG is probably one of the best, if not THE best indoor on-road carpet facility on the east coast. And it is empty on race days. Very depressing, and not particularly encouraging for those of us who are interested building a facility. I am willing to travel 3 hours to race there, but apparently it's very difficult to get the local base established so those of us that do travel long distances to race will have someone to race against.

Some have suggested it's a weather related, seasonal thing. But I disagree. It has more to do with the 'big race' mentality of the serious racers, where they will pretty much only show up if there is a big race being held. And the popularity of off-road. And in the South, once the weather warms up people hang up their indoor stuff and head outdoors. Which is fine, but once the next winter rolls around, where are they going to race if the on-road facility can't keep its doors open?

Just observations from the peanut gallery....
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Old 04-20-2016, 02:50 PM   #44
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Before I was addicted to RC cars I was addicted to slot cars. The place I used to race slot cars was named Home Room Racing Cafe! Great name and concept! They had a huge slot car track located in the Resturant with tables located around the track. The whole thing sounded like a great idea if you thought about it. (There was plexiglass around the track to prevent cars flying into your food.) However the food was Thai food. I love Thai food but not everyone does. I always thought they could of did better with a mixed variety of food specially when kids are present and party's. I personally would love for an indoor facility to race at all year long that also serves great food and deserts.
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Old 04-20-2016, 02:54 PM   #45
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Before I was addicted to RC cars I was addicted to slot cars. The place I used to race slot cars was named Home Room Racing Cafe! Great name and concept! They had a huge slot car track located in the Resturant with tables located around the track. The whole thing sounded like a great idea if you thought about it. (There was plexiglass around the track to prevent cars flying into your food.) However the food was Thai food. I love Thai food but not everyone does. I always thought they could of did better with a mixed variety of food specially when kids are present and party's. I personally would love for an indoor facility to race at all year long that also serves great food and deserts.
Does California even have a winter?

Interesting concept, and from a business model point of view it has some potential. But basically what it sounds like it would be a restaurant that the cash flow is siphoned off to support a track. And restaurants have such a small profit margin as it is, I'd think that would be a very difficult thing to pull off.

And there would be the noise issue of the race call annoying restaurant patrons who aren't into RC. Unless it was in a separate part of the building. And then you just have two separate businesses.
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