Guys, I'm really appreciating the advice. Thanks to you i'm looking at this from a "shop with track" perspective rather than the reverse.
I want to be very careful about how much I disclose before I make any decisions, but population and affluence won't be a problem. It's the interest in the hobby I'm concerned with. and the devastating cost of square footage. Here's the letter I've sent out to tracks around the country, it'll give you an idea of just how bad the numbers seem to be from my calculations:
I'm calling out to current owners and past owners of the indoor
raceway business. I have one strong push left in me to build my
own business. I've decided to investigate this one as a
possibility because, though I make a good living, I have never
been satisfied in my professional life. I want to try making a
living at something I love, in an environment I enjoy.
I've been doing some calculations, and I've been admittedly
conservative, however, even if I boost my estimates to moderate,
I'm still falling thousands short of even "breaking even" per
month.
There are so many tracks around the country that have been at it
for years. I'm clearly missing something in my calcs, I need some
help here from anyone who will give it.
I'm very serious about this, so much so that I don't want to
disclose the location until I have a thorough understanding of
the business model. I will say this though, it's California and
not within 60 miles of any existing track, so never fear me
trying to move in on someone else's territory.
I'm considering leasing from 8000 to 15000 sq ft. for one offroad
track, a fully stocked parts counter and space to host big
events. In my area, based on that sq footage, the lease will be
aproximately $6k-$10k/mo.
Also my area has a very good size population.
With that in mind, please look over my numbers here and correct
what seems inaccurate, and add or delete categories as you see
fit.
You can answer as little or as much as you want, obviously the
more the better for me, but I understand we all have time
constraints and reservations to disclosing certain info about our
businesses. Whatever you feel comfortable with, it would be much
appreciated. And please don't feel restricted to just the info
I've asked for, if there's key information that I didn't even
know to ask, then please note that. I want to make the best
informed decisions I can going into this venture.
Accuracy??
Start up costs:
Tenant demolition/improvement, lease deposit,
track construction, office computers, advertising,etc.. = $30k
Monthly Costs:
Lease = $6k-$10k
Electricity, Air conditioning, phone, internet,
directv, insurance, etc... = $4k
Employees x3 = $10/hr(plus state costs for each)
x8hrs x5days x4weeks = $5.5k
Total monthly costs NOT including my own pay = $15.5k - $19.5k
Monthly Income:
Track usage during the week(mon-thurs) = $15 x40
people per week x4 weeks = $2400
Track usage on weekends and 1 weekday racenight
(Fri-Sun+Wed) $15 x25 people per day x3 days x4
weeks = $4500
Fully stocked Parts counter net profit = $1000
Repair Services = $ 500
T-Shirts, Hats, Stickers, etc... Net Profit = $ 200
Sponsorship from local businesses and hobby industry = $ 500
My own creative ideas for more income, net profit = $1000
Total Monthly Income = $10100
Total Profit still not including my own pay = (-$5.4k) - (-$9.4k)
So you can see my difficulty, what am I not seeing/considering?
questions to ask a track owner:
What were your start-up costs
What is your track rental income per month or week or however
you'd like to qualify it
What is your gross/net for the parts/hobby counter
Are there other sources of income I haven't mentioned, that
you're willing to share?
did you need a loan, business plan?
How long have you been open?
any tips?
Thank you in advance for anything at all you can contribute, Mike