Next Stage Business Help-Again!
Discussion
Evening Guys,
I've had a change of heart regarding the buying out the current owners of the company i work for, on second thoughts it seems silly to buy it off them when i would have to do so much to finish the place to a higher standard. As a youth i will also not be likely to secure a massive loan, certainly not enough to buy them out and then re-finish the place too. So why not start one up myself?
So, the idea of me starting my own track has started and i'm just trying to figure out the key factors: Cost, Location, Funding, Market etc.
Cost:
Premises- I'm going to need a large warehouse, suitable to build a track, garages, office, reception area, boardroom etc. Currently, i have no clue on the cost of a warehouse, could anyone point me in the direction of somewhere that would hold relative information please? Also, how much will rent per month be likely to be, rough estimates as i genuinely have little idea. Thanks.
Karts- I'll need to purchase roughly 25 or so Karts, ideally, i'd like to be able to offer my customers the quickest karts in the UK for them to race in, i'd be happy to pay a premium for them as i believe that i could use the fact they were the fastest as a good advertising and promotion which in turn hopefully would help persuade potential customers to choose my company over others.
Workshop- I'll need to kit out a workshop suitable for repairing the karts for when problem occur, which hopefully won't be too often! The workshop won't need to be massive just suitable to store a few karts and relevant tools and machinery. I'll need to purchase all relevant tools and machinery too.
Timing System- I'll have to invest in a good quality timing systems to track lap times and speed of karts, i know currently the one we use at work was quite costly but one of my colleagues assures me he has the skill and knowledge to create a system superior, hopefully he can and i'd be more than happy to trial it out.
Accessories- I'll need to purchase at least 50 race suits, helmets and gloves for customers as well as all extras such as flags, marshall suits etc.
Office- I'll need an office at the track so obviously basic office equipment and a Mac!
will be needed along with a basic reception area and changing rooms.
Location:
Currently, the company i work for believe they are well located, which i'd agree and disagree with, they advertise that they are close to the M4 which seems great but it's actually a bit of a trek from the junction and at the top of a village with a narrow single lane road the only way to access. After doing a small amount of research i've decided where i'd like to locate (Bath) as i believe it is a great city, will have relevant premises and a large market of customers as well as large corporates. Bath is also easy to access from the motorway and surrounding areas. However, i expect it will be quite costly as demand for such premises will be relatively high. Nothing definite though guys, still just an idea.
Funding:
I'm still unclear as how i will get hold of intial funding for me to start up? I also fear this will be the hardest part for me to overcome, as i know i am such a high risk for a bank but hopefully if i can put together a good business plan they'll have as much belief as i do in myself and the idea they'd be willing to lend me the money. I'm not sure how much at this point i'll need to borrow, more then an average mortgage i expect!
I'm sure i've missed quite a bit out guys, please still remember that it is just an idea at the moment as i am just 16
. Hopefully, someone will take an interest and help me out here with some advice and bring to my attention more stuff i should consider.
Thanks for your time.
Mike
I've had a change of heart regarding the buying out the current owners of the company i work for, on second thoughts it seems silly to buy it off them when i would have to do so much to finish the place to a higher standard. As a youth i will also not be likely to secure a massive loan, certainly not enough to buy them out and then re-finish the place too. So why not start one up myself?
So, the idea of me starting my own track has started and i'm just trying to figure out the key factors: Cost, Location, Funding, Market etc.
Cost:
Premises- I'm going to need a large warehouse, suitable to build a track, garages, office, reception area, boardroom etc. Currently, i have no clue on the cost of a warehouse, could anyone point me in the direction of somewhere that would hold relative information please? Also, how much will rent per month be likely to be, rough estimates as i genuinely have little idea. Thanks.
Karts- I'll need to purchase roughly 25 or so Karts, ideally, i'd like to be able to offer my customers the quickest karts in the UK for them to race in, i'd be happy to pay a premium for them as i believe that i could use the fact they were the fastest as a good advertising and promotion which in turn hopefully would help persuade potential customers to choose my company over others.
Workshop- I'll need to kit out a workshop suitable for repairing the karts for when problem occur, which hopefully won't be too often! The workshop won't need to be massive just suitable to store a few karts and relevant tools and machinery. I'll need to purchase all relevant tools and machinery too.
Timing System- I'll have to invest in a good quality timing systems to track lap times and speed of karts, i know currently the one we use at work was quite costly but one of my colleagues assures me he has the skill and knowledge to create a system superior, hopefully he can and i'd be more than happy to trial it out.
Accessories- I'll need to purchase at least 50 race suits, helmets and gloves for customers as well as all extras such as flags, marshall suits etc.
Office- I'll need an office at the track so obviously basic office equipment and a Mac!
will be needed along with a basic reception area and changing rooms.Location:
Currently, the company i work for believe they are well located, which i'd agree and disagree with, they advertise that they are close to the M4 which seems great but it's actually a bit of a trek from the junction and at the top of a village with a narrow single lane road the only way to access. After doing a small amount of research i've decided where i'd like to locate (Bath) as i believe it is a great city, will have relevant premises and a large market of customers as well as large corporates. Bath is also easy to access from the motorway and surrounding areas. However, i expect it will be quite costly as demand for such premises will be relatively high. Nothing definite though guys, still just an idea.
Funding:
I'm still unclear as how i will get hold of intial funding for me to start up? I also fear this will be the hardest part for me to overcome, as i know i am such a high risk for a bank but hopefully if i can put together a good business plan they'll have as much belief as i do in myself and the idea they'd be willing to lend me the money. I'm not sure how much at this point i'll need to borrow, more then an average mortgage i expect!
I'm sure i've missed quite a bit out guys, please still remember that it is just an idea at the moment as i am just 16
. Hopefully, someone will take an interest and help me out here with some advice and bring to my attention more stuff i should consider.Thanks for your time.
Mike
iMike said:
Karts- I'll need to purchase roughly 25 or so Karts, ideally, i'd like to be able to offer my customers the quickest karts in the UK for them to race in, i'd be happy to pay a premium for them as i believe that i could use the fact they were the fastest as a good advertising and promotion which in turn hopefully would help persuade potential customers to choose my company over others.
Mike
one part that I have time to comment on is the kart bit- i dont know how much you know about karts but for the quickest karts in the uk you would be looking at something along the lines of a KF1 or possible an Aixro wankel engineMike
But obviously with powerful motors like these comes much larger purchasing costs and huge servicing costs
Then theres the rotax engines, good service intervals and pretty good reliability, but do you really want to go giving these crazy people who think that 5hp funkarts are quick a 30bhp racing kart?? if so then you'l need a good supplier of new rear bumpers and bodywork lol!
That said- if you had a good track with an Aixro or something like that then you would probably get a visit off me lol
Thanks for the reply. 
I can't remember what company it was but they advertised as using the quickest karts in the UK, now i expect they are definitely not Rotax or similar. I'll most likely use Gas Karts, so will need to source out the quickest Gas Karts in the UK.
Still, eventually, would be nice to have a few of the Rotax karts for use at an extra cost and for experienced drivers.
Thanks
Mike
I can't remember what company it was but they advertised as using the quickest karts in the UK, now i expect they are definitely not Rotax or similar. I'll most likely use Gas Karts, so will need to source out the quickest Gas Karts in the UK
.Still, eventually, would be nice to have a few of the Rotax karts for use at an extra cost and for experienced drivers.
Thanks
Mike
!!!!!INSURANCE!!!!!!
I dread to think how much it will be, probably your biggest expense after the karts ESPECIALLY if you want to give balls out 90mph karts to noobs.
Daytona et al. do this stuff *very* well. The premesis + staff +tracks ... everything you mention is top draw.
My initial thoughts on this are that you are not stepping into an empty market space with a USP of fastest karts out there, there is probably a reason why daytona give you 60mph karts and not faster ones - probably insurance / repair costs.
The problem with karting is you need a karting track.
I went to a farmers field once to go Quad biking / scrambling. This was mint, really good fun, and the setup costs must have been massively lower as you don't need a track built. Maybe put some thought in trying a lower risk venture. Try to find some land, and get a few quads or something. Setup will be a fraction of what you propose, and if the business is working, you can look to build your karting track on there in the future.
I just think you should walk before you run, you are probably bored of people telling you you are young, but trust me, I have progressed more in the last 3 years than in the previous 23 combined.
FWIW, expect to pay about 1K/month for a decent workshop, and similar amounts on business rates (elec+council tax etc.etc..) - I think that that is a fair ballpark.
Good luck, keep bouncing ideas off here as you are, it will stand you in good stead. By all means do what you want of course, this is just my take
I dread to think how much it will be, probably your biggest expense after the karts ESPECIALLY if you want to give balls out 90mph karts to noobs.
Daytona et al. do this stuff *very* well. The premesis + staff +tracks ... everything you mention is top draw.
My initial thoughts on this are that you are not stepping into an empty market space with a USP of fastest karts out there, there is probably a reason why daytona give you 60mph karts and not faster ones - probably insurance / repair costs.
The problem with karting is you need a karting track.
I went to a farmers field once to go Quad biking / scrambling. This was mint, really good fun, and the setup costs must have been massively lower as you don't need a track built. Maybe put some thought in trying a lower risk venture. Try to find some land, and get a few quads or something. Setup will be a fraction of what you propose, and if the business is working, you can look to build your karting track on there in the future.
I just think you should walk before you run, you are probably bored of people telling you you are young, but trust me, I have progressed more in the last 3 years than in the previous 23 combined.
FWIW, expect to pay about 1K/month for a decent workshop, and similar amounts on business rates (elec+council tax etc.etc..) - I think that that is a fair ballpark.
Good luck, keep bouncing ideas off here as you are, it will stand you in good stead. By all means do what you want of course, this is just my take
Edited by stuthemong on Tuesday 27th May 23:17
Hi Mike,
First off, you need to forget about the new Mac, fancy offices and the like, and first, ask three basic questions:
1. What can you provide that isn’t being provided already?
2. How much will people pay and how often?
3. How big is the market?
You need to do your homework here as it could save you a lot of time and lot a little amount of money!
LOCATION
This is crucial and a double-edged sword. Somewhere convenient will be better for business and logistics but carry a huge cost premium. Somewhere out of the way will be cheaper but more difficult to attract customers. Will your market be willing to pay more money for a better venue or less money for a less convenient venue?
The most important question is – “which option will make you the most money?” Running a fleet of 15 single engined karts in an old warehouse near a rail depot with a third-hand portakabin, boiler suits for race suits and tyre stacks marking the track may not fit with your vision but if it’s making good money………!
Best way to identify costs is look for suitable locations available at both end of the scale and ask the estate agent.
KARTS
You seem to be hooking on the speed of the kart as a USP – which is good. However, the faster they go, the more restrictions there are on the space needed to contain them which will therefore impact on your choice of location.
Insurance too will increase greatly with the type of karts made available. The faster they go, the more dangerous they become, ergo, the more you pay the insurance company.
Factor in maintenance costs too. The reason most circuits provide the standard Zip single or twin engined kart is that they are bullet proof and reliable (remember who’ll be driving them!!!)
MARKET
Who are you targeting? Biggest spenders are corporate entertainment but to attract this market you’ll need catering (which you could end up making more money from than the hire of the karts). You also need to think about who you will be up against in this market – paintball, laserquest, bowling….all considerably cheaper so think about how you can add value.
FUNDING
Unless you have collateral and/or more than half of what you need, then no bank will loan you the money. Venture Capitalists might if you have a rock solid business plan but don’t expect to retain full or even majority ownership of the business. Remember that profit is correlated to risk. If you’re taking the lesser risk then expect a lesser cut.
YOUTH
Don’t let anyone say you are too young to do this. Youth is a powerful tool and you are blessed with the fact that you have nothing to loose. To be honest, you have slightly less than zero chance of making this happen BUT – you should strive to prove me wrong and even if you don’t, what you’ll learn along the way will be just as important as one day, you WILL do it.
Good luck!
First off, you need to forget about the new Mac, fancy offices and the like, and first, ask three basic questions:
1. What can you provide that isn’t being provided already?
2. How much will people pay and how often?
3. How big is the market?
You need to do your homework here as it could save you a lot of time and lot a little amount of money!
LOCATION
This is crucial and a double-edged sword. Somewhere convenient will be better for business and logistics but carry a huge cost premium. Somewhere out of the way will be cheaper but more difficult to attract customers. Will your market be willing to pay more money for a better venue or less money for a less convenient venue?
The most important question is – “which option will make you the most money?” Running a fleet of 15 single engined karts in an old warehouse near a rail depot with a third-hand portakabin, boiler suits for race suits and tyre stacks marking the track may not fit with your vision but if it’s making good money………!
Best way to identify costs is look for suitable locations available at both end of the scale and ask the estate agent.
KARTS
You seem to be hooking on the speed of the kart as a USP – which is good. However, the faster they go, the more restrictions there are on the space needed to contain them which will therefore impact on your choice of location.
Insurance too will increase greatly with the type of karts made available. The faster they go, the more dangerous they become, ergo, the more you pay the insurance company.
Factor in maintenance costs too. The reason most circuits provide the standard Zip single or twin engined kart is that they are bullet proof and reliable (remember who’ll be driving them!!!)
MARKET
Who are you targeting? Biggest spenders are corporate entertainment but to attract this market you’ll need catering (which you could end up making more money from than the hire of the karts). You also need to think about who you will be up against in this market – paintball, laserquest, bowling….all considerably cheaper so think about how you can add value.
FUNDING
Unless you have collateral and/or more than half of what you need, then no bank will loan you the money. Venture Capitalists might if you have a rock solid business plan but don’t expect to retain full or even majority ownership of the business. Remember that profit is correlated to risk. If you’re taking the lesser risk then expect a lesser cut.
YOUTH
Don’t let anyone say you are too young to do this. Youth is a powerful tool and you are blessed with the fact that you have nothing to loose. To be honest, you have slightly less than zero chance of making this happen BUT – you should strive to prove me wrong and even if you don’t, what you’ll learn along the way will be just as important as one day, you WILL do it.
Good luck!
stuthemong said:
!!!!!INSURANCE!!!!!!
I dread to think how much it will be, probably your biggest expense after the karts ESPECIALLY if you want to give balls out 90mph karts to noobs.
Daytona et al. do this stuff *very* well. The premesis + staff +tracks ... everything you mention is top draw.
My initial thoughts on this are that you are not stepping into an empty market space with a USP of fastest karts out there, there is probably a reason why daytona give you 60mph karts and not faster ones - probably insurance / repair costs.
The problem with karting is you need a karting track.
I went to a farmers field once to go Quad biking / scrambling. This was mint, really good fun, and the setup costs must have been massively lower as you don't need a track built. Maybe put some thought in trying a lower risk venture. Try to find some land, and get a few quads or something. Setup will be a fraction of what you propose, and if the business is working, you can look to build your karting track on there in the future.
I just think you should walk before you run, you are probably bored of people telling you you are young, but trust me, I have progressed more in the last 3 years than in the previous 23 combined.
FWIW, expect to pay about 1K/month for a decent workshop, and similar amounts on business rates (elec+council tax etc.etc..) - I think that that is a fair ballpark.
Good luck, keep bouncing ideas off here as you are, it will stand you in good stead. By all means do what you want of course, this is just my take
That is an awesome idea...I dread to think how much it will be, probably your biggest expense after the karts ESPECIALLY if you want to give balls out 90mph karts to noobs.
Daytona et al. do this stuff *very* well. The premesis + staff +tracks ... everything you mention is top draw.
My initial thoughts on this are that you are not stepping into an empty market space with a USP of fastest karts out there, there is probably a reason why daytona give you 60mph karts and not faster ones - probably insurance / repair costs.
The problem with karting is you need a karting track.
I went to a farmers field once to go Quad biking / scrambling. This was mint, really good fun, and the setup costs must have been massively lower as you don't need a track built. Maybe put some thought in trying a lower risk venture. Try to find some land, and get a few quads or something. Setup will be a fraction of what you propose, and if the business is working, you can look to build your karting track on there in the future.
I just think you should walk before you run, you are probably bored of people telling you you are young, but trust me, I have progressed more in the last 3 years than in the previous 23 combined.
FWIW, expect to pay about 1K/month for a decent workshop, and similar amounts on business rates (elec+council tax etc.etc..) - I think that that is a fair ballpark.
Good luck, keep bouncing ideas off here as you are, it will stand you in good stead. By all means do what you want of course, this is just my take
Edited by stuthemong on Tuesday 27th May 23:17
Those Honda Pilot buggies are amazing fun... you could set up a race league with them on a dirt track (That'll cost you the land, a porta-kabin for an office/briefing room, a few cones, rent the buggies, a bit of fuel and insurance. Don't need to bother with race suits either, just helmets!)
Now this is something you should look at!
Mike,
I was thinking about this more last night, and know of one REAL USP that could be brought into the world of pay as you drive go karting.
Proper handicapping and comparable karts. The biggest problem with karting is heavy people get screwed, and people on crap karts get screwed.
The BIGGEST gripe I have with Daytona is that the karts are all quite different in speed. "They are all the same speed sir". My ass. After paying £100+ quid for a 1hr endurance after a mornings karting, I couldnt get withing 2 seconds of my fastest time in the morning. I came in and shouted at the guy that I need another kart, eventually we got one and it was much faster, although not as fast the morning one - at least I wasnt being overtaken every straight. If you can promise all the karts you have can lap within 0.1 or 0.2 seconds of eachother, the racing would be more fun IMO as you remove that variable.
If you had some sort of decent ecu on the karts that enabled you to dial the wick down slightly on them all, a dyno that got curves from the lot of them, and a 'base curve' you try to hit - meaning you can tune the karts to within a couple % power of eachother it would be FANTASTIC. Have plots of the power every week or something, a bit of work, but it would give me faith that it was me, and not my kart that meant I was getting beat. I don't know if this is possible, but I tell you that the one time I got shafted on a crap kart in Daytona it really made me angry and not want to go back, real waste of £100.
The other prong to this idea is weight penalties. Within reason, find the biggest guy in the group, weigh him, then load the other drivers up with weight to even out the field.
This again would make the racing fairer and tighter. It would take a lot longer to set the karts up to do this (prolly 30 mins or so), but people may be williing to pay for a handicapped race, I Think it would make it a lot more fun.
Anyway, these two things are the only things I'd change about Daytona if I could, so may be worth considering.
As King Richard says, think of this in terms of a longer term plan, try to build something up first IMO, and do not underestimate the cost of advertising to get initial traffic into your site in the first year, leave enough in the kitty whatever you do
I was thinking about this more last night, and know of one REAL USP that could be brought into the world of pay as you drive go karting.
Proper handicapping and comparable karts. The biggest problem with karting is heavy people get screwed, and people on crap karts get screwed.
The BIGGEST gripe I have with Daytona is that the karts are all quite different in speed. "They are all the same speed sir". My ass. After paying £100+ quid for a 1hr endurance after a mornings karting, I couldnt get withing 2 seconds of my fastest time in the morning. I came in and shouted at the guy that I need another kart, eventually we got one and it was much faster, although not as fast the morning one - at least I wasnt being overtaken every straight. If you can promise all the karts you have can lap within 0.1 or 0.2 seconds of eachother, the racing would be more fun IMO as you remove that variable.
If you had some sort of decent ecu on the karts that enabled you to dial the wick down slightly on them all, a dyno that got curves from the lot of them, and a 'base curve' you try to hit - meaning you can tune the karts to within a couple % power of eachother it would be FANTASTIC. Have plots of the power every week or something, a bit of work, but it would give me faith that it was me, and not my kart that meant I was getting beat. I don't know if this is possible, but I tell you that the one time I got shafted on a crap kart in Daytona it really made me angry and not want to go back, real waste of £100.
The other prong to this idea is weight penalties. Within reason, find the biggest guy in the group, weigh him, then load the other drivers up with weight to even out the field.
This again would make the racing fairer and tighter. It would take a lot longer to set the karts up to do this (prolly 30 mins or so), but people may be williing to pay for a handicapped race, I Think it would make it a lot more fun.
Anyway, these two things are the only things I'd change about Daytona if I could, so may be worth considering.
As King Richard says, think of this in terms of a longer term plan, try to build something up first IMO, and do not underestimate the cost of advertising to get initial traffic into your site in the first year, leave enough in the kitty whatever you do
Edited by stuthemong on Wednesday 28th May 11:16
I hate to say it but with the lending climate what it is at the moment, you wont get what will be a comparatively huge loan no matter how sparkling your business plan without putting a substantial amount in yourself and underwriting the banks liability with hard assets.
Even if you were to underwrite the entire loan with a directors guarantee I'd say that banks will remain relatively circumspect.
Your outlook and approach are highly commendable but I'd perhaps be looking at a startup that you can work on that will keep lending to an absolute minimum and unless your surname is Goldsmith doing this with a Karting concern will be hugely difficult.
Even if you were to underwrite the entire loan with a directors guarantee I'd say that banks will remain relatively circumspect.
Your outlook and approach are highly commendable but I'd perhaps be looking at a startup that you can work on that will keep lending to an absolute minimum and unless your surname is Goldsmith doing this with a Karting concern will be hugely difficult.
With regard to funding someone mentioned a venture capital firm. My personal opinion is that they wouldn't touch it all, they tend to look at bigger value transactions. They would be interested once you get to say two or three sites and want to roll it out nationally.
You would need a business angel, very difficult to come by or family/friends to give you enough equity to make a bank interested.
Good luck though you are certainly asking the right questions and thinking it through properly.
You would need a business angel, very difficult to come by or family/friends to give you enough equity to make a bank interested.
Good luck though you are certainly asking the right questions and thinking it through properly.
Mike,
I, too, like daydreaming about setting up a business or buying one. I have read this thread with interest.
I can't really add to the good advice that's been posted above. The only thing I would say to reconsider is your location. Bath is not really "readily accessible" from the motorway as it only has one "main" road linking it to the M4. I used to live in Bristol and commute to bath a fair bit with work and it was a real pain in the @ss to get in and out of. Bristol might be a better option. It has the M32 and really is readily accessible from the motorway. No idea what the comparable rental there is though.
All the best mate.
Ben
PS - we went go-karting with work once and it was down by Cheddar, is that your place?
I, too, like daydreaming about setting up a business or buying one. I have read this thread with interest.
I can't really add to the good advice that's been posted above. The only thing I would say to reconsider is your location. Bath is not really "readily accessible" from the motorway as it only has one "main" road linking it to the M4. I used to live in Bristol and commute to bath a fair bit with work and it was a real pain in the @ss to get in and out of. Bristol might be a better option. It has the M32 and really is readily accessible from the motorway. No idea what the comparable rental there is though.
All the best mate.
Ben
PS - we went go-karting with work once and it was down by Cheddar, is that your place?
benhunt said:
Mike,
I, too, like daydreaming about setting up a business or buying one. I have read this thread with interest.
I can't really add to the good advice that's been posted above. The only thing I would say to reconsider is your location. Bath is not really "readily accessible" from the motorway as it only has one "main" road linking it to the M4. I used to live in Bristol and commute to bath a fair bit with work and it was a real pain in the @ss to get in and out of. Bristol might be a better option. It has the M32 and really is readily accessible from the motorway. No idea what the comparable rental there is though.
All the best mate.
Ben
PS - we went go-karting with work once and it was down by Cheddar, is that your place?
Hi Ben,I, too, like daydreaming about setting up a business or buying one. I have read this thread with interest.
I can't really add to the good advice that's been posted above. The only thing I would say to reconsider is your location. Bath is not really "readily accessible" from the motorway as it only has one "main" road linking it to the M4. I used to live in Bristol and commute to bath a fair bit with work and it was a real pain in the @ss to get in and out of. Bristol might be a better option. It has the M32 and really is readily accessible from the motorway. No idea what the comparable rental there is though.
All the best mate.
Ben
PS - we went go-karting with work once and it was down by Cheddar, is that your place?
Nope, not down in Cheddar
Thanks
Mike
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