So you want to get rich owning a motocross track

Dano762

Dano762

PR Addict
Let's build and run a new motocross business, PitRacer's Bigdeal Motocross (PRBMX).

We can simulate running it for a couple of years and see how rich we get.

We can pretend we have no competition from other tracks for riders or race date conflicts. We can also pretend the day we open we have big attendance and don't have to work for years to grow our product, reputation, and customer base. Of course nobody will ever say anything bad about us on SocialMedia to drive customers away.

I am an optimist and this is going to be a big, big success. I can smell retirement and selling for a huge profit when we get worn out from the long days.

First we need a business plan to get the money to start. Unless we have a bunch of money saved we probably need a loan to start the business and I bet banks are jumping on the chance to finance a motocross track business.

List the initial costs, ongoing costs, estimated federal, state, and local taxes, insurance, employees, etc.

Next list the money we make from practices, races, gate fees, concessions, and any other way we can make money. How many races can we hold a year and how many practice days can we have.

We can do some math and build a pro forma income statement. I know there are enough business owners on PitRacer to advise us.

Getting Started costs
  • Upfront Cash
  • Land purchase (maybe your lucky and have the right amount of land in the right place)
  • Track design fees (can't build a crappy track and get roasted on Social Media)
  • Tractors, Skid Steers, Watering Trucks, etc.
  • Initial construction
  • Do we need a building, bathrooms, camping spaces, and other things - don't want a Sh#thole
  • Water and sewage installation fees
  • Power installation
  • Legal Fees (incorporation, disclaimers, etc.) we will pick an LLC over an S-Corporation
  • What else?
Ongoing costs
  • Mortgage loan payment
  • Small business loan payment
  • Equipment loan payments
  • Ground maintenance
  • Track maintenance
  • Insurance
  • Taxes
  • Employee costs (wages, social security, health care, ??) how many do we need
  • Utilities (water, electric, garbage, etc.)
  • Equipment Maintenance and fuel
  • What else?
  • Do we have to pay the AMA to run a race?
Making the money (how many practice dates and race dates in Ohio's climate?)
  • Practice riders fees
  • Race entry fees
  • Gate Fees
  • Concessions
  • Accessories and supplies???
  • What else?

Get these numbers filled in and we can estimate our profits over a couple of years.
 
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Some food for thought:
1. Opening, operating, and managing any business is typically more work than a usual 9-5 for the average person. Think about it, you're responsible for the business, employees, maintenance on equipment, and making sure the customers are happy with what you're providing them in exchange for their money.
That being said, why is it such a shocker that running a motocross track would be any different? It is a BUSINESS!
2. Every business sees these struggles. Motocross tracks in ohio are just only able to be open 7 months out of the year on average. Better believe the short period of time you have to make any sort of "profit" will be stressful.
3. Building the business to be something epic takes time. Ask any business owner. Building a client base of returning customers is key to having a successful business. Money coming in is what keeps businesses alive.
4. Initial capital for any business isn't easy to get. I'm sure motocross tracks in ohio are not easy to get loans for. Unless you have a bullion dollar idea, you probably won't be approved right off the rip for any business that needs that sort of initial start up fee. I'm sure this is why some tracks are clubs or have entered in to some sort of partnership. Whether it be with someone running the track with them, or someone to rent/lease the land or equipment from.
These are just a few things I see right off the bat. I have plenty more but the list would be forever long. This may not be the reply you're looking for, I just wanted to make a point that it's not only motocross related. It's entrepreneurship at its finest, no matter what you're going in to. We all know motocross tracks aren't going to create a large revenue in a short period of time (if at all).
 
A few little things to consider, just on the racing side: Trackside Software, Radios, Computers, Signup building/Tent, Umbrellas, Flags, Chairs, Fence......lots of fence, 2 card, signs to direct people, people.....lots of people, and I'm sure I'm missing 100 things, oh yeah a starting gate. There's a ton of little things that you need to run races efficiently, many of which I didn't have in the beginning. Smart people just run practice, be like the smart people.

This could be the first time I've laughed at something on PR in a year.
 
KTrop251, thanks exactly what I am looking for.

Keep the data coming and we will be up and running in no time. Isn't it all about pushing a little dirt and collecting the money?

I am not discouraged. A quick return on investment and untold riches are coming our way for PitRacer's BigDeal Motocross. I can feel it.
 
Like a lot of business's, I'm sure there's an ample amount of cash flow, but it just flows into and right back out.
 
BriarcliffMx said:
A few little things to consider, just on the racing side: Trackside Software, Radios, Computers, Signup building/Tent, Umbrellas, Flags, Chairs, Fence......lots of fence, 2 card, signs to direct people, people.....lots of people, and I'm sure I'm missing 100 things, oh yeah a starting gate. There's a ton of little things that you need to run races efficiently, many of which I didn't have in the beginning. Smart people just run practice, be like the smart people.

This could be the first time I've laughed at something on PR in a year.
Click to expand...

All of that and people still expect a paved driveway.............
 
NQ1965 said:
Like a lot of business's, I'm sure there's an ample amount of cash flow, but it just flows into and right back out.
Click to expand...

Mike, maybe there is ample cash flow and maybe not. We have to prove it to our investors. This new track is going to be Shark Tank big!!!

I am guessing we will find out our money stream is very peaky, weather dependent, and difficult to put enough cash in reserve to cover the time during the year when the is not money flowing in.

I don't know the answer yet.
 
ktrop251 said:
Some food for thought:
1. Opening, operating, and managing any business is typically more work than a usual 9-5 for the average person. Think about it, you're responsible for the business, employees, maintenance on equipment, and making sure the customers are happy with what you're providing them in exchange for their money.
That being said, why is it such a shocker that running a motocross track would be any different? It is a BUSINESS!
2. Every business sees these struggles. Motocross tracks in ohio are just only able to be open 7 months out of the year on average. Better believe the short period of time you have to make any sort of "profit" will be stressful.
3. Building the business to be something epic takes time. Ask any business owner. Building a client base of returning customers is key to having a successful business. Money coming in is what keeps businesses alive.
4. Initial capital for any business isn't easy to get. I'm sure motocross tracks in ohio are not easy to get loans for. Unless you have a bullion dollar idea, you probably won't be approved right off the rip for any business that needs that sort of initial start up fee. I'm sure this is why some tracks are clubs or have entered in to some sort of partnership. Whether it be with someone running the track with them, or someone to rent/lease the land or equipment from.
These are just a few things I see right off the bat. I have plenty more but the list would be forever long. This may not be the reply you're looking for, I just wanted to make a point that it's not only motocross related. It's entrepreneurship at its finest, no matter what you're going in to. We all know motocross tracks aren't going to create a large revenue in a short period of time (if at all).
Click to expand...

AND if you try to keep a job, you are limited to the weekends as revenue sources. So lets say you do 1/2 of the weekends in the first year, that way you have time to fix stuff and change things frequently, which is in demand these days. so 14 weekends, 28 days of operation. Then you get rained out at least 6 days, or 15 if its 2015.....how ironic, I just realized that. Hope that trend doesn't continue.....ok so now you made it through and you were open 22 days. Now comes "the choice". Assuming you had more than 50 per day. I think at 50 plus you are making some money, not a lot once you pay everything, but some money. The choice is do you blow it on riding gear or do you reinvest that back into the facility??
 
The biggest thing you are forgetting is the 2 key people you need for success. Rarely are they the same individual.

Key person #1 .... the MX track guru. This individual knows track construction, prep and grounds needs, ie parking, fencing, staging and gate operations.... basically everything a racer wants for a smooth day at the races and a fun track.

Key person #2 .... The businessman. This individual is a numbers guy, knows profit margins, key employees needed, running efficiently, marketing strategies, banking, sponsorship opportunities, building systems for EVERY aspect of track operations and having the key people to enact those systems properly. This individual knows how to hire the key people to run the operation smoothly and give up micromanagment. This individual doesnt work in the track business, they work ON the business by creating systems that are constantly upgraded for efficiency. They build the character of the team of employees by getting them personally invested in the track.

As in almost all small business, the owner starts out as a person who knows the business they start because they were a worker or participant. Rarely are they true business people who are able to be Key person #2.

So if we are truly going to make money at this you need both those people at the helm. And to get quality people in those 2 positions you need to think about compensation for them, it wont be cheap unless you want a $hithole.

Once these two people are in place then you can start the rest of your plan.
 
BriarcliffMx said:
AND if you try to keep a job, you are limited to the weekends as revenue sources. So lets say you do 1/2 of the weekends in the first year, that way you have time to fix stuff and change things frequently, which is in demand these days. so 14 weekends, 28 days of operation. Then you get rained out at least 6 days, or 15 if its 2015.....how ironic, I just realized that. Hope that trend doesn't continue.....ok so now you made it through and you were open 22 days. Now comes "the choice". Assuming you had more than 50 per day. I think at 50 plus you are making some money, not a lot once you pay everything, but some money. The choice is do you blow it on riding gear or do you reinvest that back into the facility??
Click to expand...
And the vicious cycle continues.. invest, revenue, reinvest revenue. The good ol money cycle. Cash flow looks good but that money needs to be reinvested for the following year.. or 22 practices next year. You're absolutely right when it comes to your opportunity to be open each year. Weather, illness, equipment breaking down. It's a full time job with part time benies.
 
hershey said:
The biggest thing you are forgetting is the 2 key people you need for success. Rarely are they the same individual.

Key person #1 .... the MX track guru. This individual knows track construction, prep and grounds needs, ie parking, fencing, staging and gate operations.... basically everything a racer wants for a smooth day at the races and a fun track.

Key person #2 .... The businessman. This individual is a numbers guy, knows profit margins, key employees needed, running efficiently, marketing strategies, banking, sponsorship opportunities, building systems for EVERY aspect of track operations and having the key people to enact those systems properly. This individual knows how to hire the key people to run the operation smoothly and give up micromanagment. This individual doesnt work in the track business, they work ON the business by creating systems that are constantly upgraded for efficiency. They build the character of the team of employees by getting them personally invested in the track.

As in almost all small business, the owner starts out as a person who knows the business they start because they were a worker or participant. Rarely are they true business people who are able to be Key person #2.

So if we are truly going to make money at this you need both those people at the helm. And to get quality people in those 2 positions you need to think about compensation for them, it wont be cheap unless you want a $hithole.

Once these two people are in place then you can start the rest of your plan.
Click to expand...
Key person# 3-? An understanding wife and kids that know you will get home from job 1 and begin said job till dark.
Key persons 4-? Reliable peeps to help mow, weedeat, trash collection, prep track, flag, stage, score, work entrance, hang banners lotsa banners, pennants, extra equipment on hand for when number ones break, lotsa beer.
 
Ok, so Dano, where's this put us at?
I see that there's an element of responsibility because so much has been spent, invested and it's all on the line now. The stress is building.

Actually, you stumped me at:
  • Upfront Cash... ?????????
  • Land Purchase....????????
:D
 
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Its a surefire way too get a SMALL fortune...........

Start with a BIG fortune, and open an MX track
 
NQ1965 said:
Ok, so Dano, where's this put us at?
I see that there's an element of responsibility because so much has been spent, invested and it's all on the line now. The stress is building.

Actually, you stumped me at:
  • Upfront Cash... ?????????
  • Land Purchase....????????
:D
Click to expand...
Mike, on a long flight crunching the numbers. Answer by midnight.

Bigdeal MX is going to be HUuuuuuuuge.

Found 63 amazing acres with natural elevation changes and prime soil. Seller accepted $5200 an acre so less than the average land price in Ohio of $6000 per acre. It only cost us $327,000 to buy the land.

We will add 2 GPs to our race schedule.

Thanks to a great GoFundMe campaign we raised $100,000 to get us started.
 
Dano762 said:
Mike, on a long flight crunching the numbers. Answer by midnight.

Bigdeal MX is going to be HUuuuuuuuge.

Found 63 amazing acres with natural elevation changes and prime soil. Seller accepted $5200 an acre so less than the average land price in Ohio of $6000 per acre. It only cost us $327,000 to buy the land.

We will add 2 GPs to our race schedule.

Thanks to a great GoFundMe campaign we raised $100,000 to get us started.
Click to expand...
image.png
 
Our fortunes are getting closer and we caught a few breaks.

New Zoning regulations forced Dustbite MX to close because a noise adverse soccer mom had an affair with a woman on the county zoning and planning board - there is a video.
  • We bought out Dustbite MX and got most of the stuff we needed at a deal: water trucks, starting gates, tractors, skid steers, software, flags, etc. for $82,000.
  • An Amish crew put our building up with concessions, showers, and nice bathrooms for $75,000.
  • Fencing is 838 feet per acre and we fenced 15 acres for $8 per lineal foot (a deal) = $100,560 - lawyers and zoning wouldn't let us open without fencing.
  • Driveway and Parking (gravel) $30,000.
  • We kept all our other start up costs permitting, noise tests, EPA, utility connections, lawyer business formation and waiver prep fees, accounting fees to $20,000.
  • Build 2 tracks: Big bike track and a kids track $25,000.
  • $332,000 Costs besides land
  • $327,000 Land
  • $650,000 Startup costs - even if I am over estimating by double it is a big investment at $325,000 (how much would an up and running track cost in Ohio?)
Loans and Mortgages - remember we had $100,00 start up cash.

  • $2,800 Monthly business loan payment for stuff besides land
  • $1,800 Mortgage and taxes on Land
  • $4,600 Total monthly payment before we open the doors.
Next post the money we bring with practice and races and the profit we make.
 
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