Ohhh my days Dom, this is a rabbit hole. You wanna follow me down it? Take my hand and lets go!! My ramblings are just what I’ve learned and figures I’ve set, I’ll try to explain my reasoning so try to keep up lol
First thing you want to look at is market size.
TAM - total available market, this should be around the 1m figure, we’re talking about catchment area population as a whole which is basically your addressable market - everyone you’re going to be advertising to. Since we all know kids can start karting from 3 yrs old and there are folks here in their 90s still racing, your TAM is pretty much everyone.
SAM - Serviceable Addressable Market - how much of that total market can you realistically expect might want to come to you and have the means. Take away over 70s and under 3s, plus whatever the local unemployment rate is. OK guys still race past 70 but not often, you need to draw a line somewhere for assumption making, I drew it at 70.
SOM - Serviceable Obtainable Market. How much of whats left do you expect to actually capture? From my research, take 35% of the 4-25 yr olds because this is essentially your core market. 10% of the 25-35 year olds because around 25 many guys and gals go off and get married, have kids etc so their disposable income and time is reduced for a few years. 25% of the over 35s, those who were your customers before they got married some will come back as a family here, some won’t because the kid(s)/wife just plain aren’t interested.
Set-UP costs depend entirely on what you want to build. I’m fortunate in that I don’t need any major ground works or construction, Single level track, brand new premises, the guys just have to come in, paint the floor and put down some barriers. Under 400k. Outside tracks I haven’t looked into that much but I’d say anywhere between 1-3m for construction if nothing is there already.
Karts…again big variation. Latest gen Sodi RSX2 electric karts with Lithium batteries run at around $14k EACH, and remember for electric you need to double up - for every kart you wnat to have on track you need another one on the charger. Thats the bulk of my cost at just under $600k. Petrol karts are pretty much half that and you need half as many, but then you need to consider ventilation if you’re indoors, plus fuel costs and engine rebuilds etc. Electric is virtually maintenance free, bearing lubs and swap primary / secondary batteries over every month thats about it. Motors are brushless induction - nothing to do on them.
Work out your costs - I can share a pretty detailed template if you want to really study it and work it out, depends how far down the rabbit hole you want to go.
Revenue - yeap weekends are your bread and butter. The challenge is to fill in early and midweek track time, here’s where you target corporations. Corporate events, team building etc - build a team building event platform you can sell. I did a case study on a centre in France - Only Kart Lyon - visited them last year with my daughter on our way back from the Alps. They targeted corporations and have been so successful with that they have to now close to the public 2 days every week just to accommodate their corporate bookings. If you can do that, you’re made.
I’m close to the line, company was incorporated couple of weeks ago so now I’m officially applying for the export financing from France. If they say yes then I’ll be up and running by the end of this year.