Do you want to build a race track and want to know the cost breakdown? If YES, here are factors that determine the estimated cost of building a race track.
Let’s imagine you overhear group of friends talking about the sweet competition at their private club, the health hazards on the course’s back half, or the $85,000 initiation fee, you won’t need a soothsayer to tell you they are talking about golf.
But your very own track offers many of the same appeals as a traditional country club. In those tracks, you test and exhibit your skills against friends, and then brag about it later. MMC is renowned as one of the first private tracks in the U.S., established in 2008 right at the brink of the recession.
For some time, the model and business plan seemed destined to fail. But today MMC has over 480 members who frequent the 4.1-mile road course, with current initiation fees costing up to $90,000 for unlimited driving days. Starting a business like MMC or building a race track isn’t unlike any other type of industry.
Almost every entrepreneur have to go through crucial business phases to ensure their enterprise is running successfully.
Building a race track is not for the fainthearted because it swallows up massive resources. It is always advisable you talk to everyone you can reach who is already in the race track or private club business, and learn what you can from their successes and failures.
Most successful business owners appreciate the chance to share their knowledge with those who won’t have a direct impact on their bottom lines. So, do your research to learn which individuals can provide you with the most insight, and make contact.
You should also consider buying an already existent track. Agreeably, it is the desire of most entrepreneurs to start fresh, to build their own tracks from the base level. However, it is in your best interest to acquire a track that already has proven operations and regular revenue.
Note that buying a successful existing track will allow you get around the trial and error phase. Do not also forgo the option of being part of a franchise. Joining a franchise can help avoid failure.
Estimated Cost of Building a Race Track
The interesting aspect of race tracks is the cost involved in building a standard one. It will cost at least $7 million to build a standard race track in the United States. According to research, it generally costs around $100,000 per mile for two-lane pavement.
But have it in mind that two lanes aren’t nearly wide enough for a racetrack. Therefore, envisage a $200,000 per mile minimum in order to build a racetrack four lanes wide. You would want your drivers to drift sideways without going off the road; you would want a safe track and other amenities that will attract your target market.
It is quite easy to understand how a simple four-mile paved racetrack would exceed $1,000,000 – and that is even before the cost of buying the land and maintaining the pavement. Also remember that pavements have a limited lifecycle and you can’t afford to have potholes on your racetrack due to substandard construction.
According to a specific report, the start up costs of a well-arranged race track in the United States is about $7 million. These expenses break down as follows:
- Cost of land: $1.29 million
- Cost for construction (e.g. Landscaping, gravel runoffs, tire walls, grading, banking curves, adding hills, etc.): $2.4 million
- Cost for mechanical and electrical works (e.g. Full close circuit TV, Crowd protection fence etc.): $523,000
- Cost for site finishing (e.g. stands, external fittings, etc.): $109,000
- Cost of equipment and needed amenities (e.g. office blocks, paddock, parking lots etc.): $1,080,000
- Cost of design and project management (including salaries of project managers): $255,000
- Legal Fees (e.g. Taxes, insurance, permits etc.): $1,128,000
- Project development costs: $215,000
Although it may be tempting to reduce a race track’s start-up expenses by making concessions on construction or technology costs, properly constructing a track and using high-quality technology will without doubt keep ongoing expenses on the hook and affordable.
Note that reducing these upfront expenses can lead to prohibitively expensive ongoing costs because the tracks will require more maintenance.
Indeed a single location can have more than one track. Nonetheless, a race track requires a team of employees and subcontractors.
People are needed from the outset to welcome drivers, maintain the track and repair any malfunctioning equipment. A track may also want to work with driving schools and tutors to set up its own driving school and offer specialized services.