Starting a business?

Question

I want to start a slotcar racing business where people come in and either rent a slotcar from me or bring their own and rent time and a hand controller and track time from me. I will rent by the half hour or hour. There is nothing like this in the area I live in. I remember as a young boy doing this with my dad and it was very popular. I would also like to start having tournaments doing this as it catches on.
Aside from checking with my city and getting the proper business
liscense, what would be the best way to promote this type of venture? I live in a city of just over 100,000 people. How should I figure my rental rates? I dont plan on doing this as a full time job, more as a hobby type business with the possibilty of it growing larger.

Answer 1

In my humble opinion, there is almost no way a town of 100,000 would have enough people interested in this to support a business. If you don't expect to make money at it, then you are doing it because you want to and you will not get any tax benefit from it either. So, unless you just have money to burn, you and a few friends should just take a vacation a few times a year to a place where they have this type of activity. It would be cheaper than losing money all year long. Sorry, I don't mean to discourage you. Perhaps there are enough people in 100,000 that want to do what you want to do. If you know enought of them, then perhaps you can all become "partners" in the business so no one will lose too much. Bottom line....don't do it if you don't want to make money at it. Go on vacation instead. Maybe it is because I have never had "too much" money, but I do tax returns for people that lose hundreds of thousands of dollars in stock "trading" year after year. I don't know why anyone would "work" at losing money. Vacations are much more fun. But that is just me. Good luck.

Answer 2

First the downside: These businesses rarely make it. Most people dont know what fun slot cars are and so they wont come through your door. Therefore it take a lot of money in advertising this type of venture.
You would think that population can keep this business a float but in reality you need to think about how many would come in. What is your target age? Maybe 13-29? If so, what portion of your population is this age? Those are the one that may come in. And I say MAY. Take that figure and figure out 10 to 12%, this is your target. If you can advertise to get these in and support you coming in at least once a week then you may keep in business.

Most people do not realize the amount of money it takes to keep the doors open. Each business is different but all have to off-set these bills:
rent/lease
insurance
equipment
advertising
untilites
interior construction costs of space
business licence
employees
State and Federal Tax and Employee Taxes

You need to figure out the size of building you need and you will be renting by the square foot. I will imagine at least 1,000 to 1,200 sq ft. Cost to rent can be so much per square foot (like $1.00 per sq ft) and every city is different. Look in you local papers classifieds for ideas on rent or lease. Rent may be best for you right now as if you get tied into a lease and the business does not make it you will be stuck paying off the remainder of the lease.
There are ways to see if the community is interested in this type of venture by cold calling or survey in front of a supermarket (get permission first). Just because you are interested does not mean others in your community will be.
In the city I used to live in of 30,000 people plus the seasonal people of about 25,000 (winter and summer). We had one of these go in and it lasted a year but the owner never made any money and when he closed the doors he owed everyone money. If was fun to say I have a business but to make a living at it is hard and even to break even.

If I was going to do this I would combine it with a Hobby Shop with things for sale to attract the Hobby Enthusiast. Like Model
Rockets, cars, planes, toys, etc. Once you get the customer to come in and buy hobby items they will get interested in the slot cars. They go hand in hand. And then you can ofset some of the cost of doing business.

Good Luck

Answer 3

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