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1. The business management decision
You really need to define what it is that you wish to accomplish. Like any business decisions, you need a plan. Be realistic.
Achieving a record or living the dream is possible, but you need to plan the path.
-What major issues do I need to address?
What vehicle do I need for the particular racing venue?
-Oval / road course / ¼ mile.
-What are the limitations to participation?
2. Tackling the big questions first. Money and Ability.
Have you ever gone to the bank to ask for a car loan? Getting a transportation loan is pretty simple.
The bank pretty much owns your car until it is paid for.
Have you ever gone to the bank to ask for a business loan? Getting a business loan is another story.
The bank will want some positive proof ( a business plan ) and a reasonable expectation that you are financially able to repay under the terms of the contract.
So how to do it. Go to the local library and take out a book on business plans. Go to the internet and research talk to your racing buddies and get some suggestions. Work through the whole process. You need to do a good job with this. Do not take someone elses plan, and just change the name.
Remember it is the planning that will make or break your dream. You need to do this for yourself.
What is a business plan?
You need to quantify and qualify your expectations. Be clear and concise about the information. Avoid using words like probably, perhaps, or might.
When you write your business plan, qualify your information using the 5 Ws What, Where, Who, Why, When
Finally quantify your plan by explaining How.
Here are 10 essentials of a business plan
1. The Executive summary provides a first impression of you and your proposal. Keep it to one or two pages at most. The summary should include the start-up cost and financing,
- your goal or objective
- background of your team (include academic courses, driving etc)
2. An Overview of how you and/or your team fit together. A general look at the structure of the business, whether you have decided on a Partnership, Sole-proprietorship, or Corporation
3. Goals and Objectives both personal and financial. They need to be attainable, measurable and most importantly realistic over a time period.
4. Industry knowledge is often overlooked in a business plan. IMPORTANT.the bank loan individual is an expert on money lending, not on racing. You need to provide factual information that demonstrates that you are who you are, and you know what you know.
5 You will need to specify a solid Money Plan. Where does it go, and how much (yes, you can estimate but dont over estimate). Think about travel and accommodations, fuel and maintenance. Spend some time with this point, it will help you to decide how much you need and how you can generate revenue.
6. You will also need to communicate an Operations Plan that details issues like, seasonal business, number of team members (full time, part time). The operations plan also needs to contain a contingency outline, in case you need to borrow more for unusual expenses.
7. In Section 2, you outlined how your business will look legally. The Ownership section gives you a chance to expand on your talents and those of your team. Emphasize strengths and abilities through a brief description of each position.
- Chief cook and bottle washer and so on.
8. In the Sources of Income Section, you need to build on what you described in the Executive summary and Money Plan. Again remember, the bank would like to lend you some cash, but they will need a reasonable expectation of collateral, so you need to set out where the cash is coming from.
9. The Historical & Future Plan will require you to make projections over a 3 year period that includes income, expenses ( yes.. you can estimate, because it is a plan, and plans can be adjusted). You should clearly identify your assumptions of financial projections.
For example, You plan to race 10 times in year #1. You plan to make back the entry fee, plus place high enough to pay yourself and your team, and make payments on the loan.
Section 9 also gives you historical backwards view on past performance, and will help you to be realistic in planning next year.
10. The final section deals with proof. Appendices or Exhibits have the documents you will need.
-letters of support
-existing financial obligations
You will also need to include Regulatory information
-WCB coverage if you employ staff
So, you think you can drive..fast. How do you know? All your buddies say so, or have you measured your ability. As part of the overall business plan, take the time to invest some of the plan finances into improving your ability.
Maybe you need to take a short course in business management. At least you should invest in yourself on a Q school or weekend training camp for new or prospective drivers. Remember, 15 minutes on the local go-kart track, or illegal street racing is not considered a training ground. ¼ mile stuff can be learned during high school sanctioned race weekends. Oval track abilities can be practiced at your local track on beginners night or rookie driver night.
You could even apprentice or volunteer to gain experience.
Remember that your ability is a component of the business plan. Therefore you need to be upfront with yourself.
What is the truth? You are not as good as you think you are.