How to Start an Indoor Go Kart Business

Do you want to start an indoor Go kart racing company? If YES, here is a 20-step guide on how to open a Go Kart business with no money or experience.

What is go kart racing all about? Simply put; Go karts are generally found in tourist destinations and large cities. More often than not, it is usually a part of a large family entertainment complex. They can also be said to serve as leisure for drivers.

There are a myriad of tracks that is available to drivers, they include; indoor, electric car facilities, loads of outdoor facilities that circle around through a field. Do note that building these tracks might not come easy money-wise because of the cost involved. As a matter of fact you may have to spend at least $100,000 for a basic track.

For an entertainment complex with other attractions you can expect to pay way higher than that amount. Please note that if you intend starting this type of business, it is advisable to first look at the existing laws and zonal regulations in the country or state you reside in to know what is expected of you.

You also need to pay a visit to the regulatory bodies in your country to know what you need to do before you can legally open an indoor go kart business in your city.

You can start your indoor go kart business from a small town in the United States and if you are good at what you do when it comes to keeping children entertained, it won’t be too long before your brand becomes a nationally recognized brand.

Steps to Starting an Indoor Go Kart Business

1. Understand The Industry

In this kind of venture, research is one of the very first steps which you need to take. This is because of the importance as well as the benefit that you stand to gain when you carry out adequate research. It is for this reason that you will need to research the internet most especially about the Go Kart racing business.

Check out the type of folks who have invested in this type of business. Also find out how is usually needed to start this business on the average. You will also need to find out if there are competitors in this field, and a whole lot more information that should be needed to help kick start your business.

Indoor go kart business is part of the Golf Driving Ranges & Family Fun Centers industry  and businesses that operate in the industry basically provide recreational and amusement services through a variety of establishments, which includes golf driving ranges, miniature golf centers, go-kart race tracks, batting cages, family fun centers, recreational sports leagues and a host of outdoor recreational activities.

It is important to state that businesses/facilities such arcades, themed amusement parks, gambling facilities, golf courses, country clubs, skiing facilities, marinas, fitness and recreational sports centers and bowling alleys are not part of the golf driving ranges & family fun centers industry.

If you have been following the Golf Driving Ranges and Family Fun Centers industry, you would have realized that the industry exhibited revenue growth in recent time, in spite of many consumers being time-strapped. While the industry struggled with mounting competition from alternative leisure activities, such as fitness, many operators generated industry revenue growth on the basis of convenience.

For example, golf driving ranges attracted time-strapped individuals, due to them being more time-efficient compared with consumers playing nine to 18 holes on the golf course.

Going forward, the revenue generated in the industry is projected to grow as operators in the golf driving ranges and family fun centers continue to enhance their product portfolios and services to attract families, regardless of their reduced time allotted for leisure and fun.

The Golf Driving Ranges & Family Fun Centers industry is indeed a very large industry and pretty much thriving in United States of America, Canada, United Kingdom, Germany, Australia and Italy et al. Statistics has it that there are about 53,308 licensed and registered golf driving ranges & family fun centers (Go Karts inclusive) scattered all across the United States.

The industry is responsible for directly employing about 156,658 employees and the industry rakes in a whooping sum of $11 billion annually with an annual growth rate projected at 4.5 percent. It is important to state that no establishment has a lion share of the available market in this industry.

A recent research published by IBISWORLD shows that during the past five years, the Golf Driving Ranges and Family Fun Centers industry exhibited growth due to many industry operators updating their facilities to attract consumers.

This investment differentiated operators’ product portfolios from other consumer leisure activities, such as at-home digital entertainment.

The report further stated that, to attract budget-conscious consumers, some industry operators implemented coupons and discounts, which generated awareness about family fun centers and golf driving ranges as a local entertainment option.

Additionally, industry operators focused on specializing their product portfolio to attract particular demographics, such as adding bowling alleys to develop a strong customer base among families with older children.

2. Conduct Market Research and Feasibility Studies

• Demographics and Psychographics

The demographic and psychographics composition of those who visit indoor go kart facilities is not restricted to children who love outdoor activities and games but also adults and their families. In essence, the demographic composition cum target market for an indoor go kart facility is all encompassing; it is not restricted to any age group, gender, race, tribe or group of people.

So, if you are looking towards defining the demographics for your indoor go kart facility business, then you should make it far reaching it should include households and families, schools, churches and religious centers, sport clubs, corporate organizations, travelers and tourists et al.

3. Decide Which Niche to Concentrate On

It is important to state that there are no niche ideas when it comes to indoor go kart facility because indoor go kart is a niche idea in the Golf Driving Ranges & Family Fun Centers industry, but players in this line of business may decide to go beyond entertaining children, to going ahead to make available video game house, bowling alley, BBQ joint, food and drinks court, ice cream shop and enough parking space so as to get parents and guardians occupied when they bring their wards to the facility.

The Level of Competition in the Industry

Irrespective of the line of business you decide to invest in, you are still going to compete with others who are into same area of business and indoor go kart facility business is not an exemption. The level of competition in the Golf Driving Ranges & Family Fun Centers industry depends largely on the location of the business, your niche area of operation and of course the capacity of your indoor go kart facility.

If you can successfully create a unique niche for your indoor go kart facility business, you are likely going to experience little or no competition. For instance, if you are the only indoor go kart facility business in your location that is operating 24 hours 7 days a week service, you can successfully monopolize the market for a long time before you start having competition.

It is important to also state that the competitions in the Golf Driving Ranges & Family Fun Centers industry is not restricted to competitions amongst indoor go kart facilities but you will be competing against all players in the entertainment and recreational industry.

4. Know Your Major Competitors in the Industry

Here are some of the most popular indoor go kart facilities in the United States of America;

• Winner’s Circle Go Karts
• Go-Karts Plus
• Pole Position Raceway – Syracuse
• Andersen RacePark
• Go Kart World
• RPM Raceway | Race Play More
• Stockholm Karting Center
• River Road Go-Kart Track
• K1 Speed – Indoor Go Karts
• NASCAR SpeedPark Smoky Mountains
• Monticello Karting and Motor Club
• S&S Speedways – Indoor Go-Karts in the Pocono’s!
• Orlando Kart Center
• LaFayette Motorsports Park
• Kartona Electric Speedway

Economic Analysis

When it comes to starting an indoor go kart facility, you just have to get your costing cum economic analysis right if your intention of building the business is to generate profits, grow the business, expand the business and start competing at national level.

When conducting costing and economic analysis for your indoor go kart facility business, you just have to critically examine these key factors; place, property, pricing, and promotion. You have to continue to review these key factors at regular intervals while running your business.

As an indoor go kart facility business owner, you just have to have a proper grasp of your competitive landscape if indeed you want to maximize profits and be in the frontline of the industry.

It is important to note that security and facility maintenance cost is one of the most important factors contributing to the overall cost of running an indoor go kart facility business and should be considered as a major factor when carrying out your costing and economic analysis.

5. Decide Whether to Buy a Franchise or Start from Scratch

There is no hard and fast rule when it comes to choosing how you intend starting a business. Basically, you should be guided by your overall business vision and mission statement. Although there are some indoor go kart facilities that are into franchising, but if you are looking towards starting an indoor go kart facility business, it will pay you to start from the very scratch because you can hardly get an affordable indoor go kart facility franchise.

Besides starting an indoor go kart facility business from the scratch might be stressful initially but it is profitable. Please note that most of the big and successful indoor go kart facilities around started from the scratch and they were able to build a solid business brand. It takes dedication, hard work and determination to achieve business success.

6. Know the Possible Threats and Challenges You Will Face

A common challenge is that many indoor go kart facilities are subject to extreme revenue volatility throughout the year. If you decide to open your own indoor go kart facility today, one of the major challenges you are likely going to face is the presence of well – established indoor go kart facilities, amusement and theme park facilities and of course other players in the family entertainment and recreational industry in your target market location.

The only way to avoid this challenge is to create your own market. Other threats and challenges that you are likely going to face when you start your indoor go kart facility are mature markets, bad economy (economy downturn), and stiff competition.

So also, unfavorable government policies, seasonal fluctuations, demographic / social factors, downturn in the economy which is likely going to affect consumers spending for leisure services such as indoor go kart facility and of course emergence of new competitors within the same location where yours is located.

There is hardly anything you can do as regards these threats and challenges other than to be optimistic that things will continue to work for your good.

7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)

Generally, you can either choose a general partnership, or limited liability company which is commonly called an LLC for your indoor go kart facility. But people prefer limited liability Company for obvious reasons. As a matter of fact, if your intention is to grow the business and welcome visitors (children) from all across the United States of America, Canada and other countries of the world, then you should choose Limited Liability Company, LLC or even general partnership. That is the most suitable legal entity for you.

8. Choose a Catchy Business Name from the Ideas Below

When it comes to choosing a name for your business, you should be creative because whatever name you choose for your business will go a long way to create a perception of what the business represents. Typically, it is the norm for people to follow the trend in the industry they intend operating from when naming their business.

If you are considering starting your own indoor go kart business, here are some catchy names that you can choose from;

• House of Fun® Indoor Go Kart Co, Inc.
• Game House® Indoor Go Kart Facility, Inc.
• Star Kids® Indoor Go Kart, Inc.
• Tim Jason™ Indoor Go Kart Company
• Fun Zone® Indoor Go Kart, Inc.
• Tom Seans® Indoor Go Kart Co, Inc.
• James Stallone & Sons® Indoor Go Kart Company
• Kids Connect® Indoor Go Kart Co, LLC
• Cloe Jones® Indoor Go Kart Co, Inc.
• Rex Greene® Indoor Go Kart Co, Inc.

9. Discuss With an Agent to Know the Best Insurance Policies for You

In the United States and in most countries of the world, you can’t operate a business without having some of the basic insurance policies that are required by the industry you want to operate from. Thus, it is imperative to create a budget for insurance and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your business.

Here are some of the basic insurance policies that you should consider purchasing if you want to start your own indoor go kart facility in the United States of America;

• General insurance
• Health insurance
• Liability insurance
• Risk Insurance
• Workers compensation
• Building/Property insurance
• Overhead expense disability insurance
• Business owner’s policy group insurance
• Payment protection insurance

You can contact the following leading insurance companies in the United States of America to purchase the needed insurance policies for your indoor go kart business;

• Allstate Insurance Group
• Liberty Mutual
• Progressive Insurance Group (PGR)
• Health Care Service Corporation (HCSC)
• New York Life Insurance Company
• Lincoln National Life Insurance Company
• MassMutual (Massachusetts Mutual Life Insurance Company)
• Northwestern Mutual Life Insurance Company

10. Protect your Intellectual Property With Trademark, Copyrights, Patents

If you are considering starting your own indoor go kart facility business, usually you may not have any need to file for intellectual property protection / trademark. This is so because the nature of the business makes it possible for you to successfully run it without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.

On the other hand, if you want to leverage on this business opportunities within the industry and also to protect your company’s logo and other documents or software that are unique to you or even operation concepts, then you can go ahead to file for intellectual property protection.

If you want to register your trademark, you are expected to begin the process by filing an application with the USPTO. The final approval of your trademark is subjected to the review of attorneys as required by USPTO.

11. Get the Necessary Professional Certification

When it comes to operating an indoor go kart facility business, you do not need to have any formal training or special certification. All you need is informal training that will expose you to the in and out of managing indoor go kart facility. On the other hand, if you come across any form of certification that can aid you to conduct your indoor go kart facility business, then by all means try and pursue such certification.

12. Get the Necessary Legal Documents You Need to Operate

It is a fact that you cannot successfully run any business in the United States without the proper documentations. If you do, it won’t be too long before the long hands of the law catch up with you. These are some of the basic legal documents that you are expected to have in place if you want to legally run your own business in the United States of America;

• DBA
• EIN
• Business and liability insurance
• Federal Tax Payer’s ID
• State Permit
• Certificate of Incorporation
• Business License
• Business Plan
• Employment Agreement (offer letters)
• Operating Agreement for LLCs
• Insurance Policy
• Online Terms of Use (if you have a website)
• Online Privacy Policy Document (basically for online payment portal)
• Company Bylaws
• Memorandum of Understanding (MoU)

13. Raise the Needed Startup Capital

Starting a standard, secured and well-equipped indoor go kart facility business is capital intensive even if you choose to launch the business on a small scale and you only have a handful of full-time employees on your payroll. Leasing of a standard facility that can accommodate your customers and staff members and of course equipping the facility are part of what will consume a large chunk of your startup capital.

In essence, if you choose to start the business on a small scale, you will still need to go source for fund to finance the business. When it comes to financing a business, one of the first things you should consider is to write a good business plan.

• Write a Business Plan

One of the reasons why writing a go kart business plan is most ideal is because you will need to have a framework of what your track’s marketing value is, its potential cash flow, safety measures that will be put in place , and other items that will help your business grow. If you are able to do this all by yourself them that is okay; otherwise you may have to hire a business plan writing expert who is able to help you pull things off.

If you have a good and workable business plan document in place, you may not have to labor yourself before convincing your bank, investors and your friends to invest in your business. Here are some of the options you can explore when sourcing for startup capital for your amusement and theme park facility business;

• Raising money from personal savings and sale of personal stocks and properties
• Raising money from investors and business partners
• Sell shares to interested investors
• Applying for loan from your bank
• Pitching your business idea and applying for business grants and seed funding from, government, donor organizations and angel investors
• Source for soft loans from your family members and your friends.

14. Choose a Suitable Location for your Business

Starting an indoor go kart facility comes with its own challenges; it is a business that cannot be started in any location. As a matter of fact, you will need approval from local council and other regulating authorities in the city you intend opening your indoor go kart business.

It is very important that you get this step rightly. It entails that you either lease a location, or out rightly buy it. However, do note that buying a building might be tantamount to excessive cost. That is why you may want to consider signing a long-term lease instead. Be sure that there is traffic there and that there is potential of expansion. In doing all these, do consider additional attractions such as mini golf, batting cages and a zip line.

Generally, in business, it cannot be overemphasized that the location you choose to start your business is key to the success of the business, hence entrepreneurs are willing to rent or lease a facility in a visible location; a location where the demography consists of children and parents (people) with the required purchasing power, and lifestyle.

If you make the mistake of renting or leasing a facility for your indoor go kart facility in a not too visible or hidden location simply because it is cheap, then you must be prepared to spend more in promoting the business. It is important to note that a business facility in good location does not come cheap hence you should be able to allocate enough fund for leasing/renting in your budget.

If you are new to the dynamics of choosing a location for your business, then you should feel free to talk to a business consultant or a realtor who has a full grasp of the city and perhaps country you intend starting your business.

Most importantly, before choosing a location for your indoor go kart facility, ensure that you first conduct a thorough feasibility studies and market survey. The possibility of you coming across similar business that just closed shop in the location you want to open yours can’t be ruled out.

Having said that, these are some of the cities in the United States of America where you can locate your indoor go kart business;

• Los Angeles, California
• New York City, New York
• Nevada, Las Vegas
• Tallahassee, Florida
• Chicago, Illinois
• Houston, Texas
• Washington, District of Columbia
• Boston, Massachusetts

15. Hire Employees for your Technical and Manpower Needs

When starting opening an indoor go kart facility, you will need go-kart racetracks and safety gadgets et al. In setting up a small office for your indoor go kart business, you will also need computer, printer, software apps, telephones, pager, photocopier, scanner, and fax machine.

These machines, tools and instrument can be purchased as fairly used especially if you are limited finance to meet your budget. When it comes to choosing between renting and leasing a facility for your indoor go kart facility, the size of the facility you want to own, and your entire budget for the business should influence your choice.

Besides, you will need a facility that is in a serene environment, a facility that is big enough to accommodate the number of visitors and staff working for you. As regards the number of employees that you are expected to kick start the business with, you need to consider your finance before making the decision.

When it comes to starting a standard indoor go kart facility business on a large scale, you would need the services of the following professionals; Chief Operating Officer (you can occupy this position), Marketing and Sales Executive (Business Developer), Accountant, Park Safety Instructor / Assistant, Human Resources and Admin Manager, Facility Manager, Customer Services Executive, Ticketers/Front Desk Officer, Security Guards and Cleaners.

Over and above, you would need a minimum of 10 to 20 key staff members to effectively run a medium scale but standard indoor go kart facility.

• Design Your Track

After you are certain to have the funds needed to start this business, then you can go ahead and commence steps towards designing your track. If you do know how to do this, then it is okay to design it all by yourself. Otherwise, you may want to consider employing the services of a professional consulting firms who are specialized in designing tracks. These experts are saddled with  determining the correct angles, ramps, as well as the area to serve as a covered pit area to check clients in and out of the track.

• Equip and Fix Things

After that has been said and done then you want to take time to equip and fix the needful things. They include; mounting guard rails to all parts nearby the track. Why is this vital? This is vital so that the go-karts can be in place in place. You may also want to consider strengthening the rails with old tires if necessary.

The Service Delivery Process of the Business

An indoor go kart facility that is ready to welcome visitors primarily children places gate fees and perhaps ticket fees. Before visitors are allowed to come in, they are expected to pay gate fee and, in most cases, they also pay to access the karts. They are usually allowed to drive the go karts for a period of time.

It is important to state that an indoor go kart facility business may decide to improvise or adopt any business process and structure that will guarantee them efficiency and flexibility; the above stated business process is not cast on stone.

16. Write a Marketing Plan Packed With Ideas & Strategies

The fact that the entry barrier for starting a small – scale indoor go kart business is not too high means that there is bound to be more players in the industry no matter the location you choose to start yours. In essence, you must come up with unique facility and other events if you must carve out a market for yourself.

So, when you are drafting your marketing plans, make sure that you create a compelling company profile. Aside from your qualifications and experience, it is important to clearly state what you have been able to achieve in time past. This will help boost your chances in the market place when marketing your park.

Here are some of the platforms you can utilize to market your indoor go kart facility;

• Introduce your indoor go kart facility by sending introductory letters alongside your brochure to religious organizations, sport clubs, children clubs, schools, corporate organizations, households and key stake holders in and around the location where your indoor go kart facility is located
• Open your indoor go kart facility services with a party so as to capture the attention of residents who are your first targets
• Print out fliers and business cards and strategically drop them in offices, libraries, public facilities and train stations et al.
• Making your first impression count positively to those making use of your indoor go kart facility for the first time
• Make use of attractive hand bills to create awareness and also to give direction to your indoor go kart facility
• Engage in roadshow in targeted communities from time to time to market your indoor go kart facility
• Advertise your services in community based newspapers, local TV and radio stations
• List your business and products on yellow pages ads (local directories)
• Leverage on the internet to promote your indoor go kart facility
• Engage in direct marketing and sales
• Encourage the use of word of mouth marketing (referrals)
• Leverage on the internet to promote your indoor go kart facility (when you blog regularly on key issues as it relates to your business, people who consider you an expert in the field)
• Join local chambers of commerce and industries around you with the main aim of networking and marketing your indoor go kart facility; you are likely going to get referrals from such networks.
• Engage the services of marketing executives and business developers to carry out direct marketing for you

17. Work Out a Reasonable Pricing for your Services & Products

One key factor that will help you offer your gate fees or services at the right price is to ensure that you cut operational cost to the barest minimum and channel your efforts towards marketing and promoting your brand name.

You can also try as much as possible to work with independent contractors and marketers; it will help you save cost for paying sales and marketing executives. So also, if you are able to secure business partnership as it relates to getting referrals, then you will be able to get the right pricing and of course maximize profits from your business.

18. Develop Iron-clad Competitive Strategies to Help You Win

The indoor go kart facility line of business is not a competitive industry, but you must come up with a unique and highly creative strategy to be able to outsmart your competitors in the industry. Part of what you need to do in order to stay competitive in the industry is to ensure that your facility is a state-of-the-art family entertainment center with multiple attractions based around fitness, games and music, with multiple revenue centers and the ability to turn customers quickly.

In other to stay competitive in this industry, you must ensure that your clients are always comfortable, secured and always ensure that you pay attention to details when carrying out your job. The truth is that if there are fluctuations in the services you provide, customers can choose to shift allegiance and settle for other options available.

19. Brainstorm Possible Ways to Retain Clients & Customers

When it comes to business, no matter the industry that you choose to pitch your tent in, one of the easiest ways to increase customer retention and perhaps attract new customers is to produce results and satisfy your customers always. If your customers are satisfied with your facility and service delivery, they can hardly source for alternative service providers.

If your services and customer service fluctuate, you are likely going to struggle to get your customers retaining your services. Ensure that you offer your customers incentives if you want to retain them and of course continue to generate repeated sales from them and also to attract new customers.

Part of what you need to do to achieve this is to track progress, results or outputs with the aim of improving on them quickly as the case demands. When it comes to managing your customers and building a loyal clientele base, you should purchase a customized CRM software.

With a customized CRM system, you can easily stay in touch with your clients (you can carry out quick surveys, you can introduce new products and prices to them without any hitch, you can felicitate with them on their birthdays and other anniversaries, you can keep track of their progress, you can send bulk sms and customized e – mails and above all, you can easily receive compliant and feedback from them).

20. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity

If you are in business and you are not conscious about boosting you brand awareness and communicating your corporate identity, then you should be ready to take on whatever the society portrays your business to be.

One of the secrets of larger corporations is that they are willing to spend fortunes year in and year out to boost their brand awareness and to continue to communicate their corporate identity the way they want people to perceive them to be.

No matter the industry you belong to, the truth is that the market is dynamic and it requires consistent brand awareness and brand boosting cum promotion to continue to appeal to your target market. Here are the platforms you can leverage on to boost your brand and create a corporate identity for your indoor go kart facility;

• Place adverts on both print (newspapers and magazines) and electronic media platforms
• Sponsor relevant community – based events
• Leverage on the internet and social media platforms like; Instagram, Facebook, Twitter, YouTube, Google + et al to promote your indoor go kart facility
• Install your billboards in strategic locations all around your city or state
• Engage in roadshows from time to time in targeted neighborhoods to create awareness of your indoor go kart facility
• Distribute your fliers and handbills in target areas
• List your indoor go kart facility business in local directories / yellow pages
• Advertise your indoor go kart facility in your official website and employ strategies that will help you pull traffic to the site
• Position your Flexi Banners at strategic positions in the location where your indoor go kart facility is located.
• Ensure that all your staff members wear your branded shirts and all your vehicles are branded with your company logo.