📊 Market Research
Local Market Analysis
Strasbourg is a city in the northeastern part of France, with a population of approximately 280,000. It is known for its rich history, architecture, and diverse population, attracting many tourists each year. The region offers various recreational activities, such as outdoor sports and leisure, which indicate there may be an interest in a go-karting venue among locals and tourists alike.
Target Audience
Our primary target audience includes:
- Families with children aged 10 and above, looking for a fun and engaging activity
- Go-karting enthusiasts seeking a new, high-quality track in the region
- Corporate groups seeking team-building activities and events
- Tourists interested in recreational activities during their visit to Strasbourg
Competitor Analysis
At present, there are limited go-karting venues in the Strasbourg region, most of them being indoor karting tracks. The introduction of an outdoor go-karting track would provide a new and differentiated offering to this market.
💰 Startup Costs
The following are the estimated initial investments required to set up the go-karting track:
Real Estate: Since we already own a 2000 sqm terrain, there will be no need to incur any additional real estate costs, as the subsequent construction costs will be included in the facility's setup and construction.
Facility Setup and Construction: $150,000 (including track, spectator areas, and snack bar)
Go-Kart Equipment: $70,000 (20 vehicles at $3,500 each)
Inventory (Helmets, Suits, Gloves, etc.): $7,500
Initial Marketing Expenses: $10,000
Total Startup Cost: $237,500
💵 Revenue Projections
The monthly revenue generated will be based on the average number of visitors, price per ride, and additional revenue streams such as the snack bar and group events.
Assumptions:
- Average Price per Ride: $20
- Average Monthly Visitors: 1,750
- Snack Bar and Additional Revenue: 25% of ride revenue
Total Monthly Revenue: $38,500 (including snack bar and additional revenue)
Annual Revenue: $462,000
📑 Operating Expenses
- Rent: $0 (We own the terrain)
- Utilities: $1,500 per month
- Staff Salaries: $12,000 per month (2 managers, 4 track employees, 2 snack bar staff)
- Insurance: $700 per month
- Facility Maintenance and Repairs: $1,000 per month
Total Monthly Operating Expenses: $15,200
Annual Operating Expenses: $182,400
📈 Breakeven Analysis
- Annual contribution margin: excluding estimates for indirect costs ($462,000 - $182,400) = $279,600
- Breakeven Point: Startup Costs / Annual Contribution Margin = $237,500 / $279,600 ≈ 0.85 years or approximately 10 months. At this point, we'll have sold approximately 11,875 rides.
💼 Funding Options
- Personal Savings: Lower interest rates, faster access, might not cover full startup costs.
- Bank Loans: Access to larger funds, possible lower interest rates, requires good credit, increases debt.
- Investors: Provide funds and expertise, dilutes ownership, may have differing goals.
🚧 Risk Analysis
- Weather: Heavy rain and extreme temperatures might cause temporary closures; invest in weather-proofing facilities or offer alternative indoor activities.
- Safety Incidents: Maintain industry-standard safety measures and provide appropriate training to staff.
- Market Fluctuations: Diversify the target audience and expand into other family activities and events.
🔍 Financial Performance Metrics
- Gross Profit Margin: Evaluate the overall profitability of the business after direct costs.
- Net Profit Margin: Determine the overall profitability after considering all expenses.
- Return on Investment: Evaluate the efficiency of investments made.
- Breakeven Point: Track when the business becomes profitable over time.
This analysis provides an overview of the estimated financial performance of the proposed go-karting venue. It is essential and necessary to continually review and adjust the business's operation based on monitoring the performance metrics and market conditions.