So You Want to Own Your Own Race Team…
If you’re a driver with visions and goals of participating in pro racing, and especially if you’re climbing the ladder to the top, it’s big business. Ten years ago, my good friend Bruce Cleland and I wrote the book Speed Secrets 5: The Complete Driver. In it, we covered how to make a career out of racing, and one topic we covered has come up again and again: whether or not to start and run one’s own race team. – Ross
Before you jump into race team ownership, here are a few factors for your consideration:
- Ask yourself what your objectives are in running your own team. Are they to make a profit? Are they simply to give you more control? Is it to see your own name on the team’s equipment and entry? Is it to benefit you or someone else? Are there reasons you think this approach will help you win more often? If so, what are they?
- Ask yourself if you want to be a team owner/manager or a driver? Which is most important? And even if driving is the priority, how much do you want to drive? Is it a little more important or a lot more important?
An important consideration when deciding between renting a ride with a team or starting and running your own is what to do with the car and equipment when it’s time to move up to the next level. More than one driver has had his career stunted by the inability to sell his current car to afford to move up to the next series level. If you’ve invested in a lot of equipment (trailer, tow vehicle, pit equipment, tools and car) for one series and you want to move up to the next, will you need to sell this equipment before doing that? And if so, how difficult will that be? Will it delay your ability to move up, or at least restrict your flexibility to take advantage of an opportunity?
Having all their capital locked up in equipment that cannot be sold off in time has cost many drivers an opportunity that could have made a big impact on their career. Think about it. Plan ahead.
Speaking of capital investment, what equipment will you need to invest in? Will you need to buy a car or cars, trailer, tow vehicle, tools, and other equipment? Will you need to invest in a shop to work out of? If so, what else could that capital be used for? Could it be used to hire a marketing person to develop some sponsorship opportunities? What are you really investing in? A team with your name on it or your driving career?
An important piece of business advice goes like this. Seven out of ten problems in business are:
In other words, the biggest challenge in building and running a successful business is the people involved. (If you’re wondering what the other three are, it doesn’t matter. If you select and manage your people well, everything else is easy!).
Running a race team is no different. People are the key to a winning team. So, a critical challenge you will face in building and running your race team will be to select, attract, hire, and then manage the right people. If you think shaving that last tenth of a second off your lap time is difficult, wait until you select and manage your race team personnel!
Budgeting is obviously an essential piece to successfully operating your race team. If this has never been one of your personal strengths, perhaps running a team is not meant for you.
There are too many details to list here about how to build and maintain a budget for a team, but a good rule of thumb is to make your best estimate of the total cost for the season, then add another 50 percent. Unless you have a lot of experience budgeting for the specific series you’re going to be running, and you are good at managing to a budget, the plus-50 percent rule is a minimum.
Every single team owner has at one time underestimated what it took to build and run a successful team. Obviously, it can be done – with some with great difficulty – but for every one of those, there are hundreds who are not successful. And every one of the successful ones have taken more work, more money, more great people… more of everything than the owner originally planned.
Be realistic. Since a focus here is on the driver – your driving abilities and career – it only makes sense that you would want to focus on what’s best solely for your driving performance. Operating a race team will take focus away from the development of your driving skills and from your career development. That is a fact.
Sure, there are advantages to building or operating your own race team. If you’re like most racers (who can be so passionate about the sport, they become overly optimistic), you’ll have no problem seeing the benefits, such as the control you’ll have, the investment in equipment that you may be able to recoup someday, and so on. But the challenges and downside of taking this approach are difficult for most racers, and that’s why it’s a good idea to take the time to consider the above points. All of the advice here comes from many, many others’ experience, so it’s real.
Have I discouraged you enough to abandon your ideas of becoming the Roger Penske of whatever series you’re racing in? I hope not, because team ownership can also be fun and rewarding. What I hope I’ve done is made you aware of things you must think about before jumping into the race team ownership business.
– Bruce Cleland