How to Start a Racetrack

A racetrack provides racing enthusiasts and gear heads a place to live their dreams of auto racing glory. You can choose to buy an existing track, or build your own. Your racetrack can exist as a dragstrip, road course, standalone business, or as part of a larger entertainment complex, or a private auto racing club.

Learn how to start your own Racetrack and whether it is the right fit for you.

Ready to form your LLC? Check out the Top LLC Formation Services.

Start a Racetrack by following these 10 steps:

  1. Plan your Racetrack
  2. Form your Racetrack into a Legal Entity
  3. Register your Racetrack for Taxes
  4. Open a Business Bank Account & Credit Card
  5. Set up Accounting for your Racetrack
  6. Get the Necessary Permits & Licenses for your Racetrack
  7. Get Racetrack Insurance
  8. Define your Racetrack Brand
  9. Create your Racetrack Website
  10. Set up your Business Phone System

We have put together this simple guide to starting your Racetrack. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Exploring your options? Check out other small business ideas.

STEP 1: Plan your business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

Luckily we have done a lot of this research for you.

What will you name your business?

Choosing the right name is very important. Read our detailed guide on how to name your business. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.

Want some help naming your Racetrack?

Business Name Generator

What are the costs involved in opening a Racetrack?

If you are building your own racetrack, paving costs for a four lane track will be approximately $200,000 per mile. Other costs include gravel runoffs, tire walls, banking curves, landscaping, and any elevation changes. Other costs include land, construction costs, mechanical and electrical work, equipment, amenities, and legal fees

What are the ongoing expenses for a Racetrack?

Maintaining the pavement will be your largest concern. Pavement has a limited life cycle, and no one wants to hit a pothole at 125 miles per hour, so you will have to hire a road crew and build facilities for their equipment. You will also need insurance.

Who is the target market?

The target market for a stand alone racetrack will be mostly males between 18 and 60. Should you choose to run an entertainment complex, this audience would expand to families with children and the general public.

How does a Racetrack make money?

Racetrack owners can enjoy several sources of revenue ranging from track fees, car rentals, concessions, and safety equipment rental. Memberships of $60,000 per year are possible. You may find yourself renting out the entire track for a substantial fee as well.

How much can you charge customers?

Rates vary depending on the popularity and quality of your racetrack. The per day rental rate can range from $5,000 to $50,000.  Most racetracks offer open days with driver education schools that instruct your customers on how to race safely. Some tracks charge over $200 for a day of racing (with an extra charge for instruction).

How much profit can a Racetrack make?

Depending on the size and scope of your operation, profit can vary. It’s important to remember you will be making significant amounts of money from the crowd and peripheral services offered at your racetrack. 

How can you make your business more profitable?

Since customers are key to your success, providing excellent customer service will be vital. To implement excellent customer service, you need to know what you are selling inside and out. Be aware of the most frequent questions customers ask and how to answer them in satisfying ways.

Want a more guided approach? Access TRUiC's free Small Business Startup Guide - a step-by-step course for turning your business idea into reality. Get started today!

STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation.

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your Racetrack is sued.

Form Your LLC

Read our Guide to Form Your Own LLC

Have a Professional Service Form your LLC for You

Two such reliable services:

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

You can acquire your EIN through the IRS website. If you would like to learn more about EINs, read our article, What is an EIN?

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

STEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

  • Separates your personal assets from your company's assets, which is necessary for personal asset protection.
  • Makes accounting and tax filing easier.

Recommended: Read our Best Banks for Small Business review to find the best national bank or credit union.

Get a business credit card

Getting a business credit card helps you:

  • Separate personal and business expenses by putting your business' expenses all in one place.
  • Build your company's credit history, which can be useful to raise money later on.

Recommended: Apply for an easy approval business credit card from BILL and build your business credit quickly.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

STEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

State & Local Business Licensing Requirements

Certain state permits and licenses may be needed to operate a Racetrack business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.

Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

STEP 8: Define your brand

Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.

If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.

Recommended: Get a logo using Truic's free logo Generator no email or sign up required, or use a Premium Logo Maker.

If you already have a logo, you can also add it to a QR code with our Free QR Code Generator. Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.

How to promote & market a Racetrack

Racetracks have many options for promotion and marketing. Racetracks draw crowds and partnerships with existing car dealers, and auto parts stores can increase them. Sponsored track days, sponsored races, and car club meets can be useful promotions as well. Designing a viral marketing campaign that speaks directly to your potential customer can be helpful as well. Provide excellent customer service, and you will have loyal customers for life who will refer your business to family and friends.

How to keep customers coming back

Build a functional and attractive webpage. Most people use the internet when they want to find a product or service. So, simply owning a website is no longer a recommendation; it’s a necessity. An original looking website with a functional design is crucial in achieving this. If your webpage is interesting to your audience and meets their needs, they will explore more and want to do business with your company.

Marketing a racetrack can be an expensive but lucrative transaction. While a racetrack may seem like an obvious attraction, making sure consumers understand what services you actually provide and when events are taking place is important to your success.

STEP 9: Create your business website

After defining your brand and creating your logo the next step is to create a website for your business.

While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.

Here are the main reasons why you shouldn’t delay building your website:

  • All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
  • Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
  • Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.

Recommended: Get started today using our recommended website builder or check out our review of the Best Website Builders.

Other popular website builders are: WordPress, WIX, Weebly, Squarespace, and Shopify.

STEP 10: Set up your business phone system

Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.

There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2023 to find the best phone service for your small business.

Recommended Business Phone Service: is our top choice for small business phone numbers because of all the features it offers for small businesses and it's fair pricing.

Is this Business Right For You?

Owning a racetrack can be a profitable business for anyone with a background in auto sales, auto repair, retail auto parts, hospitality, or anyone with a love for racing and a passion for business and people.

Want to know if you are cut out to be an entrepreneur?

Take our Entrepreneurship Quiz to find out!

Entrepreneurship Quiz

What happens during a typical day at a Racetrack?

What happens on a typical day at a racetrack?
A typical day owning a racetrack involves reaching out to potential clients and sponsors to help fund your expensive entrepreneurial endeavor. You will be creating budgets, scheduling your calendar full of events, checking in with technicians, and generally overseeing the day-to-day maintenance of a racetrack.

On days when you have events, you may find yourself running around from spot to spot putting out fires. If you are an established brand or have a large competent team under you, you may find yourself enjoying your day observing the fruits of your labor and watching a race.

What are some skills and experiences that will help you build a successful Racetrack?

Owning a racetrack would be great business for anyone with knowledge of the auto industry (parts, service, and labor) and a solid retail background. Managerial experience can be beneficial as your business experiences growth.

What is the growth potential for a Racetrack?

Racetracks have an excellent potential for growth. With several support businesses being necessary (fuel, racing fuel, auto parts and service) you will have many options to expand to better serve your customers' individual needs. Your racetrack can also become an event destination.

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Take the Next Step

Find a business mentor

One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.

Having a support network in place to turn to during tough times is a major factor of success for new business owners.

Learn from other business owners

Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.

Resources to Help Women in Business

There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:

  • Funding
  • Events
  • Guides
  • Support

If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.

What are some insider tips for jump starting a Racetrack?

You should consider purchasing an existing track. Although most entrepreneurs want a fresh start building their own track from the ground up, it would be in your best interest to acquire a track that already had regular revenue and proven operations. Buying an existing operation will allow you to avoid the trial and error phase. Do not forget the option of joining a franchise. Joining a franchise can help avoid failure.

How and when to build a team

Building a good team of knowledgeable people will be crucial to your growth. Due to the multifaceted nature of this business, experts in several fields will be necessary, so build your team as early as possible.

You may simply want to be the investor in a racetrack as well — providing the funding but leaving the day to day in the hands of someone else. In a case like this, managers you can trust will be critical in order to run your business successfully.

Useful Links

Further Reading

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