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PROFITS LAGGING?
TAKE A CLOSE LOOK DURING THE OFF SEASON!
By Peter F. Olesen, P.E.

The summer season is upon us and the indoor karting season is winding down. The sun is shinning, school’s out and the books don’t look as good as they should. That scenario is being played in many facilities this year. Of course, we have all the usual culprits; weather, school programs, the economy, and many other events beyond the control of the individual operator. It is easy to put the blame on things we don’t control, but does hat really explain the total drop in revenues?

TAKE A LOOK AT YOUR OPERATION
Unless you are willing to take a hard look and be honest with yourself in your evaluation, there isn’t a lot that can be done to make things better. Sometimes, rose colored glasses can be the greatest contributor to failure. If you won’t admit that you can improve your situation, the situation will certainly get worse. We suggest that the operator consider the following elements as a first step in reviewing the existing facility to improve revenues.

A. Is the facility attractive to the potential customer?
1. Site Appearance: Is the building, sign, fences, parking lot in good repair? Could your building and/or signs use a coat of paint? Is the grass mowed, flower beds tended and debris pickup around the facility?
2. Personal Appearance: Are your staff members dressed in clean uniforms or clothing? Do they look sloppy?
3. Equipment Appearance: Do your karts look beat up and in disrepair? Are your arcade games, point of sale area and snack bar clean and in good repair and presentable?
4. Customer Service: Do your staff members create a friendly, happy experience for your guests? This includes courtesy, service and an appearance of having the operation under control and giving a sense of safety awareness.

B. Inside – Do the karts, track surfaces, barriers, pits, lighting and other related track elements generate a feeling of safety? This can span bent or broken rails, sagging kart bumpers, burned out area lighting and a myriad of other items.

C. Marketing – Are you marketing the facility in a realistic manner? ‘Build it and they will come’, sound good but it only woks in movies.

D. Overall Impression – Do you introduce new items, make on-site revisions or other changes to generate new interest each year? People get bored if the facility doesn’t give an impression of seeking to improve the experience for repeat customers. There may be other attractions in the area that look more attractive if you fail to provide the best experience.

Almost everyone can find something about their facility that can be updated, changed and/or replaced in order to improve the physical image. It is also possible to improve staff training and to review marketing programs to see if they should be upgraded or replaced.

People expect more and are usually willing to pay more when the experience is improved. An improved experience can result in increased per capita spending and increased attendance, both of which will have a positive impact on revenues.

In some instances, competition in the region can be the primary cause of reduced attendance and revenues. When this occurs, it is important to take a close look at what ‘the other guy’ has to offer. Identify key elements that cause your clientele to leave your facility and go to the competition – whether it’s other tracks or other ‘amusements’. In many instances, the reasons may be that the other facility has more modern equipment and a better layout. In others, it may be due to additional attractions being added.

CHECK OUT YOUR OPTIONS
If your existing facility is like most, expansion to include additional attractions may be difficult or impossible. This doesn’t mean that you can’t improve your potential to attract more business. Give consideration to modifying your track to improve the driving experience, cleaning up or modernizing the karts you use, repairing and modernizing track barriers, pits and islands and possibly adding the ability to run dual or triple pitting.

Dual pitting is often used to increase the overall number of rides per hour without constructing another track. This requires the addition of more karts, but doesn’t necessarily change the driving experience on the track. The exception would be if a different type of kart were added.

A second use of dual pits would be the creation of a different class of driving experience. This could include the use of ‘adult karts’ in one set of pits and ‘family’ or lower speed karts in the other set of pits for general operation. These, obviously, would run in separate cycles.

Another option for one set of lanes in a dual or triple pit configuration would be the use of ‘rookie karts’ for birthday parties and non-peak periods for young drivers. As the rookie kart speeds can be set lower, it is possible to use regular tracks without problems.

Take a serious look at the possibility of revising track geometry by realigning and reconstructing a portion of your existing track to create a new and better driving experience. This could include reducing long straight segments and sweeping curves which makes the rides boring to all but beginning drivers.

In many instances, it may be time for a change, in terms of the karts on your track. The karts currently in use may have more years left in them, but not at your location. This is especially true in areas that have other indoor facilities with newer equipment. If the present karts still run, they may have some value as used karts for other facilities. New karts also offer a better opportunity to paint advertising on them. This advertising can be sold to local businesses and help reduce the total cost of acquiring new equipment.

If your site has the space to add other attractions, carefully consider the potential for success in doing to. This means taking a close look at your existing and proposed target market. If your market is too small, DON’T EXPAND. If your target market is large enough, you would be wise to expand (assuming, of course, that you are capable of financing the added construction costs).

Make certain your proposed site, after modifications, can actually accommodate the anticipated increase in attendance. People need areas for congregating, relaxation and watching others using your attractions. You should seek to create a comfortable feeling for those not actually participating on the attractions 100% of the time.

Also be certain your parking lot can accommodate the increased attendance you are seeking to attract with the changes and/or upgrades you are making. Failure to have parking available for the guests you are seeking to attract can have serious adverse affect on the numbers you are seeking to attract. Potential guests that cannot find a place to park may become so upset they never return.

Should you be seeking to use shared parking with adjacent businesses to cover overflow from your own facility, be certain you have a clearly defined agreement. Verbal agreement may be okay, but you are better covered if it is in writing.

NOTHING VENTURED, NOTHING GAINED
Remember, success doesn’t fall into your lap. Neither do profits. You have to work at it. Most markets have a potential for success. Failure to target the product to the market, however, has resulted in a failure to succeed.

The actual product (attraction) selected must be one targeted to the specific market you are seeking to serve. It also includes the site location, marketing practices and customer relations on-site. Remember, there are many opportunities to fail!

The people who succeed will be those who took the time to evaluate, plan and produce better facilities. Most will do so by surrounding themselves with people that knew what they were doing. As the industry becomes more crowded and sophisticated, the opportunities to fail multiply. Seek out the best advice and design assistance.

Study the market, look at existing facilities, do your due diligence, hire professionals and make informed decisions. Don’t become part of the old adage, “There is never enough time to do it right the first time, but there is always time to do it over”. Unfortunately, with the cost of construction, equipment and money itself, there is seldom a real chance to ‘do it over’ if it wasn’t done right the first time.

STUDY YOUR ALTERNATIVES
Prior to making a final decision, review your alternatives carefully to get a clear understanding of what commitments you may have to make. This includes site configuration, attractions and/or equipment selected, financial concerns and time commitments.

Plan your project carefully and make judicious use of available expertise. The items addressed in this article are important. We cannot pretend to cover every item that may need to be dealt with for every situation, but feel that the items listed cover most of the major elements involved. If handled properly, your planning will be off to a good start. In this industry, it is definitely true that ‘failing to plan’ is actually ‘planning to fail’.

Establish a plan of action that addresses your specific market, including attractions that provide entertainment for all target age groups. This must be considered in the context of an achievable site configuration, capacity and financial budget.

Resolve to make decisions based on sound judgment, using as much information as possible. Wanting to do something is not an assurance of success. In most instances, time and money spent at the start will pay enormous dividends in terms of increasing the potential for success.

It is of great importance to be as certain as possible in terms of feasibility, location, concept, design, marketing, cost, potential revenue and ability to withstand the test of time. The following are a few elements that should be given careful consideration.

Be certain you know and understand your market potential. If in doubt, have a feasibility study done. If this isn’t possible, at least seek advice from people that have expertise in evaluating markets and potential patronage. You should be aware that there are a multitude of factors that can influence success or failure.

Location: If you determine that your present location is one of the reasons revenues are down, perhaps there should be no ‘heroic’ efforts taken to save the patient. Remember that the two most important requirements for successful operation are: 1) a good location with easy access and 2) sound management. A good location will aid in the generation of initial and repeat business and stimulate impulse patronage. Being visible is not enough. Unless new guests can easily locate and reach facility, the number of potential guests drops rapidly. Sound management can only assure that when guests reach the site, they will be well treated, enjoy their visit and be motivated to return.

Before embarking on any construction on your site, double check all ordinances, codes and regulations to be certain you won’t get closed down. In the case of ordinances passed since your site was constructed, repair may be acceptable but reconstruction not permitted without abiding by the new ordinances (across the board). If this isn’t possible, you should rethink your course of action very carefully.

CONCLUSION
If your careful consideration of the facts surrounding the physical realities of your indoor facility and your operating procedures results in a decision to upgrade and improve both the physical and operational facilities, do so. Properly done, the time and money spent creating an upgraded facility should result in increased profits by ‘doing it right the first time, the second time around’.

We have addressed only a few elements that can affect the potential for success. Remember, each project, owner and community is unique. Plan for both the good and bad times. The indoor karting industry can be a source of much success for those who have commitment, understand the industry and know their marketplace.

About the author: Peter Olesen is a Licensed Professional Engineer in eight states and President of Peter F. Olesen and Associates, Inc. 500 West Central Road, Suite 205, Mount Prospect, Illinois 60056 USA. The firm provides consulting services to concession go-kart and Family Entertainment Center clients. Project span 35 states, Puerto Rico, Canada, Mexico and Brunei. Services range from preliminary site evaluations, feasibility studies, concept development, master planning, design and construction engineering services for project that include concession go-kart tracks, miniature golf courses, indoor and outdoor family entertainment centers and theme parks. These services apply to new facilities as well as renovation or expansion of existing facilities. Mr. Olesen has written many magazine articles on the industry and has made presentations at numerous industry seminars. For more information, see www.olesen.com or call 847-253-1515.

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