Posted By: DakFink
" RACING BUSINESS" What does it mean? - 07/19/13 03:39 AM
What does the term RACING BUSINESS mean to you?
Especially those that make their lively hoods around racing?
I ask this because I read a column a few days ago that put RACING as a BUSINESS into a new perspective for me.
I'd like to see what other say before, I say what it was that I read.
Let's just say for now that I had always noticed that a LOT of the Top-Dogs usually owned Businesses of their own, besides racing
Posted By: Jerry
Re: " RACING BUSINESS" What does it mean? - 07/19/13 05:18 AM
racing for the most part is a write off for the guys who have other "businesses" basically they get to fund their hobby and pay a little less tax on it. if they win, then they pay a little more tax. but in reality unless your running every weekend I find it hard to believe that you can make money at it on a small scale. for the big guys who have "racing businesses" you need sponsors and not just the ones who are willing to donate a case of oil, but real cash money.
Posted By: tubtar
Re: " RACING BUSINESS" What does it mean? - 07/19/13 05:24 AM
It can also have severe connotations at the weigh stations that dot our nations highways. If your activity is deemed to be a commercial enterprise , you fall under an entirely different rule book.
The book is much bigger and so is the price tag for being wrong.
Posted By: Sinitro
Re: " RACING BUSINESS" What does it mean? - 07/19/13 07:43 AM
Posted By: DakFink
Re: " RACING BUSINESS" What does it mean? - 07/19/13 11:12 AM
Not getting as many responses as I would have expected seeing as we have a few memebers here that post regularly that do have racing in their Businesses.
Posted By: Quicktree
Re: " RACING BUSINESS" What does it mean? - 07/20/13 01:51 PM
do you really have a racing business or do you just race? claiming so opens the doors for all kind of issues, dot, IRS audits etc.
Posted By: gregsdart
Re: " RACING BUSINESS" What does it mean? - 07/20/13 03:34 PM
It is a double edged sword fore sure. With the DOT on one side, and the IRS on the other. Flying "under the radar" so to speak would mean, don't put a signs on the trailer or tow vehicle, and to avoid audits, stay under $10,000 loss per year. I was advised this by a trusted CPA, that that is a threshold flag. Secondly, have a valid game plan for making money down the road at some point. You might consider a dual business,racing, related sales of some sort, or service.
Posted By: AndyF
Re: " RACING BUSINESS" What does it mean? - 07/20/13 08:01 PM
Not even sure what the question is. Are you asking about a business that sells race parts, or a business that races? Most professional race teams are supported by sponsors. It is pretty rare to find an actual business that supports itself with race winnings and no sponsors. I can't think of one but maybe there is some guy somewhere who wins a whole bunch without spending much money and that is all he does.
Posted By: DakFink
Re: " RACING BUSINESS" What does it mean? - 07/21/13 02:20 AM
Well the article I read put a new perspective on the whole Race Business phrase.
In so many words it said racing is NOT the Business. Advertising is the Business and Racing is the Media used for that advertising.
(after reading that I looked at several cars and the sponsors on the side and was Like, what in the world does XYZ-Energy have to benefit from racing?)
It went on to say that the majority of Sponsors you see on race cars have no clue or could care less about racing and stats they are more worried about the Audience in the stands and the Person behind the wheel as a Face of their Product/Company.
That said, he even pointed out that many of the racers that he has helped were complaining about, the DOT, Licensing, Putting Advertisements on their Trailers and the extra Cost of insurance. He explained that is all part of the ADVERTISEMENT BUSINESS Package you need to sell to the Sponsor (who ever that may be) All those extras are small in comparison to the FINES if you get caught or the loss of the Sponsorship if they find you aren't representing them or a No Show because you got BUSTED. It's business expenses! make sure you work it into your Sponsorship Proposal.
The article posted that many of the best people the author has help with sponsorships were business owner's, because they treat racing as another business of it's own. And they already know how to run a business.
As we all know and the article stated NO ONE in any class is going to make a living, much less make a Business around the winnings. Even being #1 in the top classes the winnings don't even come close to covering the costs just to show up. (I'd look at those as Bonuses)
That pulled into my thoughts 1 person that stood out. Michael Waltrip sponsored by Napa. When was the last time he was in the Top-10 anywhere? But NAPA still sponsors him? WHY? Because he is well known, has a good personality and has a Good face for their product!!
So to me the Racing Business is an Advertisement Business that lets a person Race while working for a Sponsor.
The one thing the article did mention is expect to be turned down or be offered ridiculous packages, because not everyone wants or needs the exposure. Some that don't want it would surprise you.
BUT on the other hand their are those that you would never expect that would jump at it.
I know the Advertisement Plugs get annoying and sometimes OLD, with some racers. BUT Now I have a better understanding that THAT IS who pays the BILLS and allows them to be able to race for a living.
NOW I know some other Business owners use their Cars as a Tax write off and R&D platforms if their primary Business is a Race Supplier Company and that's another ball of worms but not what I was thinking of.