Pat Joffrion spent two years and much of his life's savings turning a large tract of Louisiana sugar cane, 30 miles outside of Baton Rouge, into the No Problem Raceway Park. Opened in 2001, the raceway has two amateur racetracks: a 4,000-foot drag strip and a 1.8-mile winding racecourse.
Previously, Joffrion successfully transformed an empty commercial lot into an unlikely assortment of businesses: sandlot volleyball courts, a tanning salon, and a drive-through window serving, of all things, frozen daiquiris.
The raceway draws about 5,000 spectators per event. More than a third of the tracks' $1.56 million in revenue comes from amateur contestant fees, which are about $40 per driver. Saturday-night Midnight Madness events are especially popular with younger racers, who challenge friends to drag races and "drifting" contests, in which drivers intentionally spin out at high speed. "We race everything from grocery getters to Porsches," says Joffrion, a former accountant.
Joffrion, 56, says "it's time to slow down." Well, almost. In the past year, he has added a $200,000 1,500-seat grandstand and has begun work on a concert pavilion in the hopes of attracting big-name bands.
The Asking Price:
$6.75 million, including 179 acres, two racetracks, two garages for up to 26 cars, control towers, concession stands, a sports bar, a fire truck, and an ambulance. Joffrion says he is willing to finance a portion of the sale.
The asking price includes $2 million worth of real estate. Joffrion says he has spent $6.8 million in improvements. Because of the nature of the business, there is no valuation rule of thumb. The owner is basing the asking price on what he believes is a fair price for a buyer looking for a reasonable rate of return.
Earnings are up an average of 10 percent per year since 2005. The business comes with enough land to expand the racetracks and other facilities.
Much of the raceway's value lies in the improvements the owner has made to the site. To properly evaluate the price, a buyer will have to scrutinize the value of those improvements and assess the potential for expansion. Though the business appears so far unscathed by the recession, attendance may dip if the economy worsens.
The Bottom Line:
The raceway is priced below what it would cost to acquire the land and build from scratch. "Even if the owner's appraisals are a bit off," says Tom West, author of the Business Reference Guide, "this could end up being a very good buy."
Inc. has no stake in the sale of the business featured. The magazine does not certify the accuracy of financial or other information provided by the seller. Inquiries should be directed to broker Ron Gaubert at firstname.lastname@example.org or 337-993-1628.
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