Outer Limits 4x4 Board

I thought it was worth posting this up because we’re making some changes at Ragged Edge 4x4 and I don’t want guys assuming the worst if you see the business mentioned. I’m selling my three trucks not because I’m going broke or want to go fishing; in fact business is great at the new site and I’m looking to expand the business while giving myself time to devote to the Outlaws Comp and a few other ventures.

I’m selling the trucks in an arrangement like an Owner/Driver deal; guys buy a business, including a truck: I provide them weekend work that they get well paid for and they can do what they want with their truck in between, like compete in the Outlaws Comp. The trucks are currently being upgraded for the sale.

I've been working with Solid Axle to design and build Rock Racers that will work in the same way as our current trucks. Basically LS2, D60s, Atlas II, 40’s… that customers can hire for a squirt. I’m really keen to get Rock Racing off the deck in Aus but I think it’s a big ask for guys to spend $50k+ on a Rock Racer when there are no comps. I think it’s a different thing entirely to buy a business that makes a very good return and happens to be based on a Rock Racer. You then have a saleable appreciating asset because you can sell the income not just a depreciating 4x4. If I can duplicate the business in Qld and NSW then we get a grid of Rock Racers and we can start a viable, sustainable, national sport. Once the sport actually ‘exists’ then guys will spend the $$$ to build their own and the Ragged Edge Racers become a class, sport gets bigger ….

There is an old saying in business: “What wins on Sunday sells on Monday” it’s why car manufactures spend big $$$ on motor sport. Comps become the marketing tool to let the public know that they can drive at Ragged Edge which pays the guys who own the 4x4’s to race. (Hope that one made sense). As the sport gets bigger: more exposure; sponsorship becomes an additional income stream for the Racers too. Drive days are a big part of the ‘sponsorship’ package for most motor sports like V8 Supercars and that’s what Ragged Edge is geared up to do.

The flip side for Ragged Edge customers is they get instruction from guys who are passionate and knowledgeable about extreme 4x4s and comps = a better experience.

So there’s the plan: have guys around the country who own Crawlers or Racers that they are paid to use and race.

Exciting times ahead

Should have said why I put this in tech too: stay tuned for build up

I thought this thread would have been swamped with replies, can you PM some details on costs and predicted earnings?

Hey guys, thanks for the inquiries.

If you are SERIOUS and want some more information can you PM me your e-mail address and I'll send you a Prospectus on Monday. State if you're interested in a Crawler (350 Chev, 4WS, 44's) or Racer (LS2, 40's). Consortiums are an option too.

Interesting concept (& expensive I guess) but definately one that I hope goes ahead & survives. I am for anything that helps the offroad community.



brooksy

Hey Brooksy; thanks for the support; much appreciated.

I got a PM from Tozook last night and I thought the answer was worth sharing. Basically “how much would it cost to set up a Ragged Edge in Sydney?”

I explored this a few years ago and what I learnt was Sydney has what they call a ‘disjointed market’. It means it’s very hard (expensive) to get potential customers aware of your product because Sydney people, more than anywhere else in the country, are bombarded with businesses trying to do the same. It then becomes a numbers game; if you need to spend big on advertising then you need a business that can generate big sales. The only way to do that with the Ragged Edge model is to have several 4x4s not 2 and keep them busy.

This is where Comps become important; they can create really good market awareness for your products IF you create something interesting for free to air TV to come to. Our stuff is HARD to promote because it's such a visual thing; radio, magazines, newspapers don’t work for ‘normal’ (non 4x4) people because photos don’t do it justice; if they see a TV ad or You-tube vid of us you can see the blood drain from their face: that’s effective!

I should mention less than 20% of the people who use Ragged Edge have been four wheel driving so it’s not a big part of my market; most guys reading this wouldn’t pay to drive at Ragged Edge (but I reckon most would work there) so while this market is easier to get to it’s not actually that beneficial for the business.

The difference with Sydney is it has the largest and most dense population of corporate business people in the country; that’s the $$$ market but the economy at the moment means now’s not the best time to hit them. There is no doubt Sydney has the biggest potential.

So to actually answer Tozook’s question I would need 5-6 Owner/Drivers with both Crawlers and Racers in Sydney to make it viable, I already have a location lined up BUT I would still do Qld first because with two or three sites running we could get enough national TV exposure for the Sydney business to hit the ground running. That would be MUCH harder/ more expensive to do if Sydney was the next location.

Now you can see the importance of Comps in the structure of the business; the two are intertwined. I would hope that with new sites around the country we get more venues for comps; both ‘Outlaw’ comps for the Tuff Truck guys and the big Ragged Edge Crawlers as well as ‘Rock Racing’ comps.

Ok I've had another inquiry from Sydney so thought I'd better quantify things.

My first priority with getting people involved in this venture is that there is a benefit for all concerned. It's taken me 5 years to get the business to this point and I'm the first to admit I've made mistakes and learnt a heap of lessons. Hopefully those getting involved can learn from those lessons

While I know Sydney has a group of highly committed 4WD enthusiasts who would love to get this off the ground this is also a business venture and like any business you have to minimise and manage the risks. The risk in Sydney is you have a bunch of guys sitting in their crazy 4x4's waiting for customers who aren't coming because they don't know the business exists. Guys are always surprised to learn the 4x4's are the cheap part of the business (I've got $400,000 worth of trucks), marketing and awareness are what cost $$$.

Through my connections I can create a certain level of bookings BUT we need to be very effective with our Marketing or the thing just won't work. There are three options to do that: A. Spend a HEAP of money and do a massive marketing campaign to create awareness (won't concider that one for a few reasons). B. Run a big and I mean BIG 4x4 event in the heart of Sydney to create mass awareness (this one needs a very well laid out marketing structure so we're taking it beyond the 4x4 community). C. Utilize the national exposure from sites in Vic and Qld to leverage awareness of the "up and coming" site in Sydney (this is the safer option but it takes time).

Why is Qld safer? Because the state is more geared to entertainment: the theme parks etc, so it's easier / cheaper to get your name out there because there are already structures in place to do that: means you can give the business traction quicker. Again it would not be economical to start one from scratch but by leveraging of the Vic site you bypass alot of the start up costs.

Better get some tech in this thread soon or this will all get deleted.

Ragged Edge 4x4 Werribee wrote: Better get some tech in this thread soon or this will all get deleted.

sounds like 4x4 business tech to me

I'm sure there are enough "Tuff Truck" style rigs in Qld to get the numbers up. Like you said though exposure would be the problem.

We don't have many Outlaw style comps here and there would be enough buggies sitting around to get good competitor numbers.

How are you going to bring the spectators though?

People can identify with a bodied rig, they also find crawlers slow and boring, but rock racers would be entertaining. People like carnage.

A good mix may go a long way.

One thing you will hear alot from those involved with Motorsport now is: "We're in the entertainment business". I've heard it from F1, V8 Supercars, Biante series, Brute utes,.... I think there needs to be some awareness of what the spectator will get for his investment when he buys a ticket to a comp. Bottom line they want to be entertained.

This is not a critism because I certainly think it has its place but most 4x4 comps are based on the competitors: lets built the hardest tracks so the guys will want to drive them. If people want to watch that's well and good.

Flip that around: how do we make an obstacle that is going to test these 4x4's right in front of where a whole pack of spectators are. I'm not saying we have to make this 'crusty demons go wheeling' but it's something we have to be aware of.

Take that to the next step. I know a bunch of 4x4 guys who try and get sponsorship: fair enough too it's an expensive sport. But what can you give your sponsor? (Speaking about non 4x4 industry) They don't, won't ever really care what you do; as far as they're concerned your driving around in a billboard, it could be a squirrel race, the ONLY issue for them is what sort of exposure do you give them. The sponsorship 'value' is solely based on creating awareness for their brand. They have exactly the same issue I said about Ragged Edge before: how do we create cost effective market awareness. They have no choice but option A: spend $$$$ on a marketing campaign.

I spoke to the guys at Redbull and Rockstar years ago and they were really keen to be involved because for them getting in on the ground floor is ideal. More importantly than their money though is they open doors. The have a marketing machine then we can only dream of creating. If they channel that potential towards the 4x4 sport then that by itself creates an enormous amount of exposure.

The problem I've had for years is not the sponsors or the 'product' it is that this sport is a hobby sport. Nobody gets paid to do this and professional companies won't sponsor hobby sports. If you bring in a semi-professional element that changes everything.

As I've said before I'm not trying to take anything from the existing 4x4 sport, I've been to and enjoyed heaps of them, what I'm talking about is something in addition to them not instead of them.

I love what you are doing.

All I ask is that you consider making it formula racing. look how well the mini v8's (Aussie race cars) do.

Why not build the cars for everyone? You can bulk buy matching components, get the chassis cnc bent / coped, migged and all spares are off the shelf. Laser cut skins, etc

Look how fun go - karting is when everyone has the same car.

full points

Regards,

Justin

Hey Bru,

Thanks for the support.

That's exactly the plan, all the Ragged Edge Rock Racers will be exactly identical: LS2, Atlas II, D60s...(Build up coming soon) all the Ragged Edge Rock Crawlers will be identical to what we currently run in Werribee. The Crawlers will compete as a class in the 'Outlaws' comps, the same with the Rock Racers at the Rock Racing Comps.

Sounds like a nice idea, the only problem I see is what if the owners break their vehicles during their 'own' time? Obviously they'd need to be fixed to compete/be used by the public on weekends, but what if the owner can't stump up the cash that week to pay for a new set of axles or whatever? It wouldn't be a problem if it's only 1 out of the 5 or so cars, but if a couple break, it could throw a spanner in the works

Im sorry but I feel differently to bru. One of the main reasons I love hard core 4x4 events is becouse there are so many different makes, mods and styles to build a podium placer. Its probly the main reason why I havent dabbled in any other motor sport where they tell you how to build your car.

The sport has come a long way in the last few years which means crazy strong parts are now available off the shelf and custom parts don't need to be manufactured (that's been my killer in the past). I think that one of the key benefits of having so many identical cars is it becomes viable to have spares of just about everything on the shelf that can be sent overnight to anywhere in the country. We also have a pretty stringent maintenance structures in place so we catch potential breakages before they happen. I’m pretty confident with the 4x4’s we’ll build that guys can wail on them and they should handle it ok. Most of the breakages I see are from guys who can’t drive and don’t understand mechanical sympathy. I don’t think they’re the guys who’ll buy a truck (they're probably the guys who will hire it though).

To reduce the chance of breakages we'll be doing a bit extra to the 4x4's too: cryogenically treating components, heat treating parts. As Bru 21 mentioned this is viable (and cost effective) when your build several trucks at once.

As far as not being able to pay for breakages that week I'm sure I can let guys "work" off the debt. With the income these trucks will make I honestly can’t see it being a big issue.

We have mechanical issues pop up occasionally at Ragged Edge but most things we can have sorted within 15-20mins. As I said earlier we're upgrading the current 4x4s to remove all the issues we've found in the past.

Hey Rhett,

I completly understand where you're coming from which is why I've mentioned a couple of times what I'm proposing is not replacing what we currently have, it is in addition to those.

The 'Outlaws Comp' will have different makes and models and the Ragged Edge 4x4s will be a 'class' within that. Is simply isn't viable to build an income stream for guys with 4x4's if they're not identical or you have the issues that antt raised.

Thanks for your comments though they are appreciated.

I just re-read this thread and thought I'd better qualify something before it bites me.

"Most of the breakages I see are from guys who can’t drive and don’t understand mechanical sympathy."

Stuff breaks: it's part of our sport, tracks are harder, tires have more traction, suspension is better.... What I was talking about is guys who come to Ragged Edge and break a 10.5" ring gear and air locker on one of my H260s. Granted I should have hit the remote kill switch earlier but dude "I can't swim, I know I can't swim so I keep my black ass outa the pool!"

Rhett wrote:Im sorry but I feel differently to bru. One of the main reasons I love hard core 4x4 events is becouse there are so many different makes, mods and styles to build a podium placer. Its probly the main reason why I havent dabbled in any other motor sport where they tell you how to build your car.

Mate we're on the same side!
I love ORR because I can build what I like, my fab skills and ideas in general are pushed by what I see, I LOVE seeing big teams do well and the sport progress. Sitting in Baja when the McMillans drove past made the hairs on my neck stand up I am 100% all for it.

In this case the cars will be for hire / drive - which means if the cars are all vastly different in design / components one will (probably) be better and more likely to win. Its like racing your mates go carting in 6hp's when one guy has a 9hp.

I don't think this should be instead of what is there but in addition.
I know as soon as these cars are ready I'll be laying down some greenbacks for a drive!

Furthermore - imagine that there are 10 similar cars racing - the spares could be comprehensive and most cars will see a full days racing.

I rode moto trials for a few years and it was awesome having so many on a level playing field. I see this as potentially similar to trials for that reason.

Remember how much interest the 2 haultech 'hire' buggies generated too!

I say bring on both formats!

This could seriously lead to Australias own KOH

very interesting
have noticed some of the bigger players havent commented
or are doing so in private
very interesting

I hope this gets up!
Bout time for Rock Racing in Aus

While I love the idea and am all for it. But, Australia is a hard place for this sort of thing. Put simply it's a numbers game.

Here we have a land mass area similar in style to the united states, we have a population of roughly 25 million.

In the US they have 300 million

It's a numbers game, the only real successful professional motorsport here in Aus is the Super cars. keep in mind that all the support races are generally Amateur, ie they aren't professional drivers. most of the own build and pay for their own cars even if they do have sponsors

Why are the supercars successfull?

1: Everyone can identify with it.(who hasn't driven a Falcon or Commodore)
2: It's a spectacle, generally you can see a good portion of the race from any one vantage point,
2: It has a lot of history and heritage.
3: The Supercar body as a whole has a massive multi million dollar Budget for advertising and promoting events.
4: Race teams also have very large budgets to allow them to travel.

To make this work you need to establish most of the above to some degree

I have to say this is becoming an interesting ride!

I spent all day yesterday on the phone with my agents sussing out taking this interstate. “Now, you’re talking! I’d love to push this in Sydney….” was my favourite response. A few of my agents are expanding into retails outlets: Myer, Dymocks, etc so a lot of the issues that existed a few years ago have changed. We also have built up a collateral of marketing awareness so we can use that to push the business quickly; always a big issue with a new venture.

I know it’s unlikely I’ll sell any trucks on this forum; it’s a big shift to look at a toy (bad debt) and change the perception of that into an asset (good debt). I’m not questioning your intelligence by the way it’s just people who spend time on these forums do so because they’re passionate about it; not because they’re trolling for a ‘high yield investment with strong margin growth opportunities, fully franked dividend tax advantages and a lump sum capital growth rolling over into principle, net geared deficit’. (I have no idea what the means by the way). I do believe though that people with a good head for investments will look at his very favourably and will probably look here as a resource for guys to work and potentially even race. You’ll notice in a lot of Motorsport the guy who drives the car usually doesn’t own the team: the owner is busy trying to run the team like a business; putting the best people in key positions.

Having said that, I’m looking to push a Sydney location hard and soon; get the benefit of the Christmas rush. The trucks will be Rock Racers that can crawl so we don’t have two different products. Danny from Solid Axle has agreed to do a run of custom D60 housings that will literally be stronger than any D60 on the market (don’t ask me the metallurgy info I got lost on the third “ology” but I’ll get Danny to explain that later). LS2, th400, CUSTOM D60 with 4WS, 4-speed atlas, 40” stickies, Walker Evans rims, we’re going the whole 9 yards. My existing buggies were independently valued at $90,000 and these will be a whole other level.

From a business point of view I’ve decided I’ll be putting the numbers out in the public so no harm in mentioning them here. The income we are currently generating in Vic for each 4x4 is worth $100,000 now (that’s the value of just the income that one 4x4 generates not the 4x4 itself) if we maintain the current levels; booking volumes are certainly going up which makes that value increase. Comparing the Rock Racers to my current 4x4’s I can guarantee the Rock Racers will be valued in excess of $100,000 and I’m selling the Owner / Driver businesses for $99,000 (GST incl) for the first 4 in Sydney and Brisbane. Yes the price including income stream is less than the book value on the 4x4.

Basically I’m doing the O/D business at a way low price to get in moving. Income is split 70% O/D (have fixed and variable costs), 30% Re4x4 (we do bookings & marketing). If you want to work out the $$$ income for an O/D look at the price and time for a drive on our website: our trucks work 8 hours a day two weekends a month; more leading up to Christmas. My agents assure me we can do at least as much volume in Sydney as Melbourne. I’m waiting on a location in Sydney to get back to me today.

The bigger concern for me at the moment is the Outlaws Comp. The plan with giving away the Yellow truck is not just a marketing gimmick to get guys to pay early. If I sell 2,000 tickets 6 months out from the event, this is REAL collateral to take to the media and sponsors. They get involved and like I said before we get some awesome exposure. If I go to them now and say “yeah, I want to do this 4x4 comp thingy” I’ve got nothing and having ‘nothing’ is what’s killed comps in the past. Currently I’ve sold 68 tickets of the 2,000 and 4 of the 20 competitors have paid their entry fee (same as what last place wins). I may not be the smartest cookie in the jar but that’s telling me quite clearly that Vic may not be ready for an Event like this. I know I can get Joe Punter to bring his family to the Event but he’ll pay on the day; which doesn’t help. Its guys in the scene like you who need to support this!

I’ve put my hand up to run this event and I can tell you now I’ll loose $$$(!) the first two years min to make sure this is the biggest and best it can be but for 68 people; I’d rather spend that energy setting up a Rock Racing circuit for guys I know are committed. I’d rather not pull the pin and refund everyone their tickets but I’ve had 5,500 hits on the Outlaws thread alone; that means <2% reckon this is a good thing. Kind of hard to get Mr Energy drink on board now for the Outlaws Comp then when it flops say; “Lucky we have another Rock Racing Comp that will be bigger….” I know how that conversation is going to go. Correct me if you think I’m reading this wrong.

Now I’m off to sell some Rock Racers!

Ragged Edge 4x4 Werribee wrote:I have to say this is becoming an interesting ride!


If you want to work out the $$$ income for an O/D look at the price and time for a drive on our website: our trucks work 8 hours a day two weekends a month; more leading up to Christmas.!

pssst you should probably add your website address to your profile so people can find it without using google... I am far from a marketing guru and I am sure you have plenty of them, but I think it is a good idea

The current crawlers look great and certainly serve a purpose, and can obviously turn a profit. Obviously they have been reliable trucks that have held up the the abuse very well apart from as stated, a few diff issues.

What company/Who built the original trucks?
Why not use them again if its a proven thing?

Not saying Solid Axle can't deliver, but everything they seem to do is based on the supply of components. It doesn't look like they build buggies of any sorts. Wouldn't it make more sense to use the components but have a shop with buggy building experience doing all the fab work. The last thing you want with a big dollar proposal like this is have it fail you. Any invester is going to be looking at things like this, which is why people use known shops and builders.

I think the issues Breaker bought up are critical to understand properly.

Let’s look at Supercars; this is how I understand the business of V8 Supercars to run: 75% of the business that runs V8 Supercars is owned by the teams themselves, 25% of the business is run by a marketing company that ensures the ‘sport’ continues to grow by making the sport “entertaining”. The teams benefit from having the sport get bigger because their potential revenue from Sponsorship (their biggest income) increases: as I said before Sponsorship is how companies gain market awareness and having their ‘brand’ on TV is a very appealing and cost effective way to do that. I guarantee any Company would rather pay $100,000 to have 2m people see their logo on TV than spend $1,000 on a sticker on a 4x4 that maybe 5,000 people see. They can also see from TV stats exactly what sort of demographic are watching and tailor their sales campaigns to suit; makes for very cost effective business. Awareness is one thing but at some point you actually need to make money.

V8s are a business; you can’t rock up with your Commodore and race. The last time I looked a ‘Licence fee’ to be on the grid was worth $1.2m. Twelve years ago it was like $15,000. That’s not a bad investment! (My numbers are a little hazy because this is all from memory) That’s not the car, no guaranteed sponsors, that’s just to race. Why is that worth so much: because the exposure that that creates equals a strong fiscal return.

Let’s say hypothetically I had 20 Rock Racers who were willing to put in $100,000 to buy a ‘licence’. It cost Rally Australia $400,000 to have their coverage on Channel 10 every weekend. I’ve got 20 x $100,000 = $2,000,000 which means I get five years of TV coverage. Mr Rock Racer needs to find $10,000 a year to make 10% from his investment in the licence or get good capital growth (the same as a Investment property). He goes to Mr Energy drink with the figures from Channel 10 saying at that time we should get 500,000 viewers and Mr Energy Drink says that’s worth $XXX. That’s what pays for the car, running costs, etc and the 10% Investment. When Mr Rock Racer wants to sell his licence he’s generating 30% return from that ‘investment’ so the licence is now worth $300,000.

I’m REALLY simplifying things but you can see the reason V8 Supercars have massive budgets is BECAUSE there’s a business and equity involved in the process.

What’s the chance of having 20 Investors spend $100,000 on a Rock Racing licence now? 0.00%. I'm sure most of you could name 20 blokes off the top of your head who’ve blown $100,000 on a comp truck and I don’t know one who would spend $10,000 on a ‘licence’.

A guy by the name of Shane Gore tries to do this in Drag Racing a few years back: teams would pay $70,000 I think it was and he would take them to TV with all the Sponsorship benefits that that would create. The teams were all for it because their potential earnings would more than compensate for the initial expense but the tracks saw it as loosing their cut so canned it.

What’s the number of people who will spend $100,000 on a business that makes a proven, healthy return on their investment? I’m hopeful I can find 20 in Aust. These are the guys who will take Rock Racing to the next level.

Just for anybody (like myself) that doesn't clearly know what "Rock Racing" is, is this what we're talking about:

http://www.youtube.com/watch?v=TAIqu6YnIpQ

http://www.youtube.com/watch?v=zQE2F7NJEAs

If so - looks like fun!

Thanks SteelArt; obviously computers aren't my thing; which is why I have a perfect imprint of my keyboard on the office window.

Hotrod, to put this as nicely as can I ordered 3 4x4's in 2004 from a reputable 4x4 buggy building shop. In 2006 I got my first one that didn't run, didn't stop, didn't turn and the steering wheel faced my crutch. That's $70,000 I'm still paying off that was complete junk. I'm more than a little apprehensive these days.

Matt Dunk, who I concider the best buggy man in the country, designed the current crop and they were built in house. For branding purposes the Rock Racers will look quite similar. The chassis need a lot more triangulation and the suspension geometry needs a re-design but it's stuff that guys in our network can do.

Why Solid? Danny at Solid doesn't just sell components he manufactures them. Solid components are manufactured right here so when I say to Danny I want to make a lighter / stonger housing he says "Why?" then finally he says I can do a run where we increase the tensile strength of the housing from 300Mpa to 800Mpa by austempered ductile heat treating them. Then I say WTF....

Danny's been sponsoring Rock Racing trucks in the States for years; he's their first call if something breaks so he know the issues and he's on a first name basis with a bunch of Racers over there like JT Taylor. Not dissin the local guys but anyone who builds stuff here is second guessing what they think might happen and I don't want to be a guinea pig.

love what your try to do for the sport here, and like many other 4x4 enthusiasts Id love to drive one of those rocky buggies......but cant afford no where near the 100,000grand its going to cost to get a ride of these things......

are you worried that this may become a rich mans competition only?

any chance of sub contracting myself as a driver........rather than pay for the whole liscence fee......or buy out the vehicle....., like an employer....I'd drive the vehicle, ensure the advertisers get their advertising at events, and then hand back the keys at the end of the comp...clock off and go home with a small wage.....

well, along those lines anyway? or wouldnt it work.....

I couldn't imagine there would be short supply on proven drivers for the rigs.
The issue would be coming up with the funds to have the rigs waiting for drivers.

If the current rigs are as profitable as you state, maybe that may be an option for some people or companies with money to write off on advertising.

How much debt is left from the initial setup of the business with the current buggies???

....obviously some if you say your still paying off the $70k rig that was a piece of junk.

This sounds like a great thing, just wish I had the dollars to give it a go.

Another thing with marketing is merchandise.
When I was in the states I saw the Monster Jam trucks and was amazed at the lengths they went to for merchandise. From shirts to toy monster jams to hats. All the teams had their own to sell.

It the cars are all the same, maybe look at getting a toy maker to make a generic one then just sticker them up in the team colors.

The only reason I know half the teams in the monster jam series is because my kids love it, and ask for the toy cars for b/days, xmas etc.

Just an idea anyway