myKART legal structure

Submitted by TheFazz on Wed, 16 Feb 2005 - 08:14

I am doing some research on the legal structure suitable for myKART.... should we go with a Society / Club / Assoc structure or an Enterprise / Sdn Bhd structure?

Bear in mind objectives are to organise karting / motorsports events, gain sponsorship & retain commercial rights to promotion etc. The entity must be self funding in order to benefit members by:
[list]
[*]providing members with affordable social karting activities at all levels
[*]focussing on grassroots and to lower the barriers to entry into motorsports
[*]providing members with driver development programmes
[*]helping members progress into other higher forms of motorsports - be it open-wheel / production cars circuit or otherwise
[*]talent management & sponsorship deal making
[*]junior driver search & development
[/list]

I would like to invite members in this open forum. From there we shall form the protem committee and work in more detail in regards the formation of the myKART entity.

The entity should be able to make profits, and has a management structure to do so.

Hence, what are your views on this?

OPTION A: club / association / society structure; whereby members contribute towards the club funds and participate in management, but profits re-invested.

OPTION B: enterprise / sdn bhd; whereby members subscribe thru annual fees or thru special class stocks... management is delegated to appointed board of management. Profits can be distributed.

Hi Fazz,
I would like it to be a club more than an enterprise whereby the club comittee are voted by the members,
The club will collect an amount to join in the club & have the pay a sub. fee every year....This money will go to the club fund ,The elected comittee will stay for every 2year for the club till the next AGM meeting.
Anyway, It's just my suggestion, the most important is get the club register at ROC....
Please consider me if you need any help all the time....

cheer,
Steward loke

If it was a club, then there would be limitations on how profit making for the club. There shall be a limit on the activities of money making for the club.
As for an Enterprise/SB this could not be, as it will consist of everyone who is a member of My-Kart.
So I think first and foremost, we should see what the objective of the organization shoul dbe.
I could offer some suggestions on what kind of entitiy My-Kart would be as there are alot of things My-Kart can do for the future of the motorsport.

[quote=JJxMan]So I think first and foremost, we should see what the objective of the organization shoul dbe.
I could offer some suggestions on what kind of entitiy My-Kart would be as there are alot of things My-Kart can do for the future of the motorsport.[/quote]

Absolutely. myKART's tagline is popularising grassroots motorsports. There's a lot of things myKART is placed to do. In fact, I've listed out some of the objectives in my opening post in this thread. To do this, myKART must be profitable & sustainable first.

I prefer to take detailed discussions of strategy offline, as I believe these will make myKART a formidable force in local motorsports. Happy to discuss further with any keen members who want to take this project into and beyond the next level.

I'm actually in setting up a karting Team. Might Be good to use My-Kart as a stepping stone. I've myself a 125cc kart. Since My-kart's credo is "Popularizing Grassroot Motorsport", I've actually thought of maybe bringing some of our good drivers in taking Race License, or maybe better still developing a Race Development Programme where in turn we'd not only see My-Kart drivers in Karting but also in Junior Formulae or Perhaps F3000. Not thinking formula 1 so far. But first, there must be an entity and also a backbone and brain's of this entity. Backbone will come in terms of funding. Funding will come in sponsorship (maybe in 3 yrs time) but the brains behind it is more imporatant, such as making sure how things will run, organizing and so forth. Maybe we'd see a My-Kart Racing in the upcoming WRGP in 2010?

[quote=JJxMan]I'm actually in setting up a karting Team. Might Be good to use My-Kart as a stepping stone. I've myself a 125cc kart. Since My-kart's credo is "Popularizing Grassroot Motorsport", I've actually thought of maybe bringing some of our good drivers in taking Race License, or maybe better still developing a Race Development Programme where in turn we'd not only see My-Kart drivers in Karting but also in Junior Formulae or Perhaps F3000. Not thinking formula 1 so far. But first, there must be an entity and also a backbone and brain's of this entity. Backbone will come in terms of funding. Funding will come in sponsorship (maybe in 3 yrs time) but the brains behind it is more imporatant, such as making sure how things will run, organizing and so forth. Maybe we'd see a My-Kart Racing in the upcoming WRGP in 2010?[/quote]

Joey - precisely the idea! You've read my mind. Thinking big! You also forget the talent management opportunities!

First things first then. I suggest My-Kart be a club then.
Next thing is, how do we raise funds.
Then, the managing and activity forsee-ing body.
To make things work, My-Kart must still retain it's Amateurs League and start planning in scouting potential drivers.
Meanwhile, Sponsorships? How do we approach? without a track record, I don't think it'd be possible.
And I personally think City-Karting is out of the question too.

JJxMan,

Sponsorship do not need to come in the form of funds, but can be in subsidised or FOC - parts crew support & logistic, as well. I can see Citykarting in contributing somewhere in the last three - if you are serious enough.

Think out of the box, I am always reminded!

[quote=JJxMan]First things first then. I suggest My-Kart be a club then. Next thing is, how do we raise funds. Then, the managing and activity forsee-ing body.[/quote]

Need to explore this further. Any downsides to further expansion? Profit and investment decisions would be difficult in a club structure, I believe.

[quote=JJxMan]To make things work, My-Kart must still retain it's Amateurs League and start planning in scouting potential drivers.
Meanwhile, Sponsorships? How do we approach? without a track record, I don't think it'd be possible.
And I personally think City-Karting is out of the question too.[/quote]

The amateur league is the key. This is where dreams begin. And for those not serious in pursuing a racing career, it is relaxed and fun enough for them. I see this:

fun amateur league (K3 & K2) -->> serious amateur league (K1) -->> 125cc karting (existing 125 series) -->> beyond.

I think establishing the existing amateur league is the first step. As for sponsors, I agree that this is not so easy. Even for those who've been in the sports for years, still struggle. So, we need a strategy to address this issue. Linking up with some big names would help.

[quote=JJxMan]Since My-kart's credo is "Popularizing Grassroot Motorsport", I've actually thought of maybe bringing some of our good drivers in taking Race License, or maybe better still developing a Race Development Programme where in turn we'd not only see My-Kart drivers in Karting but also in Junior Formulae or Perhaps F3000. Not thinking formula 1 so far.[/quote]

That is the direction. The first step is getting sufficient numbers into karting - at least the Rotax 125.

[quote=JJxMan]But first, there must be an entity and also a backbone and brain's of this entity. Backbone will come in terms of funding. Funding will come in sponsorship (maybe in 3 yrs time) but the brains behind it is more imporatant, such as making sure how things will run, organizing and so forth. Maybe we'd see a My-Kart Racing in the upcoming WRGP in 2010?[/quote]

Yes, the entity is key.

eravelly

Fri, 04 Mar 2005 - 17:51

Very interesting discussion Fazz. Yusnee and I were talking about this awhile ago and I was telling him about National Autosports (NASA) in the States and how it got started. Their website is located at www.nasaproracing.com. Very similar to the road My-kart is taking now. Bunch of friends started out doing parking lot drags and time trials. The founders Jerry Kunzman and Ali Arsham then realised there was a need for controlled track events where people could take their street cars out on the track. To supplement these HPDE events they started a one make racing series with the first generation RX7's. These cars were available for less than US$1000 and with sponsorships from Toyo tires and smart camber suspensions, you could go racing for less than $1500. The fact that they called the race series NASA Pro Racing and provided cash prizes as well as contigencies from companies and sponsors grew the racing to other series, and eventually to what they are now. In addition they would franchise the idea to different regions around the country at a defered cost (actually free), and would support them with all the regulations, sponsors, name and the Speednews publication. With NASA Central Region, South, North, East, West etc until the sanction grew. NASA is now one the premier racing sanctions in the US with regions as far as Australia.

Basically, Jerry's idea was always focused towards profit. He did this by creating EVENTS, for both racers and spectators. In addition he looked at providing packages to regions that signed up with sponsors, rules etc. Also they would have conferences for racers to learn about sponsorship and how to provide value to a sponsor.

Income comes from a yearly membership as well as entrance fees to compete at events. In addition through building a network of like minded racers and performance car enthusiast he was able to also sell advertising in the publication. The lectures and conferences are provided free as an introduction but then the extended talk is charged for.

There are a lot of holes to fill in this country when it comes to Motorsports and I think My-Kart has the potential to do it. My company was recently approached by a rally driver for sponsorship. I asked him to forward me a proposal and he sent me a powerpoint presentation that was sorely lacking in what a sponsor would want. He mentions that he was featured in a Star newspaper article but didn't send me the article. The entire presentation was on the driver and co-driver with their bios. What I needed to know as a sponsor was what value would he provide to me, the number of spectators, media coverage, target audience of the races etc. Eric Yeoh also passed me a sponsorship packet prior to last years MME. Although better than this guys, it was still bad.

So talking about driver development is not just in skills level to get to higher racing series. At the end of the day this is a business and I think a group like My-kart can trully position themselves to be a stepping stone to higher levels by offering not only a means to develop driver skill but also their understanding of the business.

Anyway, this comment has turned into a book. Will talk to you more if interested.

See you at Race 2.

Brian

[quote=eravelly]Anyway, this comment has turned into a book. Will talk to you more if interested.[/quote]

Brian
This is excellent stuff. There's a lot of learnings here. I am quite clear about the objectives, but at the moment struggle to come to a landing on the appropriate legal structure.

Joey suggests a club approach... but I feel there is a limit on profit-making activities. I welcome more discussion on this subject.

In essence, the my-KART entity should be allowed to be managed as a business. Expansion is part of the plan. I had previously toyed with the idea of franchising out the programmes etc.

Sponsorship procurement will be a key activity: I expect to have a central sponsorship unit to procure and deploy sponsorship throughout the country.

Talent management also is important. To popularise the sport, you must have a proper "career" route for those who want it. Training drivers on technical analysis, racing skills, PR/media handling, etc are all part of the driver and talent management programme.

There's lots to do, so I can plan to have a my-KART conference for keen my-KART members who'd like to further develop the group. I would like to leverage on the spirit of the open source collaboration seen in the software industry.

Do let me know who's keen.

Fazz,

Was talking to the subsidiary company CEO. We are currently setting up a center in PJ called A+ for automotive enhancement solutions. One of the bungalow houses on Jalan University. This could be a base of operations and a place to meet for My-Kart if you are interested. Will talk to you more about it tomorrow.

Brian

[quote=eravelly]Fazz,

Was talking to the subsidiary company CEO. We are currently setting up a center in PJ called A+ for automotive enhancement solutions. One of the bungalow houses on Jalan University. This could be a base of operations and a place to meet for My-Kart if you are interested. Will talk to you more about it tomorrow.

Brian[/quote]

Sounds good.

5 days 10 hrs ago was the last time anyone posted anything on this topic. So what's it going to be? MyKart Race Club or MyKart Grand Prix?
The discussion on the topic seems to be quite cold since the last posting by the Fazz. What's up in everyone's mind? I'd give .2cents for everone's thought.

[quote=JJxMan]5 days 10 hrs ago was the last time anyone posted anything on this topic. So what's it going to be? MyKart Race Club or MyKart Grand Prix?
The discussion on the topic seems to be quite cold since the last posting by the Fazz. What's up in everyone's mind? I'd give .2cents for everone's thought.[/quote]

Having weighed the pros and cons, the immediate thing to do is go for the club, and let it grow and then consider corporatising it. I will need a few volunteers to become the protem members to form the club. Will discuss further when I return from Singapore.

I agree with what Brian said. In the end of the day, competitive racing is a business, like it or not as alot of money will be involved, trust me, even in Karting. We've to have funding from sponsorship and we've to have a track record for the sponsors to sponsor and not just a nice pictures of the drivers from Kindergarden to Secondary school like what Brians company has encountered.
There are things My-Kart can and cannot do. My-Kart can organise events for participants and spectators to gain income as so as having annual fee collection as income.
Sad to say, however, in Malaysia, with the decrease in the ringgit, I don't think the RM10 from each participant in the My Kart race and charging the spectators will generate alot of income. Say there are 60 racers, 60x RM10 = RM600 a month from the monthly races isn't going to be able to put even 1 car in the competitive professional Karting grid nationally. (Cost of putting 1 Kart in National events is at least RM10k to RM15k per annum.)
Of course, I'm not throwing cold water entirely at the idea of generating income from the above ideas. What I suggest, is a bigger source of income. If you'll are willing to listen, I'd be willing to post my proposal. However, before we come to this step, may we first discuss, what type of entity should My-Kart be?
Club? Assosciation? Sdn Bhd? Bhd? What is the body for Formula 1? an enterprise if I'm not mistaken. That could be a good idea too.

I think My-Kart should just concentrate, that is when My-Kart is what I dream la, and also if my dream is Fazz's dream also la, in Open Wheel Racing. Production cars isn't a good idea seriously. Hard to explain by typing, but those who has raced will know. It's just that it's a different branch of a tree all together.