To put things into a perspective, I started a company in 1991 with an estimated initial budget of 250K based on very specific information on similar companies. Being very conservative in spending I only exceeded the budget by 5K when there was an additional 6 month delay. The initial investors wanted to pull the plug when I and my partner bought them out. The extra time this bought us allowed for the survival of the company. A sad statistic is that most companies do not survive to see their five year anniversary and most of them require more investment than expected in both money and time to stabilize. With that said, and the knowledge of commercial development, I would not invest with that projected budget unless you had a location which had already been built out for that type of facility, which had documented mismanagement. The last build out with which I have been involved was a school in an existing building just needing up-fitting. That budget was just north of 1.5 million not including the purchase price of .5 million for the building and ~5 acres. Leasing a large enough facility and doing the up-fitting will require a commitment of some type of extended term, generally 3 - 5 years, which for a new company will require a personal guarantee with sufficient net worth to cover of some type of escrow account. That alone could tie up your initial budget of 250K.
I mentioned this discussion to a friend who is involved with a potential development in Hillsborough of a 16 acre brewery, distillery, restaurant, and meeting facility. He sent me this link which looks to be of similar size and scope. It may be of help in making the decision. The total outlay seems pretty reasonable given the scope. http://www.bplans.com/amusement_park_business_plan/company_summary_fc.php
That looks pretty solid. $5.5M seems like a much more appropriate number. Most people underestimate the costs involved with construction. The average go-kart track today is between .25 and .75 miles in length and roughly 20-25' wide. Just to pave that, you are looking at around $100-200k, not including the other costs for site preparation, grading, bumper walls, karts (~$50k), etc. I would be impressed if you could get some land and build a mini-golf course alone for under $200-300k. Site prep, permits, land, landscaping, electrical, parking lot, etc. all add up way more than most people imagine.
I would seriously recommend going to https://www.score.org. They have an incredible amount of information and resources and it's all free. It has an excellent section on startups and raising capital. I would also HIGHLY advise you to get signed up in the mentor program. There are many local business men and women who donate their time to mentor aspiring entrepreneurs You have direct contact with them and most have been been CEO's, CFO's, and Presidents of companies. I know a father and son who contribute their time to this program. The father is now retired but was a CFO for one very large company and one medium sized company and he took them both public before retiring. Those are definitely people who you want to have in your corner Good Luck!!
Financing is also never as easy as some may imagine. Lenders do not want risk. Investors do not want risk. All of them want return on investment and the better the return for the least risk the better. Local bankers are never the decision makers either, there are loan officers in the headquarters or some other central location who must be convinced by the local representatives. Commercial loans do not want just collateral but assurance of significant payment. Business collateral or property must be liquidated into cash before they can show a ROI to their investors. Investors also do not want to wind up with anything which must be liquidated in order to recoup their investment because there is almost never a good return. Much like when you drive that new car off the lot, the value drops. Any property may be tied up for years in order to show a profit, which still may not be the level of return they want. Generally that is when one can get very good buys on both equipment and property if that is your goal.
