Let me ask you a question to begin with: What’s common between Bruce McLaren, Eddie Jordan and Gene Hass?

If you have no clue, then the “clue” is in their surnames.

These 3 guys started their own Formula 1 teams from scratch: McLaren Racing, Jordan Grand Prix, & Haas F1.

Now that we are done with trivia for the week, let’s dive right in!

There are 2 ways to start a Formula 1 team.

1. Buy an already existing team & rebrand it.

2. Build a new team from scratch.

Buying an existing team is a lot cheaper than starting a new one because if you buy a team, you'll get all the factories, facilities, & employees, as well as a lot of other things, handed to you on a platter by the other team, and this will also take a lot less time to get things rolling.

Now, let's be honest, buying an existing team is a bit boring. You aren’t reading this article because you have shitloads of money sitting in your bank account & you are researching on the internet to buy a team, so let me continue the thought experiment & let me tell you how to start an F1 team from scratch & everything that’s involved.

Anyway, before I get the above assumption wrong, those billionaires out there reading this who genuinely have the money to start their own team, please don't take this blog as a cue to do so.

There's an old saying in motorsport: The quickest way to become a millionaire is to be a billionaire and start a Formula One team.

And if you have still stuck around & you do have that kind of money to splurge around, then let me tell you that you cannot buy an F1 team for less than $750 million, & the top teams like Mercedes & Red Bull are valued at over $3 billion, so that’s the number!

With that little disclaimer out of the way, let me tell you how to start your own Formula One team from the ground up.

For anyone who knows a little about Formula 1, you’ll know that money is the name of the game. The more you can invest & spend, the greater your chances of success in this sport.

As you'd expect, it is quite a difficult and complicated process to start a new team.

There are essentially 4 things you need in place.

• Money - Capital, Investment & Sponsorship

• Infrastructure - Facilities, Equipment & Machinery

• People - Employees, Crew & Drivers

• Operations - Entertainment, Logistics & Travel

Money | Finances

The first and most important aspect of starting a team is money (at least nine figures); without it, you have zero chances of starting an F1 team.

Since I have established that money is crucial, here are a few ways to go about sorting out the cheques for your F1 team.

First, you need an initial investment, which can either come out of your own pocket, provided you have hundreds or possibly thousands, of millions to spare, or you can convince individual investors to contribute to starting a team.

However, due to the fact that it's counterintuitive to make a profit in Formula 1 racing, it might not be the best investment for people to make, so be careful about who you take the money from.

Gathering together a serious amount of initial cash is only half the battle. You also need tonnes of sponsors, as I explained in my blog on “How F1 teams make money”. Sponsors contribute a significant amount of money each year in order to keep an F1 team afloat. Sometimes this sponsorship amount contributes to half of all the income in a year.

Let’s say even if you do sort out both the hefty amount of cash and solid sponsors, as per the new Concord agreement by the F1, this year you will have to pay $200 million as a joining fee to the Formula One management.

For argument's sake, let's say money isn't an issue. So what do you need to spend your money on to get the team up and running? Here’s the following:

Infrastructure - Facilities, Equipment & Machinery

There are numerous details to consider with machinery and other heavy equipment used in an F1 car. The number of components produced in-house can vary from team to team. Some teams build everything in-house, and some teams survive because they buy a lot of components.

For instance, Haas F1 Team has managed to sustain its operations by buying many off-the-shelf components, such as the engine, gearbox, chassis, and all other listed parts under the regulations from Ferrari and Dallara, as this allows Haas to save millions on research & development costs that would otherwise arise from building these components in-house.

If you are looking to save costs, following a similar approach could be beneficial.

People | Employees

While you may have the funds for the facilities, you also need manpower, commonly known as employees, unless you're planning to manage the entire team on your own.

The number of employees in a Formula One team depends on the amount of funds invested. Mercedes, for example, employs about 1400 people, while Haas has just under 250.

These employees typically fall into one of five categories:

• Technical Roles: These employees design various parts using computer software like CAD. Once they design a component digitally, they send the information to the people in the factory.

• Factory & Operation Roles: These team members manufacture the components. This can involve welding, operating a CNC machine, or managing electronics. Once the car is designed and built at the factory, it's sent off to the race tracks along with the trackside team.

• Business Roles: These roles are crucial for a Formula One team as they organise the team's day-to-day operations. They include marketing, human resources, public relations, partnerships, accounting, and other administrative roles.

• Pit Crew: This group includes trackside engineers, mechanics, technicians, and photographers. There are typically 50 to 75 people per team at any race weekend.

• Directors and Drivers: These roles are not just restricted to the Team Principal/Director & the 2 Drivers but also include Technical Director, Commercial Director, Chief of Aerodynamics, Chief of R&D, Chief Designer, etc.

Operations | Logistics

Operations here mean everything that you need for the team to travel from race-to-race every couple of weeks in different parts of the world & set up various mobile facilities, & make sure things work as intended. These include freight & transportation of all the equipment to races, whether by road, air, or sea. You also need to consider transporting the mobile facilities, such as the motorhome, pit wall, computers, and other tech needed for trackside operations.

Moreover, travel costs for the 50 to 75 employees working at each race weekend also need to be factored in. The logistics of a Formula One team are extremely complex & complicated. There are hundreds of things that can go wrong every week, such as lost freight, missed flights, & a lot of unforeseen circumstances.

Here’s an interesting video on how F1 team operations actually work:

How Much Does It Cost to Manage an F1 Team Every Year?

Like everything else, the amount of money that each team spends each year is also dependent on their investments & sponsorship generated.

In 2022, the operating costs for the Mercedes team exceeded $400 million overall, from operations and marketing to mechanics and driver salaries. Whereas Haas F1 spent approximately $150 in the same year.

F1 cars are built from scratch each year. The R&D costs add up to about $50 million and about $2.5 million to build each car. These cars last for one season before ending up in museums!

So…Are You Crazy Enough?

Starting an F1 team requires significant funds, state-of-the-art equipment, hundreds of employees, and a willingness to take on substantial risk. And that's just to start the team. The real drama, suffering, and challenges begin when you start racing.

Insights on “How to Run a Formula One Team” will have to be saved for another article sometime in the future.

If you found this blog interesting, share it with that friend who’s crazy about F1 & get a perspective.

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