What should I do to my cr85 to start racing it?

Take it to a suspension expert and get the suspension set to your weight. Other than that race it as it is and learn. People who think that as raw beginners they need all the extras to compete at that level are misguided. You can only use the power that your ability will allow you to and if the bike has motor work done and heaps of extras to increase power it will actually make you slower till you can use it. Plus things like chucking an aftermarket pipe on the bike won't do much good if it has not been set to run that pipe. If you have money to burn you can get a few niceties that can also make life easier like aftermarket foot pegs and unbreakable levers and you should have a good spares box with things like tubes and levers and perhaps different sprocket sizes, different tyres, etc. So it is all a learning exercise and your time when not out on the track should be used listening to the other riders and their mechanics as to what type of tyre suits what conditions and what settings they have their bikes on. Watch other riders on the line and see what the better riders do as far as gate selection and body position on the bike. Different start surfaces require different start techniques and your riding will improve immensely just learning all these little things. Talk to the other riders after a race and talk about what lines into and out of corners were best. Walk the track before you race if allowed and even afterwards and analyse your race and what you did right and wrong.

you have to realise that the best condition that a motor will ever be in is STONE COLD STOCK!!! when it starts to break is when you need to start modifying it because it is dramatically losing power and preformance. so you cant mess with your engine or tranny until it gives you problems. what you need to do is get a lower tooth front sprocket and a bigger back sprocket. This will give you more acceleration which will be perfect on a racetrack. It also wouldnt hurt to lengthen your mono shock...(suspension under your seat) I have been racing for many years and money can buy the fastest bike BUT, 90% of what wins races is how the rider rides... also your tires should be filled at 17psi...