Opening a Campground: A Step-by-Step Guide
If you love the idea of working in the great outdoors while also helping campers enjoy incredible vacations, opening a campground could be the perfect business opportunity for 2022 and beyond.
Campgrounds and RV parks in the US did take a hit at the start of the pandemic, but the industry has recovered well to jump from a value of $5.48bn in 2020 to $6.32 in 2021. The 2022 forecasts suggest that it will be back up to the pre-pandemic $7.88bn within the next two years, and you can capitalize on their big return by starting your own venture right now.
This guide to campground planning and regulations, as well as daily operations, will help turn that dream into a reality.
Starting a Campground - Why Do It?
There are plenty of reasons to start a campground. Before thinking about land acquisition or marketing efforts, though, you must first do some research.
There are over 4,300 campgrounds throughout the US, which instantly highlights that they appeal to many business owners. Some of the main reasons people decide to get into this industry are:
- A better quality of life - when the bulk of your work is spent outdoors and supporting people in their leisurely activities, your mental and physical wellness can soar.
- A huge demand - before the pandemic hit, there were over 78 million people camping in the US, and the number kept increasing each year. As the pandemic slowly fades out, we can expect more people than ever to embrace camping and outdoor activities.
- Steady returns - while many people think of it as a seasonal business, popular campgrounds attract customers throughout the year.
- Post-pandemic suitability - a lot of Americans are traveling domestically once again but are not yet ready for overseas travel. This can boost campground profit margins significantly.
- Versatility - campground business owners can adapt many aspects of the venture, from plot size to on-site amenities to reflect their desires.
In short, starting your own campground is an enjoyable business model that puts you in control of your future. When you also consider the prospective financial rewards delivered by a huge potential client base, the appeal isn’t hard to appreciate.
How to Start a Campground
Campground businesses can be profitable, but you must enter the process with a winning strategy. Otherwise, you could experience delays, disruptions, and financial penalties. Following this simple 10 step guide will help you get your business off to a great start:
Step 1: Research Campground Operations
Knowing that you want to build a campground from scratch is a good starting point, but you also need to develop a clear vision of the site you wish to run. Are you looking to attract overnight RV drivers or provide the perfect destination for a camping vacation?
Stats show that six in ten Americans have a newly discovered love of nature, and you can embrace this through a wide range of RV park and campsite ideas. Some of the most popular choices include;
- Motorhome only campground
- Flyfishing campground
- Senior citizens campground
- Tent camping only campground
- Rafting and watersports campground
- Wildlife sanctuary campground
This is just a selection of the options at your disposal. Still, a clear understanding of developing an RV park in your mold can impact everything from profitability to your enjoyment of the work you’ll have to put in.
Step 2: Create a Business Plan
A detailed business plan is a document that can aid in finding funds, gaining the necessary campground licenses, and providing guidance in all aspects of business planning. It is a vital tool for opening a campground venture.
Business plan templates are readily available, including examples specific to this type of business venture. It can include mission statements, financial projections, design plans, and management strategies. Ultimately, it should answer key questions like:
- What are the costs of starting the campground?
- Who will you aim to sell campsites to?
- How much will you charge per night?
- What type of activities will you promote?
- How many campsites per acre can you fit?
- What will the business be called?
A good business plan will also detail logistical aspects, while further preparations will consider the logistical obstacles you may face before and after the launch.
Step 3: Focus on Funding
When working out how to start a trailer park or campground, finding funding will be one of the primary considerations. A $50k ballpark figure (plus any land acquisition costs) is probably accurate for a small LLC in this industry. However, a detailed business plan should provide a clearer insight. Either way, you must ensure that you have enough capital, as a lack of funding is the chief reason why so many startups (campgrounds or otherwise) fail.
Regardless of the cost to build a campground, you will want to consider the following funding options;
- Personal funding from your savings
- Traditional business bank loans
- Investments from private investors
- Crowdfunding opportunities
You’ll also need to factor in ongoing costs (we’ll discuss those later). If you can’t raise funds for buying a franchise or opening a campground of your own, the business won’t have a future.
Step 4: Register Your Business Entity
Before you start trading, you must register the business entity. Forming an LLC with minimal state LLC costs is the most prudent choice, not least because it protects you from personal damages should a visitor sue the company.
You will also need a registered agent service, but this is something all good LLC services will provide. Even if you’re looking at how to start a primitive campground that forgoes standard reservation campsites for remote options, letting your customers know that you are ready to open your doors to visitors is vital.
Other steps at this time include registering for taxes, opening a business bank account, and getting a company credit card.
Step 5: Obtain the Necessary Licenses
Licensing is probably one of the first issues you’ll research when looking at how to start an RV park, but it’s also very easy to overlook this once you have got the ball rolling. This industry employs over 50,000 workers and serves millions of guests annually. Sadly, businesses operating without the correct licenses can face huge fines and even closure.
The regulations for opening a campground can vary slightly in different parts of the country. However, you must be sure to comply with or obtain the following;
- Federal business licensing requirements, including state permits
- State permits and licenses to operate a campground business
- A Release of Liability
- A Certificate of Occupancy, which includes meeting zonal laws
Even when looking at foreclosed campgrounds or taking on an existing franchise, you must pay attention to the licensing requirements or face the consequences.
Step 6: Find a Location
The location of your campground is unquestionably one of the most significant features that can impact the level of planned bookings and passing trade from RV drivers that need a place to spend the night. For starters, land may cost significantly more or less than the national average of $12,000 per acre, depending on the state you are operating in and some other factors.
The location of your site will also determine, or at least influence a wide range of other related issues, such as:
- What activities can be completed on the campground
- Whether grants for starting a campground may be available
- When you can expect the peak season to be
- The demographics of your visitors
You may also find that the location will determine whether it’s possible to start a franchise or not.
Step 7: Build a Brand
Depending on your location, especially when situated between two popular tourist destinations, you may secure some overnight guests due to little more than geography. In most cases, though, establishing a brand that helps your site stand out from the crowd will be a crucial aspect of running your campground business well.
Your first goal is to ensure that you sell a good percentage of your available campsites frequently - don’t worry, even the most popular campgrounds aren’t 100% booked 365 days of the year. However, the strength of your brand may also allow you to charge more. This can be very important as RV camps charge an average of between $25 and $80 per campsite per night, although it is possible to fetch over $200.
Branding elements can range from the campground logo to deciding on your niche audience (families, senior citizens, etc.) Once you have a clear vision of the business you want to be, it’ll guide your web design, offline marketing, and general client interactions.
Step 8: Grow Your Team
Very few businesses can be managed with a single pair of hands. When you own a campground, getting a great team to support you will be essential for its success. With this in mind, knowing your EIN number and making the necessary preparations to legally hire workers will be essential.
You may require a variety of workers, including on-site employees and remote staff members as well as temporary contractors. Some examples include;
- Admin staff, including receptionists and customer care teams
- Maintenance teams for campsite facilities and amenities
- Campground activity leaders, cleaners, and catering teams
- Marketing and sales workers
- Financial advisors and legal workers
Staffing is one of the most significant ongoing expenses for a campground owner, so this is a key aspect to consider. Besides, when you have confidence in the team, you can maintain a clear mindset.
Step 9: Focus on Amenities
Some permanent campsite ideas are as simple as focusing on the campsites themselves, with not much else on offer. However, most good ideas also rely on the amenities and organized on-site activities for making a profit. The theme of your campsite, as discussed earlier, will determine what works best. Ultimately, it’s about providing unforgettable experiences to your visitors.
Of course, this will impact the expenses, including garbage disposal, payroll, permit renewals, inventory, maintenance on camp vehicles, and more. Likewise, you may need to consider the cost of equipment you hire out (such as fishing equipment).
While some campers look to save as much money as they can while camping, many others will spend a good amount while at your site. If you strategically plan the amenities and how to maximize your earnings, your business will have much higher chances of success.
Step 10: Opening Time
Finally, with all the above steps completed, you will feel ready to open your doors to the public. You’ve registered the business and a real estate LLC while also preparing the campsites, branding elements, and so much more. It may take time before you start to see the percentage of occupied spaces increase, but you can temporarily lower your prices while establishing your company on the market.
Following this, you will need to consider the long-term management and ongoing expenses for a campground. By now, you will have everything in place to run a successful campground business.
If opening a campground is a business venture you’ve considered for several years, now is the perfect time to do it. It’s a wholesome business that can improve people’s quality of life while earning you a pretty penny.
A campground business doesn’t cost much to start. In fact, most business owners can get their ventures started for under $50k and potentially as little as $10k. However, this does not include land acquisition, which will be the largest cost by far if you do not already boast a large plot.
As with any industry, there are success stories and failures. However, experts estimate that the average RV park owner can expect to see an ROI of 10-30%. Of course, this can only be achieved if you operate the business well. Still, it makes owning a campground stand out as a wise investment.
When thinking about how to build a campground, there are many variables that could impact the demand for land. This includes the type of campground (i.e., overnight park versus RV resort). As a rule of thumb, though, 5-6 acres can provide 45 campsites, which is enough to operate a profitable small campground.
The process of opening a campground can vary greatly depending on whether you have the land already, decide to acquire an existing business, or need to apply for permits. Still, you could open the site to campers within months and start to see profits right away. Ongoing maintenance is relatively minimal, so you should start seeing profits fairly quickly.
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