Checklist for How to Start an RV Park

Depending on the area, the estimated cost per RV site is $10,000 to $20,000. A RV park can fit up to ten sites per acre.

Brad Nakase, Attorney

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Since they started dating, David and Emily have always loved taking camping trips in their RV. Together, they have traveled across America, visiting national parks and local destination spots. After getting married, David and Emily decide to turn their love of RV camping into a business. They want to start an RV park together, where people from all across the country can come to enjoy the great outdoors. From their adventures, David and Emily know that to start an RV park, they need to have a vision of what they will provide their customers. They must decide not only where to locate the park, but also what kind of amenities the park will provide. They quickly realize that there is a lot that goes into starting an RV park, and it will be necessary to create a business plan. David and Emily begin to research all the factors that go into starting an RV park so that their dream can become a reality.

Is Starting an RV Park a Good Idea?

Not only do the great outdoors provide an excellent opportunity for camping with family and friends, but they can also make an entrepreneur’s dream of business success come true. Starting an RV park not only offers the chance to enjoy the outdoors, but they also enable an entrepreneur to meet other like-minded individuals from all over the country. There is also the exciting fact that managing an RV park allows one to join a $9 billion industry, where the sky is the limit when it comes to success.

Recently, there has been enormous growth in the camping industry as Americans seek to appreciate the country’s unique natural wonders. As a result, recreational vehicle sales and rentals have exploded in recent years. With more RVs on the road, there is a greater demand for RV parks that provide accommodation and space for recreation.

The RV campground business caters to a diverse set of consumers. These include young adults living in specially-design vans, senior citizens enjoying their retirement, and families with young children on vacation. In 2015, over 40 million people went camping, resulting in over 587 million days spent at campsites. That comes out to over two weeks spent camping per person. For all of these individuals, young and old, novice and veteran, a great RV park can lead to lasting memories.

One of the advantages of running an RV park is the fact that there are so many locations to choose from. An entrepreneur could pick a park close to a national park or monument, a city, or a private attraction. Whichever location one chooses, there will be an abundance of campers as the popularity of camping increases with each passing year.

Still, the success of an RV park depends on several factors. These include the location, size, amenities provided, and nearby attractions. There are also the challenges of business structuring, zoning, licensing, as well as meeting local and federal requirements.

How to Start an RV Park Checlist

It is wise for an entrepreneur to come up with a business plan to set goals and track progress. Having this preparation will keep a business focused. What should be included in a business plan for an RV park? There are a few considerations to be made, including the following:

Location

Location is a big factor when it comes to building an RV park. First, one should pick a location that is popular with campers. Perhaps the location will be near a national park like Yosemite or Yellowstone. However, while these locations will draw a lot of customers, a business owner should be aware of how big an RV park can be in those specific locations. This factor may limit the number of campers one can host at one time, thereby limiting the business. One should also keep in mind how close the RV park would be to major highways and roads. Is the location convenient and accessible? This question also impacts how popular the RV park will be with campers.

Land Use Requirements

An RV park must comply with local, state, and federal laws and regulations. These laws concern everything from utilities to open spaces to fire protection.

Attractions and Activities

When opening an RV park, a business owner should consider the purpose of the park. Is it just a spot to camp overnight before continuing onto a destination? Or is the park a destination itself, with on-site activities? Perhaps the park has a fair or farmer’s market that attracts campers and keeps them occupied for a few days.

Franchise or Independent

An independent RV park allows a business owner to run the site however he or she prefers. The owner will also get to keep all of the profits. However, there are advantages to franchising. Joining Campgrounds of American (KOA) or other groups provides a small business owner with premade business plans and marketing. This gets a business owner’s park up and running faster than might be possible on one’s own.

Seasonality

Because RV parks’ popularity may vary by season, pricing will often depend on the time of year. During low seasons, for example, camping in the RV park may be cheaper. Also, depending on the location, the RV park may need to shut down due to weather. This may apply for locations in the mountains where snow and inclement weather makes roads dangerous.

The Market

It is important for RV park owners to know their market. While camping is becoming popular across the board, it is wise to consider what sort of customers visit one’s park. It is essential to meet their expectations and provide the appropriate amenities and services. For example, if a lot of families visit a particular RV park, the owner should strongly consider offering a shop for snacks and installing a playground for children.

How Much Does It Cost to Start an RV Park Business?

When an entrepreneur decides to start an RV park business, he or she will need to think about whether they want to run a single park or operate multiple parks. Regardless of which option he or she chooses, and entrepreneur will need to consider how best to structure the business. Usually, the better options are to structure the business as either a corporation or a limited liability company (LLC). Why is this? Technically, sole proprietorships or general partnerships are valid entity options. However, an RV park business would gain more from the taxation and liability benefits that come with LLCs and corporations. Liability protection is especially important for the owner of an RV park. If someone were to get injured while on the property, for example, then a limited liability company protects the owner from being liable in a lawsuit. The owner would not lose his or her home, car, or personal savings in a judgment.

Therefore, the best move for a new RV park owner would be to start out as an LLC. The process of creating an LLC requires some work at the beginning, such as paperwork, filing fees, and annual fees. However, it is easier and cheaper to start than a corporation. An LLC is also advantageous because it allows for more freedom in how the company is structured and run. An operating agreement can help the LLC’s owners and managers control day-to-day operations and stay organized. If the business owner wishes to convert the LLC to a corporation one day, he or she is free to do so.

Other than the costs of setting up the business entity, there are additional costs associated with starting an RV park business. All aspects of getting the park up and running need to be accounted for: buying real estate, construction, excavation, zoning, landscaping, inspection, and utility installation. These are just some of the costs that should be factored into business planning and financing.

To provide an example of cost planning, let’s examine KOA’s requirements for franchisees:

  • Minimum liquid assets of $500,000
  • Minimum rental inventory of 90 total sites, including 75 RV sites
  • At least 10 usable acres of land
  • $1,800,000 – $2,250,000 average cost

It would be wise to estimate the total cost per campsite. This usually comes out to $15,000 to $50,000, including 10 RV-ready sites per acre of land. Non-equipment costs include the following:

  • Land acquisition, environmental impact studies, and zoning applications
  • Permits
  • Franchise fees
  • Business licenses, filing fees, taxes, cost of establishing LLC/corporation
  • Construction and inspection fees
  • Market surveys of the area
  • Landscape blueprints and plans
  • Payroll
  • Electricity, water, sanitation
  • Online reservation system

It is also necessary to advertise one’s business using various types of marketing techniques. These marketing strategies may include online ads, social media campaigns, billboards, brochures, and partnerships with RV dealers. Smart investments in advertising can lead to a steady stream of bookings. Also, one must never forget the importance of a sleek, well-run website. It is worth budgeting for a good design, development, content, and hosting.

How Should an RV Park Owner Fund Startup Costs?

When a business owner considers how to finance his or her startup, their first impulse may be to turn to a bank. However, it is actually easier to receive government assistance than to be approved for a bank loan. The United States Department of Agriculture (USDA) and the Small Business Administration (SBA) employ lenders who may have significant experience in the RV and recreational industry. Their interest and expertise in this area may make them more open to helping an entrepreneur opening an RV park. SBA 7(a) loans offer up to $5 million that can be used for land purchases, construction, supplies, technical equipment, machinery, and furniture.

In addition to the government, a small business owner may also receive assistance from commercial lenders and private investors.

While making these financial decisions, an RV park owner should be sure to open a business bank account and apply for a business credit card. The account will help an owner keep track of cash flow and better understand the financial health of the business. A business credit card will help build the company’s credit as well as earn rewards. It also helps to spread out payments for purchases, which may be a wise financial move in certain situations.

Besides Funding, What Are Some Other Things a Startup RV Park Owner Should Do?

For the owner of a new RV park, there are other matters to consider besides funding. The first of these is the name of the park. This will play an important part in registering the business, as well as advertising it to travelers and adventurers. The name should be unique and interesting enough that it makes customers want to visit. It should include hints about what the park offers, whether that is amenities, location, or proximity to a destination.

Example A: Glacier Lake RV Park is an appropriate name for a campground near a national park or site of natural beauty.

Example B: Thousand Pines RV Park and Campground is an appropriate name for a forested location that offers a good place to experience nature through camping.

Example C: Dusty’s RV Park is not an appropriate name for an RV park. It says nothing about the location, amenities, or nearby destinations. Customers have no idea what camping experience awaits them.

However, there is more to naming a business than simply coming up with a descriptive name. A business owner must perform due diligence, making sure that no other business is using the name. A business owner should check every prospective name with the secretary of state’s business database. He or she should also check the availability of domain names by checking domain registrars. It is also useful to check social media to look for any companies that share a similar name or theme.

It is also possible to add a “doing business as” name, or DBA, when filing to create an LLC or corporation. This allows a business to have both an official name and a name used for marketing.

After settling on a name and picking a business structure, an entrepreneur can file the corporation or LLC with the state. He or she should also research what other licenses and permits may be needed. It is also necessary to file for an employer identification number (EIN), which may be received from the IRS.

When it comes to land use, requirements vary by state and county. It is a good idea to familiarize oneself with the inspectors and zoning personnel. One should pay special attention to meeting these requirements during the construction and startup process.

A business owner would be wise to invest in insurance for his or her RV park. Insurance needs may vary depending on the insurance laws in the area, as well as the size of the park, what sort amenities are offered, and payroll. It may be best to work with an insurance agent who can help a business owner find the best coverage for his or her park.

An RV park owner should also be aware of the equipment needed to start a park. This equipment includes the following:

  • Restroom supplies
  • Sanitation and janitorial supplies
  • Vehicles likes golf carts and pickup trucks
  • Utility hardware
  • Recreational equipment like grills, picnic tables, and sports supplies
  • Wi-Fi internet hardware
  • Signage
  • Waste containers
  • Fee collection stations

A business owner should also make sure that the park’s employees have all the tools that they need to perform their jobs. These tools may include machinery, computers, and payment processing devices.

When it comes to advertising the park to potential visitors, almost nothing is as powerful as social media. A business owner can post pictures of the campground on Instagram, make offers on Facebook, or tweet creative messages on Twitter. Having an internet presence can spread the word about the park as well as gain a fanbase, or followers. One should also remember traditional advertising, such as print brochures and ads in magazines. Whatever advertising method an owner chooses, it is essential to have a well-built website, because almost every customer will visit it for information or booking.

An RV park owner may also wish to consider a camping theme. Some parks are focused on a social cause, religion, or organization. There are also parks based on activities, such as boating, ATV riding, fitness, and cooking. One can also have a park focused on a particular demographic, which might be families or senior citizens.

Creating and running an RV park takes hard work and determination. However, there are plenty of opportunities to find success in this industry, all while enjoying the great outdoors.

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