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How To Start A Campground In 2023

How To Start A Campground In 2023

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How To Start A Campground In 2023

How To Start A Campground

If you have a love of nature, starting a campground can be a great business opportunity. Campgrounds provide the perfect escape and accommodation as more people seek authentic and accessible outdoor experiences.

Starting a campground isn’t as simple as just buying some land and putting up a few tents. There’s a lot to consider, and this guide aims to walk you through the essentials.

Business Summary

Campgrounds serve as temporary lodging locations for campers and vacationers. At its most basic, a campground may be a lot of a few acres for tent spots and/or hookups for Recreational Vehicles. More developed campgrounds can be much larger and may have individual campsites, cabins, bathrooms and showers, and other amenities. Many campground facilities offer both short-term and long-term stay options, and campers favor these spaces for the chance to be immersed in nature.

Campgrounds can earn income in many different ways depending on their business structure. Some potential income streams include usage fees, retail sales, equipment rentals, and more. Campgrounds with activities located right on the grounds, like boating, have even more potential revenue options.

Owning and managing a campground becomes a lifestyle until the business is large enough to hire a full-time manager. This can be an ideal business venture if you love nature and are willing to live on the campground. Be prepared for lots of hard work during the first few years, but once well-established, this type of business can bring in reliable annual income.

Overview of the Camping Industry

The camping industry has seen a steady rise, particularly in recent years. According to the North American Camping Report, there’s been an increase in camping participation across various demographics. In a report from IBISWorld, the campground and RV park industry has grown steadily over the past five years, with industry revenue expected to increase by 8.2% to $8.7 billion by 2023.

As consumers continue to seek affordable and unique accommodation options, the industry is forecasted to continue moderate growth. The industry has low market share concentration and is comprised mainly of small, independently owned and operated businesses. This creates opportunity for aspiring entrepreneurs to stake their claim.

The campground industry is quickly evolving, and a campground owner who’s aware of current trends can keep the site competitive and appealing to consumers. Campgrounds are traditionally busiest in the summer, but off-season camping is becoming more popular. More and more adventurous campers are participating in extreme winter camping. Campgrounds that offer cabins can appeal to those who are less thrill-seeking but who also enjoy venturing out in the winter. Campgrounds in areas with less extreme winter temperatures can more easily take advantage of this trend, but there’s also an opportunity for campgrounds located near ski resorts and other winter attractions.

While camping gives campers an opportunity to disconnect, more campers stay connected to technology. For instance, WiFi access has become a must-have feature for many campers, and campsites need to accommodate that.

Campers are increasingly demanding more from campgrounds. More families are seeking an all-inclusive experience that’s closer to a resort than a basic campground. Combining the elements of nature with modern amenities can make a campground more appealing to today’s campers.

Checklist To Start A Campground

Starting a campground involves more than just knowing how to pitch a tent. Let’s make sure you’re setting off on the right foot, by going through this checklist!

Step 1: Market Research

The great outdoors beckon and the idea of running your own campground stirs the soul, but hold your horses. Step one is all about researching whether there’s enough demand for this kind of business in your chosen location. You’re about to make a considerable investment, financial, emotional, and time-wise, making this initial research phase arguably one of the most critical steps.

To research whether a campground will be viable in your area, you’ll want to assess factors like:

  • Demographics: Is there a sizable population and target customer base? Analyze population data, tourism patterns, and recreation preferences.
  • Competitor saturation: How many existing campgrounds and RV parks operate nearby? Are they at full capacity? Also, what do their customer reviews say? A thriving competitor is a good sign, but too many might mean an oversaturated market.
  • Camping/glamping trends: Is camping interest growing based on travel and leisure trends in your area?
  • Local attractions: Are there natural amenities, recreation, and attractions to draw customers?
  • Tourism trends: Contact local and state tourism bureaus. These organizations can offer firsthand insights into tourist numbers, seasonal fluctuations, and the types of activities tourists are seeking.
  • Zoning and development: Do local zoning laws and land use enable campground development?

Doing your homework in these areas will give you a clearer picture of whether your idea is feasible.

Step 2: Scout Potential Locations

When it comes to a campground, location is everything. You’ll want a location that’s easily accessible from local highways but that’s also tucked away enough to immerse campers in nature.  Locations near a major tourist attraction such as a lake, ski area, national or state park, or trails for horseback riding or hiking are ideal. Aesthetics matter greatly in drawing campers to a campground, so a location needs to be beautiful in most or all seasons, too. The location can affect the cost of the land, so it’s important to weigh all of these factors in finding a location that will be profitable yet affordable.

Campers will have their choice of nearly countless campgrounds, so when planning out your business, consider what will make your campground stand out. This might be sought after amenities like free Wi-Fi or a glamping setup, a beautiful setting, or a location close to highly popular tourist attractions. Studying what competing campgrounds do and don’t offer can help you identify how you can make your campground unique and desirable.

When researching potential locations, you will want to see what’s the situation with water, electricity, and waste management. Will you need to dig a well or install septic systems? These are significant costs that you’ll need to factor into your budget.

Also, be sure to check on zoning regulations to ensure it’s zoned for campground use. Zoning regulations vary by location, so check with local authorities or a real estate lawyer to understand what’s allowed. And no matter how impressive this location is, hold off on signing any agreements until you have secured the funding.

Step 3: Write a Business Plan

Before moving forward with your business idea, you should write out a detailed campground business plan. This business plan will outline all of the elements of your business, including your target market, services offered, and your research about the industry.

Having a business plan is like having a GPS for your business journey. It not only acts as a roadmap, guiding you through each stage of starting and running your campground, but it also helps you get all those swirling ideas out of your head and onto paper. Moreover, if outside funding is needed, a business plan is typically required.

If seeking funding, there are certain sections of your business plan that need close attention. Here’s a rundown of my recommendations:

  • Market analysis: This section should demonstrate a deep understanding of the market, including customer needs, trends, and competition. Explain why your campground will succeed in the current market. For instance, perhaps there’s a gap in the market for a luxury camping experience, or maybe the local area is seeing an increase in tourism. Lenders want to see that there’s a demand for your business and that you understand the competitive landscape.
  • Management team: The people behind a business can often be a determining factor in its success. Whether it’s just you or you and a group of seasoned professionals, this section should detail the experience and skills each person brings to the table. Show how your team has the skills and knowledge to make the campground successful.
  • Location: In the campground business, location is more than just a setting; it’s a key selling point. Highlight why your chosen spot is perfect for attracting guests and how it aligns with your market research. Maybe it’s close to popular tourist attractions or offers unique natural vistas. Whatever the reason, make it clear why your location is a strong asset.
  • Marketing and sales strategy: While this section is often underemphasized, it’s worth adding. Lenders like to see how you plan to attract customers. Outline your pricing, sales tactics, and advertising strategy, focusing on how these will help you gain market share in the campground industry.
  • Financial projections: Banks and other lending institutions will scrutinize this section closely. They need to see that you’ve made reasonable revenue forecasts and that the numbers add up to a profitable business. Include balance sheets, cash flow statements, and profit and loss projections. Use conservative estimates and back them up with data where possible.

Before presenting your business plan to a lender, it’s a good idea to have someone else review it. A business owner or accountant can provide valuable feedback and identify potential issues that you may not have considered. This step can help ensure that your plan is as strong and persuasive as possible when you present it to a lender.

Related: How to write a business plan

Step 4: Source Funding

After you’ve confirmed a market exists for your campground and your business plan is in top shape, the next hurdle is funding. Financing the start of your business can be tough, but understanding your options can make a significant difference.

Personal savings: The first place many entrepreneurs look is their own bank account. Personal savings offer the most straightforward way to finance your campground, but it’s rarely enough to cover all the startup costs. If you’re falling short, you’ll need to explore additional avenues.

Here are some common sources of outside funding for campground businesses:

Bank loans: If personal savings aren’t enough, bank loans are a very common source of funding. Banks typically require borrowers to invest around 15% to 25% of their personal funds into the business, have a good credit score, and offer sufficient collateral. If a bank feels the loan is too risky, they might opt to use a USDA or SBA loan guarantee to reduce their risk exposure.

Friends and family: Friends and family can also be a valuable source of funding. They might be willing to invest in your business or lend you money on more favorable terms than a bank. However, it’s essential to put all agreements in writing to avoid misunderstandings that could harm your relationships.

Investors: Local individuals with higher net worth might be willing to invest in your campground. However, securing investment can be challenging as many investors look for high-growth, scalable businesses. It’s important to present a compelling business plan that shows potential for profitable returns on their investment.

Securing funding can be one of the most challenging steps in starting a campground, but with careful planning and persistence, you can find the financing you need to bring your vision to life.

Related: Finding the money to start a business

Step 5: Register the Business

Starting a campground isn’t just about scenic views and happy campers; there’s some paperwork to sort out. Making your business legal involves several steps that may vary from state to state. From choosing a business structure to securing the proper licenses, here’s what you need to know.

Choosing a business structure: The first step is deciding on the business structure that best suits your needs. The four main types of business structures are sole proprietorship, partnership, corporation, and Limited Liability Company (LLC).

  • Sole proprietorship: This is the simplest form to set up and involves the least amount of red tape. It’s easy and cost-effective but offers no liability protection. In a sole proprietorship, your personal and business assets are one and the same, so you’re personally responsible for all debts and legal issues.
  • Partnership: This is an option if you’re teaming up with someone. However, like a sole proprietorship, it offers limited protection from liability. Profits and losses are split among partners, who are individually responsible for debts.
  • Corporation: This structure provides personal liability protection, separating the owner’s personal assets from business assets. It’s more complex to set up and involves higher operational costs.
  • Limited Liability Company (LLC): This is a hybrid structure combining the liability protection of a corporation with the ease of administration of the sole proprietorship or partnership.

A sole proprietorship may be the easiest and cheapest to set up, but it exposes you to personal liability. On the other hand, LLCs and corporations offer liability protection but involve more paperwork and higher fees. Your choice will largely depend on the scale of your campground and how much personal financial risk you’re willing to take.

Related: Comparison of business structures

Forming an LLC sounds complicated and expensive, but using an entity formation service guides you through the process so you know it was done right.

Some popular LLC formation services include:

IncFile - $0 plus state fees & free registered agent for 1 year!

ZenBusiness - Best for beginners. $0 plus state fees & free registered agent for 1 year!

Northwest - Best privacy protection. $39 plus state fees & free registered agent for 1 year!

Business name registration: After registering the business structure, you may need to register your business name. This process will vary depending on what business structure you pick. Sole proprietors and partnerships will often be required to register a “Doing Business As” (DBA), while corporations and LLCs register with the state during the formation process.

Related: Tips and ideas for naming a campground

During this time, it’s also a good idea to check if the name you want is available as a web domain, even if you’re not ready to set up a website yet.

Related: Finding a domain name for your business

Obtain business licenses and permits: Some states and municipalities will require a campground license, land use permit, or licenses related to health, safety, or lodging. Research and apply for all required state and local campground licenses before opening. As a part of licensing, an affidavit from an engineer may be needed certifying the campground is up to code.

In addition, a campground will need to obtain general local, state, and federal registrations to start the businesses. Most businesses need a sales tax permit and Employer Identification Number, among others.

Related: What licenses do campgrounds need?

Step 6: Acquire & Develop the Property

The moment has arrived; you’ve got the funds, and your business is officially registered. Now, it’s time to transform your plans into something tangible—your very own campground. This is where the rubber meets the road, and all your preparation starts to pay off.

The process of acquiring the property for your campground begins with ensuring that your funding is securely in place. This is important because funding can sometimes be delayed or even denied, causing complications if you’ve already entered into a contract. Once your finances are confirmed, you can proceed with the purchase. However, before signing any contracts, verify that the property is appropriately zoned for a campground. The last thing you want is to acquire a property only to find out you can’t operate your business there. Conduct thorough due diligence; it will save you headaches down the line.

Once the property is yours, it’s time to get it ready for your guests. The amenities you provide will heavily influence the type of campers you attract. Tailor your offerings to your target market, whether they’re families, RV enthusiasts, or back-to-nature campers seeking a more rustic experience.

For instance, you might need to install electrical hookups for RVs or build restroom and shower facilities. If you plan to have a communal area, you may want to add picnic tables, fire pits, or a playground.

Will you have hiking trails, fishing spots, or perhaps a general store? Maybe a kid-friendly area or pet facilities? Balance your offerings between what will attract your target audience and what fits within your budget.

Step 7: Hire Staff

As your campground starts to take shape and hiring employees is part of the plan, it will be time to start the hiring process. Depending on the amenities provided, campgrounds hire a mix of staff, from maintenance and housekeeping to front desk and activity coordinators. But before you hang that ‘Now Hiring’ sign, legal requirements must be addressed.

Every state will have different requirements, but let’s review some general tasks. For starters, you’ll need to get an Employer Identification Number (EIN) from the IRS. This is like a social security number for your business and is required for tax reporting. You must also verify the employment eligibility of all new hires, which means reviewing proper identification and completing an I-9 form for each employee. And don’t forget labor laws; these dictate employee rights regarding minimum wage, benefits, and working conditions.

Related: Hiring your first employee

Step 8: Create a Marketing Strategy

As you get ready to open your campground, the next step is to let people know about it!

Traditional methods like brochures at local tourist offices, partnerships with nearby attractions, and roadside signage are still quite effective. Also, hosting fun events at your campground and participating in local community events can also help increase visibility and attract potential customers.

Now, let’s talk about online strategies. Social media is more than just a trend; it’s a way to engage with your audience. Creating a visually appealing campground with Instagram-worthy photo opportunities can appeal to social media influencers. Utilizing Utilize Facebook to post regular updates, share customer testimonials, and even create targeted ads can be effective as well. Appealing to social media users can help a campground establish a social media presence simply by relying on campers to post about the location.

Claiming your business on relevant online directories is another important step. In addition to Google Business Profile, TripAdvisor, and Yelp, consider registering with camp and school enrichment directories. This improves your online presence and makes it easier for potential customers to find you.

Related: Low-cost ideas to market a new business

Step 9: Prepare to Open!

As you approach the finish line in getting your campground up and running, there are still a handful of essential tasks that need your attention. These tasks may vary from business to business, but these are common loose ends many campground owners need to address:

Business insurance: Protecting your assets and investment with the right insurance is critical. Important policies include general liability, property, workers’ comp, and business interruption insurance.

We recommend getting at least three insurance quotes, including local insurance agents and online providers like Coverwallet or Hiscox to get the best coverage and price.

Bookkeeping: A well-organized bookkeeping system is a must. Whether you hire a professional or use software like Wave Accounting (FREE) or Quickbooks, staying on top of your finances will save you headaches down the road.

Bank account: Opening a dedicated business bank account helps keep your personal and business finances separate and makes tax time much easier.

Management software: Investing in specialized campground management software can be a game-changer. Examples include Campground Manager, RMS Cloud, and NewBook. These platforms often combine point-of-sale systems, reservations, and customer management all in one.

Pricing: Carefully set your pricing strategy based on market research, your offerings, and your overhead costs. Consider tiered pricing for peak and off-peak seasons.

Credit cards: Must have for convenience today. Set up merchant services account to accept credit/debit cards. Popular providers include Square or Stripe.

Industry associations: Joining industry associations like the National Association of RV Parks and Campgrounds (ARVC), Kampgrounds of America (KOA), or your state’s specific campground owners association can offer networking opportunities, professional development, and valuable resources.

Grand opening: Last but not least, plan a memorable grand opening to make a splash in your community. Stock up on necessary supplies, train your staff, and make sure all amenities are good to go.

Greg’s Tip: Your revenue will likely be highly seasonal. Plan your finances accordingly.

Greg's Business Tip

Common Questions When Starting A Campground

How much does it cost to start a campground?

Launching a campground can be a substantial financial undertaking. Total costs can easily exceed $1 million for even a modest facility.

Some key expenses to factor in include:

Land acquisition: Budget $200,000 to $2 million+ based on acreage and location.

Site development: $15,000 to $50,000 per RV/campsite for grading and utility hookups.

Amenities: Bathhouses ($75K), store ($50K), pool ($100K), rec center ($250K+).

Roads and landscaping: $200,000+ for interior roads, parking, and beautification.

Permits and fees: $5,000 to $15,000 for licenses, permits, tap fees, and professional services.

Equipment and supplies: $50,000+ for mowers, utility vehicles, tools, and office supplies.

Initial marketing: $15,000 for branding, website, ads, and materials.

Insurance: $5,000 to $20,000 annually for comprehensive business policy.

Staffing: Salaries, training for office, maintenance, cleaning.

Keep in mind that these costs are estimates and can vary based on factors like location, size, and the specific amenities you plan to offer.

How profitable is a campground?

The profitability of a campground business can vary greatly depending on factors like location, size, amenities, and the time of year. Let’s consider some industry statistics to illustrate potential revenue, expenses, and profit.

A common formula used in the campground industry to estimate potential revenue is the number of sites multiplied by the average rate per night, then multiplied by the number of nights the site is occupied each year.

For instance, if a campground has 100 sites, charges an average of $40 per night (the average campsite cost in 2022 was between $30 and $50 per night), and has an occupancy rate of 150 nights per year, the potential annual revenue would be $600,000 (100 sites * $40/night * 150 nights).

Typical operating expenses range from 40-60% of total revenue. Using an expense rate of 50%, the 100-site campground example would have approximately $300,000 in annual expenses. This includes labor, utilities, maintenance, insurance, property taxes, marketing and other costs.

Therefore, the estimated annual pre-tax profit for the 100-site campground would be:
Revenue: $600,000
Expenses: $300,000
Profit: $300,000

This provides an overview of the profit potential for a modest sized campground. Profitability increases with more sites, higher rates, and expanded amenities. While costs are significant, campground ownership can be a profitable venture when well executed.

What skills are useful when running a campground?

Running a campground doesn’t require a business degree, but certain skills and experiences will help run this business.

Camping experience: Previous experience camping can be an advantage, giving a campground business owner a detailed understanding of what amenities and experiences matter most to campers.

Outdoor knowledge: Knowledge and awareness of the outdoors are essential when running a campground. A business owner will need to be aware of potential dangers, like animals that are native to the area. This awareness can help to keep campers safe.

Familiarity with the area: A campground business owner who knows the area well can refer campers to the best restaurants, sightseeing spots, and activities in the area, making their stay more enjoyable.

First aid experience: Even with precautions in place, campers can and will get hurt. First aid knowledge and training are valuable to have.

Problem-solving skills: Creativity and excellent problem-solving skills can help a campground owner deal with the challenges that arise during daily business operations.

Carpentry and repair skills: A campground owner who has some basic carpentry and repair skills can do some of their own maintenance and even create quick fixes that can hold a campground over until a professional repair person can be called.

Customer service skills: A campground owner with strong interpersonal and customer service skills can help create positive experiences for guests. These positive experiences can result in a good reputation and valuable repeat and referral business.

What is the NAICS code for a campground?

The NAICS code for a campground is 721211.

The NAICS code (North American Industry Classification System) is a federal system to classify different types of businesses for the collection and reporting of statistical data.

Related: What is a NAICS code?

How To Start A Campground In 2023

How To Start A Campground In 2023

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