Embrace the great outdoors and venture into the booming world of RV parks, a business model that combines hospitality with the love of travel. With startup costs ranging from $50,000 to over $1 million, you will need a firm grasp of hospitality management, local zoning regulations, and savvy business skills to navigate this industry successfully.
The demand for RV parks is solid, especially in tourist hotspots and near natural attractions, where the average profit margins can range from 10% to 30%. Ready to park your doubts and drive into the exciting journey of owning an RV park? Let’s discuss the ins and outs of starting an RV park business.
|Estimated startup costs can range from $50,000 (small, basic park) to over $1 million (large, high-end park with amenities).
|Knowledge of hospitality management, marketing, local zoning and land use regulations, and general business management.
|Steady demand in tourist areas and near natural attractions.
|Location is key, with proximity to tourist spots and natural attractions being ideal.
|Regular business hours likely include weekends and holidays during peak tourist season.
|Permits and Licenses
|Business license in some areas, health department permits, and compliance with local zoning and land use regulations.
|Typically ranges from 10% to 30%, depending on the location, size, and amenities of the park.
|Land acquisition, compliance with zoning and land use regulations, and managing seasonal fluctuations.
Whether you want to run one RV park or have ambitions to own and operate multiple properties, you’ll typically want to consider structuring your business either as a corporation or a limited liability company (LLC). Sole proprietorships and general partnerships are technically also entity options, but as a business, your RV park could benefit more from the tax advantages and liability shielding available with an LLC or corporation.
For example, if your RV park is structured as a sole proprietorship and is sued, your creditors can pursue your personal assets (your car, house, personal bank accounts, etc.) in addition to your business assets. With an LLC or corporation, that’s not the case.
Starting an LLC can be a solid business foundation. While it’ll have some setup work, initial filing fees, and annual fees, it’s generally less complicated and less costly to set up and maintain than a corporation.
You can also have more flexibility in how you structure and run the company, and an operating agreement can guide partners and managers about day-to-day operations. Plus, if down the road you decide a different structure is better for the business, you can convert an LLC to a corporation.
Your RV park’s name can tell customers what you offer and entice them with hints about the camping experience that awaits them. Coming up with a name requires due diligence, though. Your RV park name needs to be easy to understand, and it can’t be in use by another business. As you develop name ideas, check their availability with the business database at your state’s Secretary of State website, domain registrars, and social networks.
You can also add a “doing business as” name, or DBA, to your LLC or corporate filing. This way your business can have its official name behind the scenes, as well as a more marketable name known by the public.
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Once you’ve settled on your business structure, file your corporation or LLC with your state, and see what other licenses or permits your area requires. Your business entity will also need its own unique employer identification number (EIN).
Land use requirements will vary by state, county, and municipality. Also, get to know the inspectors and other personnel in charge of zoning and licensing, and be diligent about fulfilling the requirements throughout the construction and startup process for your RV park.
RV parks have varying insurance needs, depending on factors such as insurance laws in your area, park size, what sort of amenities you offer, and payroll. Consider working with an insurance agent to get the right coverage for your RV park.
Also, open a business bank account. From checking to credit cards, you’ll be able to better track cash flow and understand your business’ financial health.
Real estate, excavation, construction, landscaping, zoning, utility installation, and inspection are just a few of the costs you’ll factor into your business plan and financing. To give you an idea, franchises such as KOA break down their requirements for franchisees. While the specifics of your RV park will vary, it’s still a good idea to take a look at this general list.
Try estimating the total cost per campsite, typically $15,000 to $50,000, with 10 RV-ready sites per acre. Your non-equipment costs may include:
Marketing and advertising budgets will be essential, too. Online ads, billboards, social media, brochures, and RV dealer partnerships are just a few ways marketing investments can turn into bookings. Your RV park’s website is also like a 24/7 sales and service rep, so don’t forget to budget for design, content, development, and hosting.
Government assistance can be easier to come by than a bank loan. With the Small Business Administration’s SBA 7(a) loans, you can receive up to $5 million toward land purchases, new construction, and procuring supplies, technical equipment, furniture, and/or machinery.
Commercial lenders and private investors may be open to funding your startup costs as well. Lastly, consider opening a business credit card to build the company’s credit, accrue rewards, and spread out payments for purchases.
RV parks need a variety of equipment, which may include:
Also make sure your on-site personnel have the tools and equipment they need, such as hand and power tools as well as computers and mobile devices for processing payments, reviewing registrations, and managing check-ins.
Whether it’s specials posted on Facebook, video tours on YouTube, drool-worthy destination photos on Pinterest, or day-in-the-life snapshots on Instagram, social media can help spread the word and build buzz about your RV park. Also, review online directories such as Google Business Profiles. Claim and optimize your RV park’s profile so potential customers have a greater chance of finding your business when they’re researching RV parks in your area.
A park brochure, ad in a tourist booklet, and other print materials can also be a great way to get your business in front of people’s minds. Finally, you don’t need to spend hours upon hours building a website and email marketing campaign, thanks to today’s prepackaged options.
America’s growing interest in camping is your opportunity to specialize your RV park:
An RV park will take land, investment, and hard work, but the opportunities for a profitable, successful business are there. As you plan and build your RV park, you can turn your dream into a reality, all while enjoying everything the great outdoors has to offer. Here at ZenBusiness, we can start your dream business for free (+ state fee), helping keep your startup costs low and providing a resource you can count on.
Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
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When it comes to compliance, costs, and other factors, these are popular states for forming an LLC.
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