How To Open a Campground

A well-written business plan is essential once you determine what type of campground you want to establish. A plan can guide you through the early stages of the process and provide a blueprint for its operations once it opens. Additionally, if you need outside financing or a loan for startup costs, most lenders and investors will ask for a viable business plan.

Executive Summary

Almost all successful business plans begin with a one- or two-page executive summary. This summary should provide an overview of your proposed campground business idea. Summarize key points for your readers clearly and concisely. The executive summary should also give the reader a reason to continue reading your business plan.

Business Summary

The business summary should give a general overview of the business and how much money it will need to raise at start-up. It should also lay out the structure of your company, the management team, and their structure.

Products and Services

This section lays out the services you hope to provide your campers and any products you want to sell. This section will help you access your business needs as well. Amenities and services to consider may include:

• Bathhouses and restrooms
• WiFi
• Clean water access
• Power stations
• Hookups for RVs
• Biking and hiking trails
• Dog walking area and park

If you’re leaning towards a more rustic camping experience, you may not need all these amenities. If you want to establish a glamping business, you could consider an amenities center, modern cabins or tiny houses, or a swimming pool.

While most people don’t think of campgrounds as an opportunity to offer products for sale, many campgrounds have a camp store. Campers often need food, drinks, firewood, rain gear, and picnic supplies that can provide additional cash flow.

Market Analysis

Is your target market looking for your services? Your market analysis should address such questions as:

• How strong is the tourism industry in the area where you want to operate?
• Who are your competitors, and are they successful?
• What are the advantages and disadvantages of the location?
• What rates are realistic, and how much occupancy can you expect in each season?
• Are the overall trends in the campground industry favorable for what you want to offer campers?

These are all questions you should consider when weighing your decision to open a campground business.

Financial Analysis

The financial analysis in your business plan should summarize the business’s economic plan. Include your income and expense expectations for the first three to five years of operation.

A campground’s location is key to its success. Most successful campgrounds are on attractive real estate where families want to spend their time. They are also close to other attractions that can entice many visitors looking for somewhere to stay.

Even if your campsite is near an attraction like a state park that already has a campground, you may still find success if the park’s campground is usually full or you can offer better amenities to your guests. For example, your private campground might offer a pool, more privacy, or the flexibility to host group events.

Consider two other key issues when looking for a campground location: access to fresh water and wastewater treatment. Some places are too difficult or expensive to sink a well if it does not have access to other water supplies. Additionally, installing an extensive septic system may be prohibited if your property is near a lake or an environmentally sensitive area.

Campground Zoning

Even if your campground is out in the country, it may still be subject to local zoning ordinances and regulations. This is especially true if it is near an attraction or heavily used rural area and the local government is trying to prevent overdevelopment. That means you should check with your local township and county to ensure you are even allowed to open a campground on the property. Also, check whether your plans will follow local building codes.

Leasing Properties

When looking for properties that meet your needs, you are not limited to properties for sale. It is not unusual for a campground to occupy a property under a long-term lease. This offers campground owners some advantages.

The most significant advantage of leasing is that you don’t need to come up with money to purchase the property by putting up your own funds, getting a bank loan, or seeking outside investors. Additionally, if the business should fail, you won’t be stuck with the property.

The primary disadvantage of leasing property for your campground is that you may not find another suitable property nearby. You will also be out of business if you lose your lease. It’s not uncommon for the property owner to see the success of a campground and decide that it would be more profitable to build and sell vacation homes on the land, especially if it has lake frontage or other sought-after amenities.

Many campers find their campgrounds on the internet. Your business name should use descriptive words that will generate interest from potential customers who find you on the web and may not be familiar with the area. If your campground is on the shores of a lake, consider including words like “lakeside" or “lakefront." Likewise, if your campground is in the hills or mountains, you could emphasize that by using words like "mountain view" in the name.

Once you have settled on a name, you’ll need to make sure it’s available for use in your state by checking if another business has registered it. Having a unique name is important if you plan to structure your campground as a limited liability company (LLC) or corporation. Both types of businesses must register in the state where they operate using a unique name that another business has not used. Fortunately, states operate online databases where you can see if your preferred name is already in use.

You will also need to check with the U.S. Patent and Trademark Office (USPTO) to see if another business has already trademarked the name. If trademarked and you still use the name, the trademark owner can take legal action against your company for infringement. You must stop using the name if a court finds in their favor. In some circumstances, you must pay legal penalties.

How you choose to structure your campground business entity can significantly impact how it’s run, your legal liability, and the tax you pay. Most U.S. campground owners have set up their businesses using one of four business structures:

• Sole proprietorships are businesses with a single owner that are not treated as separate legal entities. If you’re the only business owner of a company not registered with the state under a different structure, it’s usually treated as a sole proprietorship. That means the owner will be personally liable for all business debts and obligations. Still, all the business’s income and losses are "passed through" to the owners. The owners can claim them on their individual income tax returns with the IRS because the company is not taxed separately.

• Partnerships are businesses with more than one owner where the business is not treated as separate from its owners. Like sole proprietorships, the partners are liable for any business debts. But the partnership business is a pass-through entity for tax purposes. Any multi-owner entity not registered with the state under a different structure is usually treated as a partnership.

• LLCs are businesses registered with the state. LLCs offer the owner liability protection. Owners will claim the company’s profits and losses on their individual tax returns. As a result, the owners are not liable for the company’s debts. But the company gets treated as a pass-through entity for tax purposes, similar to partnerships.

• Corporations can register with the state as C-corporations or S-corporations. Both serve to protect their owners from personal liability for the business’s debts, but they get taxed differently. S-corporations are the same as a partnership for tax purposes, which means the company does not pay corporate tax. C-corporations are subject to federal corporate tax.

The right choice for your campground depends on many factors. Considerations include your risk tolerance, whether you have significant personal assets to protect, whether you have partners, and whether you plan on claiming a tax loss while the business is starting. If you’re having trouble deciding which is best for you, a local business attorney can help you review your situation and business plan to find the proper business structure.

Once you’ve made these decisions, establish a business bank account. You will need a business bank account before applying for any loans or financing.

It can be hard to find organizations willing to loan you the money to start a campground or RV park, no matter how good your business plan. Many banks shy away from loans to small businesses just starting, especially those with significant upfront expenses, like a campground.

Fortunately, the U.S. Small Business Administration (SBA) and the U.S. Department of Agriculture (USDA) have loan programs often lending to campground owners. The U.S. government guarantees these loans. Because lenders know the government will step in and cover much of the outstanding balance in the event of a default, these loans also tend to have smaller down payments than other types of small business loans.

SBA and USDA loans are not available to the operators of mobile home parks or campgrounds with RV facilities that earn their revenue from long-term residents.

Even if your site is zoned for use as a campground, you will likely need a construction permit from your state or local government before you start work if you are building facilities on the property. Additionally, you may need a campground permit or license before welcoming guests.

These permits are often necessary to construct the following on a property:

• Campground service buildings
• Cabins
• Water connections or wells
• Wastewater collection, treatment, and disposal systems
• Roads
• Gravel or concrete parking for vehicles, including at campsites

Other permits required by your state or local government can include:

• Sign permits
• Swimming pool permits
• Restaurant or food service equipment authorization
• Foodservice establishment permits
• Food protection certificates

Before you start any work on the property, you should meet with local officials to discuss your plans for the campsite. They generally encourage new businesses and can help you establish the licenses and permits you need. The SBA provides additional online resources to help you determine who you need to contact.

Camping can be fun but there are hazards. You want to make sure your business is protected from lawsuits for bodily or personal injury claims as well as have property insurance in the event of fire or natural disasters. Determine what insurance you need for your campground so accidents and other unexpected events don’t bankrupt your business.

Because many of your campground guests will be from out of town, you will need to market your campground to a far broader area than most local small businesses. Some popular ideas for marketing campgrounds include:

• Creating an attractive website that highlights the best qualities of your campground
• Joining and posting on various popular social media platforms
• Keeping an active presence on campground review sites
• Getting your business on the lists of local lodging options that local business organizations and governments provide potential visitors
• Partnering with local camping and RV outfitters to offer discounted services to their customers in return for promoting your campground

While word of mouth is helpful, you do need a marketing plan.