How To Open a Campground
If you love the outdoors and camping, it is likely that at some point, you have thought about opening a campground of your own. After all, it can be hard to resist the opportunity to turn something you love into a career. However, the realities of owning and operating a campground operation can often seem overwhelming and discourage many from pursuing their dreams.
But if you are willing to put in the work, building and running your campground can be a satisfying career choice that will give you the satisfaction of sharing your passion for the outdoors with others. There are thousands of profitable campgrounds currently operating in the United States, and if you plan for success, yours could be one of them.
The following sections provide answers to commonly asked questions about opening a campground and tips for helping the process run smoothly.
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Writing a Campground Business Plan
While you may believe the steps necessary to set up and operate a campground are self-evident, a well-written business plan is essential. A plan can guide through the early stages of the process and provide a blueprint for its operations once it opens. Additionally, suppose you need outside financing or a loan to fund your operations. In that case, most lenders and investors will ask to see a viable business plan before they will give you any money.
Almost all successful business plans begin with a one- or two-page executive summary. This summary should provide an overview of your proposed campground and summarize key points for its readers clearly and concisely. Additionally, the executive summary should give the reader a reason to continue reading your business plan.
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 how the company will be structured, 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. 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 serve as a source of additional income.
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?
The financial analysis in your business plan should summarize the business's economic plan that includes your income and expense expectations for the first three to five years of operation.
Finding a Location for Your Campground
A campground's location is key to its success. Most successful campgrounds are located on attractive properties 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 you locate 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.
You should 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, if your property is near a lake or an environmentally sensitive area, you may not be allowed to install the extensive septic system you may need.
Even if your campground is “out in the country," it may still be subject to local zoning rules and regulations. This is especially true if it is located 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 make sure that you are even allowed to open a campground on the property and whether your plans will comply with local building codes.
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, which offers campground owners some advantages.
The most significant advantage of signing a lease is that you do not need to come up with the 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 will not be stuck with the property.
The primary disadvantage of leasing property for your campground is that you may not find another suitable property nearby and will be out of business if you lose your lease. It is 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.
Choosing a Name for Your Campground
With an ever-growing percentage of campers finding 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, try to include words like “lakeside" or “lakefront." Likewise, if your campground is located 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 will need to make sure it is available for use in your state by checking if another business has registered it. Having a unique name is especially important if you plan to structure your campground as a limited liability company (LLC) or corporation because both types of business must register in the state where they operate using a unique name that another business has not registered. Fortunately, states operate online databases where you can check to 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 it has been trademarked and you still use the name, the trademark owner can take legal action against your company for infringement. Should a court find in their favor, you may be forced to stop using the name and, in some circumstances, pay legal penalties.
Choosing a Business Structure
How you choose to structure your campground business can significantly impact how it is 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 is not treated as a separate legal entity. If you are the only owner of a company that is not registered with the state under a different structure, it will usually be treated as a sole proprietorship. That means the owner will be personally liable for all business debts and obligations. Still, all of the business's income and losses are "passed through" to the owners, who can claim them on their individual income tax returns 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 treated as 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 that are registered with the state. While they offer the owner liability protection, LLCs are not themselves subject to tax, which means the 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 is treated as a pass-through entity for tax purposes, similar to partnerships.
- Corporations can be registered with the state as C-corporations or S-corporations. Both serve to protect their owners from personal liability for the business's debts but are taxed differently. S-corporations are treated the same as partnerships for tax purposes, which means the company does not pay the corporate tax. C-corporations are subject to federal corporate tax.
The correct choice for your campground depends on many factors, including your risk tolerance, whether you have significant personal assets to protect, whether you have partners, and whether you are planning on claiming a tax loss while the business is starting up. If you are 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.
Should You Buy a Camping Franchise?
If you are worried about whether you can set up and run a campground on your own, there are sometimes franchise opportunities that offer support and instant name recognition.
The two most well-known franchises in the U.S. are KOA and Yogi Bear's Jellystone Park. Both offer assistance with marketing, reservations, and training. It may also be easier to secure a business loan or outside investors if you have the backing of a well-known national franchise.
However, campground franchisees are also subject to quality standards and routine inspections that may limit how much you can personalize your campground. Additionally, you will need to have your location approved by the franchise, and they will often refuse to approve sites that would compete with existing franchises.
Financing Your Campground
As with many small businesses, it can sometimes be hard to find organizations willing to loan you the money to start a campground, no matter how good your business plan is. Many banks shy away from loans to small businesses just starting, especially those with significant upfront expenses, like a campground.
Fortunately, both the U.S. Small Business Administration and the U.S. Department of Agriculture have loan programs that often lend to campground owners. These loans are guaranteed by the U.S. government, which means that the government will cover most of the debt if the borrower defaults. 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.
The 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.
Licenses and Permits
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
- Water connections or wells
- Wastewater collection, treatment, and disposal systems
- Gravel or concrete parking for vehicles, including at campsites
Other permits that may be required by your state or local government 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 are generally encouraging of new businesses and can help you establish the licenses and permits you need. The SBA provides additional online resources that can help you figure out who you need to contact.
Marketing Your Campground
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 social networks like Facebook, Instagram, or Twitter
- 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
Additional Questions About Opening a Campground?
If you have more questions about what it will take to open a campground, meet with a local lawyer to ensure that you follow all of the required rules and regulations. A lawyer can also guide you on how to best structure your campground business to protect your assets and the possible tax implications of how you structure your business.
And when you are ready to start your campground business, use our simple DIY business formation process to ensure you meet all the legal requirements in your state.
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