If you have a large patch of land sitting vacant, you might own the ideal location for a new campground. Many people have gravitated to the lifestyle for various reasons, from a love of travel to saving money on rent. Your facility could fulfill a need in your community while expanding recreational options for out-of-town visitors. If you’re not sure how to start a campground, here’s a handy guide.
Like with many new businesses, the easiest way to start an RV park or campground is to invest in a franchise. One of the most convenient ways to do this is with Kampgrounds of America’s Own a KOA program. Kampgrounds of America is the largest chain of campgrounds and RV parks in the United States, and studies have shown that businesses under the KOA name can expect a 19% bump in registration revenue in their first year.
Working with an established franchise provides the perfect blend of training and support with entrepreneurial freedom that helps many people succeed. These business structures work by giving you access to proprietary information, a knowledge base and trademarks in exchange for a fee.
Franchising offers multiple advantages and is the easiest way to learn how to start an RV park. The most obvious is access to a recognizable brand name. Marketing is a huge expense for many businesses, and establishing a reputation can be tough, especially in highly competitive marketplaces. Some owners choose to switch to a franchise model for brand name recognition alone.
Additionally, you gain access to the franchisor’s management knowledge, procedures, processes, financial toolboxes and metrics. Essentially, they will provide most of what you need to get your business up and running, with guidance on everything from how to set up your books to hiring staff.
Franchisors must also provide you with information, including the fees and expenses you’ll have to pay, a list of approved vendors and suppliers, and estimated performance expectations. Buying a franchise doesn’t convey ownership of the business — it’s more akin to renting one for five to 30 years.
Disadvantages of franchises include the upfront cost, need to pay ongoing royalties and limitations set by the franchisor. Additionally, companies limit the number of locations in a given region, so if one already operates near you, you may be out of luck or have to travel farther than you might prefer.
Additionally, owning a franchise means abiding by the franchisor’s rules. You may have different management ideas, but you’ll need to get approval before making significant changes to established protocols. Most companies prefer to keep things uniform between locations to preserve the brand’s reputation, but some entrepreneurs might find staying inside the lines too stifling.
If you’re new to the business world, working with an established campground franchise, such as a KOA, teaches you the ropes. It’s easier to embark on any new venture when you have a reasonable expectation of profits. You can always invest what you earn into a different, independent entity later if you find yourself heading in a different direction than the franchisor.
It can cost a pretty penny to start an RV park. In general, you’ll need about $500,000 in liquid assets and $40,000 for the initial franchise fee. Additionally, you’ll pay an annual fee and royalties based on your reservation revenue.
Costs vary if you go the independent route. Each jurisdiction has different permitting and licensing rules, so you’ll need to come up with the money for that. You’ll also need a business plan, a method of tracking income and expenses for tax purposes, legal representation and, of course, the cost of your plot and any improvements. Knowing what you can afford to lose by drawing up a budget for your project is a must.
Photo by Leon Bublitz on Unsplash
Another consideration is the location. If you got lucky and purchased property near a national forest or BLM land beloved by hunters, you’re in luck. However, those aren’t the only hot spots for campgrounds these days, and you may have more options than you think, even in urban areas.
For example, many people prefer RV living over struggling with high rents or sharing space with multiple roommates. Learning how to start a trailer park effectively launches a tiny home community, and starting such a facility in your town can bring considerable benefits by providing an affordable housing solution. You must be careful with regulations, however. Many jurisdictions specify the minimum land size you must own to start such a business.
However, many people go camping to enjoy an immersive experience in nature. Campgrounds in rural areas can work if the surrounding environment offers peace and solitude. For example, if you own 40 acres formerly used for farming but now returned to the wild, starting an RV park or campground for hunters during doe and buck season could line your coffers to help you survive the winter, too.
Your campground might be quite bare bones or a luxurious glamping destination. However, many jurisdictions require specific amenities, such as a septic system. You’ll need to obtain the requisite permits before starting your business — be sure to get a solid understanding of the requirements to stay compliant with legal obligations.
You have many decisions to make. For example:
If you work with an established franchise, you’ll often receive a ready marketing plan that you can use to market your property. Those going solo in learning how to open an RV park must investigate the best strategy based on what they have to offer and what the community needs. Some successful marketing strategies include:
Learning how to start a campground need not be difficult if you work with an established franchise. It can be more difficult if you go it alone, but that’s also an option. If you own vacant land, opening an RV park could provide affordable housing in your community or a needed recreational amenity for hunters and vacationing families. Join the hospitality industry without building a hotel by owning a KOA or similar property.
Cover Photo by everett mcintire on Unsplash
* This post is a sponsored article written in collaboration with our guest contributor, who has financially supported its publication.
Alex Quin is a full-stack marketing expert and global keynote speaker. Founder and Chief Marketing Officer of UADV Marketing - a member of the Forbes Agency Council.
