How to Start a Campground
Camping is a lower-cost activity that gives consumers a chance to reconnect with nature and enjoy some time away from technology and other distractions. It also offers the benefit of being more economical than staying in a hotel, so many travelers may opt to camp while on a trip. Starting a campground can be an exciting business venture. By carefully planning the business and selecting an ideal location, you may be able to create a campground that attracts plenty of campers each year.
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. A few of those 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 is a type of business that can bring in reliable annual income.
According to IBIS World, the campgrounds and Recreational Vehicle parks industry experienced steady 6.4% growth from 2015 to 2020. That growth was driven by an increase in travel trips and vacations. Increased disposable income led more people to travel, and campgrounds provide a lower-cost alternative to hotels and other venues. The campground industry also benefited during the COVID-19 pandemic since these sites provide a low exposure risk.
IBIS World predicts that the industry will experience a decline in revenue from 2020 to 2025. That decline will be driven by volatile fuel prices and consumers seeking out more traditional accommodation types post-pandemic.
As of 2020, the campground and RV industry was a $9 billion market that encompassed 16,088 businesses. The industry employed 60,877 people.
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. According to Jellystone Park Camp Resorts, 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 – and campsites need to accommodate that. Creating a visually appealing campground with Instagram-worthy photo opportunities can appeal to social media influencers. Appealing to social media users can help a campground establish a social media presence simply by relying on campers to post about the location.
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.
A campground’s target market can vary. Some campgrounds may market to RV vacationers, while others may market to families seeking a log cabin living experience. A campground’s features and business model will help to define its target audience, but in most cases, a target market consists of travelers and vacationers who are looking for a lodging option that’s lower-cost and that gives them a chance to connect to the outdoors.
Skills, experience, and education useful in 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 is 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.
Checklist for Starting a Campground Business
Starting a campground can be an incredibly rewarding experience, but it’s important to make sure you’re prepared for the challenges ahead. Use this checklist to help get your business off on the right foot.
Step 1: Write a Business Plan
Before moving forward with your business idea, you’ll need to 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. This business plan is essential when securing funding from a bank or investors. Multiple sources have also identified that taking the time to develop a business plan increases success.
Related: How to write a business plan
Step 2: Choose a Business Entity
A business entity (also referred to as a business structure) refers to how a business is legally organized to operate. There are four primary business structures to choose from, which include the sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). Each type of entity has its own pros and cons, such as liability exposure, costs, and administrative requirements.
When deciding on which business entity is best for a campground, it normally comes down to the sole proprietorship and Limited Liability Company.
A partnership opens the owners up to unnecessary personal liability because if a partner does something to get the business sued, or runs off with cash from the business, the other partners are personally liable to repay.
The corporation can be a good choice to minimize liability risk because it separates the business assets from the owner’s assets. If the corporation is sued or certain business debts can’t be paid back, the owners aren’t personally responsible to repay them. The downside to the corporation is that it is more complicated than all the other entities and requires more administration than the LLC. If you plan on raising a lot of investment though, the corporation is usually the better choice.
That leaves the sole proprietorship and LLC.
The sole proprietorship is the least expensive and easiest entity to start which is appealing. The downside is the owner is personally liable should anything happen to the business, which is an important consideration. The LLC offers the ability to operate as a sole proprietorship with the liability protection of a corporation. Depending on the state, the cost to form an LLC runs from $40 – $500, which is pretty inexpensive for protecting the owners from business-related lawsuits and certain debts.
Related: Guide to forming your LLC
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!
IncAuthority - $0 plus state fees & free registered agent the first year!
ZenBusiness - $49 plus state fees & free registered agent for 1 year!
Step 3: Name the Business
Finding the perfect name for a business can be challenging. Not only does the name have to resonate with your customers, but it also has to be available to use.
Step 4: Select Your Location
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 to hike. 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 also 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 set up, a beautiful setting, or a location that’s close to highly popular tourist attractions. Studying what competing campgrounds do and don’t offer can help you to identify the ways you can make your own campground unique and desirable.
Be sure to check on zoning regulations so you can legally operate commercially and file for the proper construction permits.
Related: Choosing a business location
Step 5: Apply for Business Licenses and Permits
Some states and municipalities will require a campground license 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 to have a sales tax permit, Employer Identification Number, and Occupancy Permit, among others.
Step 6: Find Financing
Starting a campground can carry significant financial costs, and finding financing may be a necessary step in bringing your idea for this business to life. To get a business loan, a borrower needs to have good credit and should be able to personally invest 15% – 25% of the total start-up costs. A detailed, well-thought-out business plan with competitor research can also help to increase the chances of getting funding.
Step 7: Open a Business Bank Account
Keeping your small business and personal finances in separate bank accounts is important to track the income and expenses of your business and identify trends.
Many banks offer free business checking accounts, so be sure to find a cost-effective option for your business.
Step 8: Get Your Marketing Plan in Place
Marketing is essential both in starting a campground and in drawing in new campers every year. Common marketing techniques for campgrounds include social media marketing, online advertising, radio advertising, and direct mail. Networking with the hosts of local events and tourist attractions can also be a good way to drive referral business. Camper loyalty programs can help to encourage repeat visitors from campers in future years.
One important task while working on the marketing is developing an online presence. A website developer may be out of the budget, but Wix makes it easy for non-technical people to get a website running quickly and affordably.
Step 9: Get Business Insurance
There are several types of insurance to consider when starting a campground. A few of these include:
– General liability insurance helps to protect the business if a camper is ever injured while on the property.
– Commercial property insurance protects the business against damages that could occur to buildings or the property during an event like a fire.
– Flood insurance may be necessary depending on a campground’s location. This insurance can help to cover damages that could occur if the site were to flood.
The cost to insure a campground can vary depending on factors like the location and the value of its buildings. To get the best idea of what to budget for insurance, request, and review quotes from multiple insurance providers. When comparing the quotes, consider the differences between premiums, coverage exclusions, coverage limits, and deductibles.
Step 10: Hire Employees
Most campgrounds will need multiple employees to ensure that all shifts are covered. According to Glassdoor, campground attendants earn an average of $21,010 per year, though that salary can range from $18,000 to $27,000 per year. Salary.com reports that campground managers earn an average salary of $43,271 per year, though that can range from $31,751 to $62,763 per year.
A campground’s budget will also include related expenses like paid time off and worker’s comp insurance.
Related: Hiring your first employee
Step 11: Set up an Accounting System
Setting up an accounting system for your campground is critical to the long-term success of your business.
Staying on top of taxes not only keeps the business out of trouble with the government, but the numbers can be used to track and monitor trends and cash flow in the business and maximize profits.
The thought of accounting can be intimidating for a lot of new entrepreneurs. There are a number of ways of handling bookkeeping, from DIY to hiring a bookkeeper. These include:
- Pen and paper - Low expense, but difficult to track.
- Spreadsheet - Low expense, but easy to make errors.
- Accounting software - Medium expense, but owner typically inputs expenses. Some great accounting software programs include Freshbooks or Wave Accounting.
- Hire a bookkeeper - Higher expense, though very affordable at $100-$200 per month in most cases. A dedicated bookkeeper will probably save money because, in addition to handling all of the bookkeeping (so you can focus on the business), they also provide personalized tax advice and ensure the business is in compliance.
Find bookkeepers in your local area or use a service like 800Accountant.
How much does it cost to start a campground?
The cost to start a campground, especially if the business owner needs to purchase land, can be significant. Startup costs can run into well over $100,000, depending on the campground’s size and the amount of work that needs to be done to the land.
Some common startup costs for a campground include:
– Site purchase
– Site renovation and development, including the construction of buildings, RV hookups, and creation of utility hookups, plumbing, sewer, and fresh water supply
– Maintenance equipment
– Website and online reservation software
– Working capital to pay for the first few months of salary, utilities, etc.
How much can a campground owner make?
Campground income will vary depending on the campground’s size, amenities, popularity, and profit margins. CBRE Inc. provides an example of a lakeside concession-operated campground. The campground was completely renovated in 2010 and has 140 short- and long-term RV sites as well as five camping cabins. In 2018, the campground brought in $900,000 in gross sales. Of those sales, $300,000 were for extended stays, $400,000 were for short-term use, and day use fees made up $20,000 to $30,000. Retail and firewood sales encompassed $70,000 to $80,0000 of the sales, while equipment rentals and boat launch fees made up $80,000 to $90,000. This is an excellent example of the many potential income streams that exist in the campground industry.
Are there grants to start a campground?
It’s extremely rare to find a grant to start a campground. If you search for business grants, you will come across a lot of scams and misinformation. Occasionally an organization will offer grants to start a business, however, be skeptical and don’t provide any sensitive personal information or pay money to get more information.
Legitimate federal grants can be found at Grants.gov, and you can check on your state’s economic development office to see if they have any grants available.
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?