Recreational vehicles are a popular way to vacation, whether for a weekend getaway or a road trip across the country. If you love to RV, opening an RV Park could be an opportunity for you to use your passion to make a living with your own business.
An RV Park provides sites for RV drivers to stay for the night for a fee. Sites have power, water, and sewer connections for the RV. Some also offer sites for tent camping and amenities such as Wi-Fi, barbecue areas, pools, restaurants, and more.
According to IBIS World, the Campground and RV Parks market size is $6.2 billion as of 2021, up 13.7% from 2020. Over the last five years, the growth rate has averaged -1.9% per year, but this number was heavily impacted by a large decline in 2020 due to the pandemic. Camping is popular with a large number of people in the United States. According to Statista, in 2017, 41.8 million people participated in camping.
The popularity of RV camping is due in large part to the fact that it is much less expensive to rent an RV site than other forms of lodging. The industry is expected to grow as the pandemic winds down, and people are ready to get on with their favorite activities. According to RVtravel.com, 53,000 new campsites will be constructed in 2021 to meet demand.
Your target market will be RV travelers, as well as other campers if you choose to have tent camping sites in your RV park.
Skills, Experience, and Education Useful in Running an RV Park
There are several specific skills that you will need to open an RV park.
- Experience. Experience traveling to RV parks is valuable in order to know how they operate and what they offer.
- Knowledge of RV Parks. You should do extensive research to find out the logistics of building an RV park, including the power, water, and sewer connectivity.
- Business knowledge and experience. You will need to have at least some basic knowledge of marketing, finance/accounting, and human resources.
- People skills. You’ll need to build rapport with your customers so that you retain them as customers and keep them coming back.
Costs to Start an RV Park
Here are the typical costs you will face when you open an RV park.
- Setting up a business name and corporation costs approximately $200.
- Business cards, brochures, postcards for marketing $200 – $300
- Land – $1,000 – $20,000 per acre
- Campsite preparation (leveling, gravel, concrete, septic tank, sanitary facilities, bathrooms, play areas …) – $50,000 + depending on the location’s size and amenities.
- Utilities – Connections with 15-amp, 30-amp, and 50-amp and outlets for 110/120 volts. – $1,500 and $3,000 per site.
- Zoning applications and permits $1,000 – $5,000
- Insurance $600 – $1,000
Steps to Starting an RV Park
Step 1: Write your Business Plan
After coming up with the idea, the next step in starting your RV Park should be to write a business plan. The business plan will make you focus on some important aspects of the business, such as who your customers are, how you plan to reach them, projecting sales and expenses, your value proposition to use for marketing, and more. You’ll also need to do some research to calculate exactly what your startup expenses will b, and your ongoing expenses.
Not only will a bank require you to have a business plan if you need financing, but multiple studies have shown that having a good business plan increases the odds of starting a successful business. Writing the plan helps you to think through all the aspects of the business, and then serves as a guide as you begin.
Step 2: Name the Business
Finding the perfect RV Park name can be challenging. Not only does the name have to reflect what you do and be appealing to customers, it also has to be available to use. You can check your state’s website to see if the name is available and register your name. Your name should make you stand out, reflect your brand, and tell potential customers exactly what you do.
Step 3: Form a Business Entity
A business entity refers to how a business is legally organized to operate. There are four primary business entities to choose from, which include a sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). Each type of entity has its own pros and cons, such as asset protection, costs, and administrative requirements.
Related: Comparison of Business Entities
Step 4: Select your Location
Location is critical for an RV park. Successful RV parks should be near local attractions with convenient highway access, but the better the location, the more expensive it will be. You also need to find a location that will be favorable to be zoned as an RV park.
With land prices likely being the largest expense and the price per acre varying significantly depending on the location and access to utilities, be sure you have ample space. If funds are tight and you can’t purchase all of the property needed, consider making an agreement with the landowner to give you the first right of refusal if someone else wants to buy the joining property.
Related: Choosing a business location
Step 5: Apply for Business Licenses and Permits
RV parks will need to obtain several permits and licenses to operate. The costs for permits will vary by municipality, and some will limit the number of sites. In addition to the permits, there will likely be regulations on utilities, wastewater disposal, and campfires burning as well.
Step 6: Find Financing
Coming up with a good business idea and having the skills to run it are one thing, but getting the funding to start an RV Park is another. In order to get a loan, the borrower(s) will need to have good credit and be able to invest 15-25% of their money towards the total start-up costs.
Step 7: Open a Business Bank Account
Keeping your business and personal finances in separate business bank and credit card accounts makes it easier to track the income and expenses of the business.
Step 8: Get your Marketing Plan in Place
An RV park will need to set aside a budget to cover marketing costs on a continuous basis. Common marketing techniques for an RV park include social media marketing and online advertising, as well as road signage. Developing a website can be a significant expense, but it can also give your RV Park greater visibility online.
Step 9: Get Insurance
An RV park needs several types of insurance for full coverage:
General liability insurance can help protect you from third-party claims of bodily injury and property damage.
Professional liability insurance protects you from claims of professional errors or negligence that result in a financial loss.
Worker’s compensation insurance covers expenses like medical bills and legal fees that a business might face if an employee were ever hurt while working.
Insurance policies will vary. To get the most accurate idea of what to budget for insurance, request quotes from multiple providers. When comparing the quotes, consider not only the premiums but also how the plan exclusions, coverage limitations, and deductibles compare.
Step 10: Hiring Employees
You will need employees to help you run your RV Park. Make sure that you select people with appropriate experience.
In addition to salary costs, your budget will also need to include other employee-related expenses. Workman’s comp insurance, unemployment insurance, and paid time off are common expenses that a business will need to cover when hiring staff.
Related: Hiring your first employee
Step 11: Set up an Accounting System
Setting up an accounting system for your RV Park 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.
How Much Can You Potentially Make Owning an RV Park?
If you rent your sites at an average of $50 a night and your sites are rented 70% of the year, you would make $12,775 per year in revenue per site. If you have 50 sites, you would make $638,750 in revenue per year.
Additional amenities such as pools, playgrounds, and laundry facilities can be huge selling points and help command a higher price per night if the budget allows.
Things to Consider Before Starting an RV Park
Running an RV park, or any business will have its challenges. You need to be prepared, and make sure that you know what you’re getting into.
Finding the right location and preparing it will take a significant amount of time and money unless you purchase an existing RV park. Either way, you will be investing a large amount of money, and it will take time to see a return on your investment.
You will also have many laws and regulations that you will need to stay on top of to make sure you are in compliance. It will be an ongoing process.
Be sure to consider the varying types of RVs and trailers your guests will have and be sure to have different sized spaces to accommodate them. Some guests will have large motorhomes and 5th wheels requiring pull-through spots, while others will have smaller trailers and popups. Also, tent campers will need some space too, so don’t forget about them.
The facilities must be clean, and perhaps most important, having clean restrooms and showers is critical to having customers return to your park.
As the internet becomes more important in today’s connected world, offering good wifi is a requirement for many RVers. Even though this is an additional cost to set up, customers will be more than willing to pay extra for it.
There is a seasonality factor for most RV parks. You will need to adjust your prices based on the season, and plan for down times.
Adding amenities to your RV park can be profitable, but will also require a large investment.
Talk to other business owners for tips on starting a business and do your homework to determine costs. Research other RV Parkes to see what they offer and what prices they charge.