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RV Park business plan for starting your own building firm
Are you exploring the most profitable way to commercialize your property? If so, you must search for how to open a RV park then. RV parks are basically made for tourists to park their RVs i.e. recreational vehicles that contain quarters for accommodation.
With cities of America becoming the top tourist destinations, tourists from around the world use RVs to explore the country. As they enable one to travel without having to stay at hotels or pay for airline tickets. Moreover, due to the availability of WiFi, travel lovers who have to earn as well, purchase RV vehicles to live their life to the fullest.
If you want to know how to start an RV park, you should study some business plans for RV park. You can also have a detailed in-depth of this business through this sample rv park business plan written for the startup, Grandeur Traveling.
Executive Summary
2.1 The Business
Grandeur Traveling will be a licensed and registered RV park startup. The business will be based in New York and will have its setup at 3 locations throughout New York. The business will provide a parking facility for RVs. Moreover, recreational activities, washrooms, laundry rooms, and play areas will be provided for RV travelers.
2.2 Management of RV Park business
Management is a crucial and difficult part of a business. Efficient management can be done by one who is capable of making instant decisions about diverse areas.
To make sure that your RV park run according to the clients’ expectations, you should include each of its detail in your private land RV park start up rv park business plan. Your rv park business plan should explain
- How you will turn your land into a perfect space for RV travelers
- How to set up an RV park
- How to manage finances for the startup as well as for future running of the business
- How to acquire and retain an efficient workforce all the time
2.3 Customers of RV Park business
Before exploring how to start a RV park, you should research your customer base. Grandeur Traveling identified that its customers can be divided into three groups: foreign tourists, domestic holidaymakers, and residents who live in RVs.
2.4 Business Target
Our business targets are to maintain a CSAT score of above 87% throughout our service years. The financial targets that we can achieve by meeting our net profit goals are demonstrated in this table.
Company Summary
3.1 Company Owner
Robert Crowe will be the owner of Grandeur Traveling. Crowe has done MBA from Binghamton University School of Management.
3.2 Why the RV Park business is being started
Crowe owns a huge property in New York. He rented business a part of his land but wasn’t satisfied with the profits generated. Finally, he explored other options to commercialize his property and decided to start RV park business.
3.3 How the RV Park business will be started
Step1: Plan your business
The first step before starting an RV business is to create an RV park business plan template. To make an effective rv park business plan for your startup you can take help from this RV park business plan sample. In this RV park business plan example we are listing everything about Grandeur Traveling from their startup expenses to financial planning.
Step2: Define your brand
The second step is to acquire the required licenses and permits. This is the time when you should establish your business base, set your business targets and values.
Step3: Start the recruitment
A business cannot earn success if its employees are not devoted, driven, and responsible. Crowe decided to conduct interviews to find the most suitable persons to run his business.
Step4: Get ready to promote & market
After you have set up your business and workforce, you should start working on ways to reach your target audience. Crowe decided to promote his services by offering several discounts to customers. And by utilizing Google Local ads services and other platforms to advertise businesses.
Step5: Establish a web presence
RV travelers are likely to search for RV parks through Google. So that they know where they can stay and park their vehicle beforehand. Chances are that they explore RV parks nearby their destinations two to three hours before their arrival.
Therefore, knowing the importance of establishing a strong web presence, Crowe decided to hire an expert web developer to develop his website.
The startup expenses of Grandeur Traveling are given in the table below:
| Start-up Expenses | ||
| Legal | $256,000 | |
| Consultants | $0 | |
| Insurance | $34,000 | |
| Rent | $27,000 | |
| Research and Development | $26,000 | |
| Expensed Equipment | $55,000 | |
| Signs | $4,100 | |
| TOTAL START-UP EXPENSES | $402,100 | |
| Start-up Assets | $324,000 | |
| Cash Required | $338,000 | |
| Start-up Inventory | $53,000 | |
| Other Current Assets | $202,100 | |
| Long-term Assets | $227,000 | |
| TOTAL ASSETS | $1,144,100 | |
| Total Requirements | $1,546,200 | |
| START-UP FUNDING | ||
| Start-up Expenses to Fund | $402,100 | |
| Start-up Assets to Fund | $1,144,100 | |
| TOTAL FUNDING REQUIRED | $1,546,200 | |
| Assets | ||
| Non-cash Assets from Start-up | $1,521,100 | |
| Cash Requirements from Start-up | $369,000 | |
| Additional Cash Raised | $53,000 | |
| Cash Balance on Starting Date | $36,000 | |
| TOTAL ASSETS | $1,979,100 | |
| Liabilities and Capital | ||
| Liabilities | $30,000 | |
| Current Borrowing | $0 | |
| Long-term Liabilities | $0 | |
| Accounts Payable (Outstanding Bills) | $49,000 | |
| Other Current Liabilities (interest-free) | $0 | |
| TOTAL LIABILITIES | $79,000 | |
| Capital | ||
| Planned Investment | $1,546,200 | |
| Investor 1 | $0 | |
| Investor 2 | $0 | |
| Other | $0 | |
| Additional Investment Requirement | $0 | |
| TOTAL PLANNED INVESTMENT | $1,546,200 | |
| Loss at Start-up (Start-up Expenses) | $353,900 | |
| TOTAL CAPITAL | $1,900,100 | |
| TOTAL CAPITAL AND LIABILITIES | $1,979,100 | |
| Total Funding | $1,546,200 | |
Services
If you plan for owning an RV park business you must realize that you need to provide your customers with many things other than just a parking space.
Crowe decided to provide sanitation and washroom facilities to RV travelers. Moreover, for people who would want to relax for a while, Grandeur Traveling will also be offering recreational activities, food delivery business, and drinks.
In this business plan template RV park, we are enlisting the services of Grandeur Traveling in detail.
- Sanitation Services
We will provide sanitation services to our customers. To keep our washrooms tidy all the time, we will be hiring sweepers and cleaners. Moreover, we will also make arrangements to empty and clean RV holding tanks that are placed in many RVs to keep wastewater.
- Laundry Facility
To facilitate RV travelers in washing and drying their clothes we will install automatic washing machines and vented dryers.
- Provision of Food/ Snacks/ Drinks
We will also be offering fresh and healthy food items, snacks, and drinks. Our food items will mainly comprise of local cuisines. And our drinks will mainly contain juices, teas, and coffees.
- Recreational Activities
At our RV park, our customers will get the following facilities to enjoy themselves and relax
- A swimming pool
- Play area for adults to play table tennis, badminton, and basketball
- Play area for kids that contain trampolines, swings, slides, and climbing structures
Marketing Analysis of RV Park Business
RV parks have very specific customers. Therefore, before starting an RV park, you must research the market in detail. Generally, RV parks should be situated near the most-visited tourist sites. As RV travelers would like to visit historic and natural sites, it would be profitable if you establish your RV park near popular landmarks.
Besides finding an ideal location, you also have to understand market dynamics for opening an RV park. If you think you don’t possess the right knowledge to do marketing analysis, you should hire a professional marketing analyst for RV park business consulting. In this blog on how to write a business plan for an RV park, we are enlisting the marketing analysis done by Grandeur Traveling.
Business Plan for Investors
5.1 Market Trends
According to IBISWorld more than 16k RV parks and campgrounds businesses are running in the United States. The number is expected to increase by 2025, as IBISWorld reported an annual growth rate of 6.4% in this business from 2015 to 2020. The market size of the RV park business is $9 billion which is also quite good.
Though the market stats are satisfactory, still you need to take careful measures to thrive in the recession due to COVID-19.
5.2 Marketing Segmentation
Identifying your customers and then dividing them into separate groups is essential before starting a business. This practice can help you in devising policies to reach out to specific groups of your customers. Moreover, understanding the requirements of your customers will also assist you in deciding the right services.
To give you a general idea of who can be the customers of an RV park, we are providing here the marketing segmentation done by Grandeur Traveling.
5.2.1 International RV Travelers
Our primary customers will comprise RV travelers from around the world. This group of our target customers will enter New York to visit city parks, art museums, Art Deco skyscrapers, shopping areas, city theaters, iconic restaurants, etc. Therefore, to target them we will set up our RV park stations near the most-visited tourist spots.
5.2.2 Domestic RV Travelers
The second group of our target customers will include RV travelers from our own country who may belong to our nearby cities. To attract this group of our target customers we’ll offer several discounts and free tickets to famous monuments.
5.2.3 Residents
Our third category comprises residents of New York. They are expected to enjoy our food and recreational activities whenever they visit destinations near us.
Though this group of our target customers is not likely to help us make huge revenues. Still, we decided to include it while making our rv park business plan to achieve maximum accuracy.
| Market Analysis | |||||||
| Potential Customers | Growth | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | CAGR |
| International RV Travelers | 48% | 51,000 | 53,000 | 55,000 | 57,000 | 59,000 | 10.00% |
| Domestic RV Travelers | 42% | 45,000 | 46,000 | 48,000 | 50,000 | 51,000 | 10.00% |
| Residents | 10% | 6,000 | 6,500 | 7,000 | 8,000 | 9,000 | 11.00% |
| Total | 100% | 102,000 | 105,500 | 110,000 | 115,000 | 119,000 | 10% |
5.3 Business Target
Crowe defined his business targets in the initial phases of his business. The financial, customer care, and business growth targets set by him are given here.
- To earn a net profit margin of $30k per month by the end of the third year
- To maintain an average rating above 4.8 by the end of the first year
- To open two more RV parks to cover more locations by the end of the first five years
- To maintain a CSAT score above 87% throughout our service years
5.4 Product Pricing
Our prices are almost in the same range as that of our competitors. But to get ahead of them we’ll try to capture more and more customers through offering various discounts, vouchers, and free tickets.
Marketing Strategy
The customers of RV parks are very specific. Therefore, to attract a significant number of customers to your site, you should have an excellent RV park business marketing plan.
Crowe explored the strategies and services of his competitors before completing his RV park business design. This approach enabled him to include exclusive features in his RV parks.
6.1 Competitive Analysis
Grandeur Traveling will come up with the following competitive aspects to outperform their customers.
- We are providing an online booking facility so that RV travelers can reserve a parking space for their RVs by a 3-hour pre-booking.
- Our workers are highly customer-oriented. We will ensure the highest quality sanitation and other services to facilitate our customers.
- We are providing an eating facility in our RV parks unlike many of our competitors.
6.2 Sales Strategy
To attract our target customers, we will:
- Establish a strong web presence by hiring an SEO content writer and a web developer
- We will advertise our services through Google Local ads service
- We will provide a free ticket to visit the Statue of Liberty on every purchase above $70 for the first two months of our launch
- We will provide a 30% discount on all our services for the first two months of the launch
6.3 Sales Monthly
6.4 Sales Yearly
6.5 Sales Forecast
| Sales Forecast | |||
| Unit Sales | Year 1 | Year 2 | Year 3 |
| Sanitation Services | 42,000 | 44,520 | 47,191 |
| Laundry Facility | 36,000 | 38,160 | 40,450 |
| Provision of Food/ Snacks/ Drinks | 26,000 | 27,560 | 29,214 |
| Recreational Activities | 31,000 | 32,860 | 34,832 |
| TOTAL UNIT SALES | 135,000 | 143,100 | 151,686 |
| Unit Prices | Year 1 | Year 2 | Year 3 |
| Sanitation Services | $39.00 | $45.24 | $52.48 |
| Laundry Facility | $42.00 | $48.72 | $56.52 |
| Provision of Food/ Snacks/ Drinks | $45.00 | $52.20 | $60.55 |
| Recreational Activities | $38.00 | $44.08 | $51.13 |
| Sales | |||
| Sanitation Services | $1,638,000.00 | $2,014,084.80 | $2,476,518.67 |
| Laundry Facility | $1,512,000.00 | $1,859,155.20 | $2,286,017.23 |
| Provision of Food/ Snacks/ Drinks | $1,170,000.00 | $1,438,632.00 | $1,768,941.91 |
| Recreational Activities | $1,178,000.00 | $1,448,468.80 | $1,781,037.24 |
| TOTAL SALES | $5,498,000.00 | $6,760,340.80 | $8,312,515.05 |
| Direct Unit Costs | Year 1 | Year 2 | Year 3 |
| Sanitation Services | $35.00 | $42.00 | $47.00 |
| Laundry Facility | $38.00 | $43.00 | $51.00 |
| Provision of Food/ Snacks/ Drinks | $42.00 | $47.00 | $54.00 |
| Recreational Activities | $35.00 | $39.00 | $46.00 |
| Direct Cost of Sales | |||
| Sanitation Services | $1,470,000.00 | $1,869,840.00 | $2,217,986.40 |
| Laundry Facility | $1,368,000.00 | $1,640,880.00 | $2,062,929.60 |
| Provision of Food/ Snacks/ Drinks | $1,092,000.00 | $1,295,320.00 | $1,577,534.40 |
| Recreational Activities | $1,085,000.00 | $1,281,540.00 | $1,602,253.60 |
| Subtotal Direct Cost of Sales | $5,015,000.00 | $6,087,580.00 | $7,460,704.00 |
Personnel plan
As you write a business plan for an RV park, you should decide how many employees you will need to run your business. The best approach to hiring the workforce for your startup is to first make a personnel plan. A personnel plan contains a list of required staff along with their job responsibilities and average salaries.
7.1 Company Staff
Crowe will supervise the business himself. However, he will hire the following staff for Grandeur Traveling.
- 3 Branch Managers to manage RV parks at three locations
- 12 Sweepers/ Cleaners to clean the facility, washrooms, and RV holding tanks
- 3 Cooks to prepare meals
- 3 Store Operators to serve foods and drinks
- 3 General Assistants to maintain areas for recreational activities
- 3 Accountants to maintain financial records
- 1 Web Developer to manage the company’s website social sites
- 1 Driver to provide transportation
7.2 Average Salary of Employees
| Personnel Plan | |||
| Year 1 | Year 2 | Year 3 | |
| Branch Managers | $27,000 | $29,700 | $32,670 |
| Sweepers/ Cleaners | $50,000 | $55,000 | $60,500 |
| Cooks | $24,000 | $26,400 | $29,040 |
| Store Operators | $18,000 | $19,800 | $21,780 |
| General Assistants | $18,000 | $19,800 | $21,780 |
| Accountants | $21,000 | $23,100 | $25,410 |
| Web Developer | $7,000 | $7,700 | $8,470 |
| Driver | $7,000 | $7,700 | $8,470 |
| Total Salaries | $172,000 | $189,200 | $208,120 |
Financial Plan
The last thing to worry about while you create an RV park business plan is the financial plan. As Crowe decided to open RV parks at three different locations from the very beginning, he had to work a lot to manage finances.
After analyzing the total assets, startup expenses, expenses to run the business, pricing strategy, and expected sales, Crowe developed an accurate financial plan.
Note
In this rv park business plan, we are enlisting important financial projections, break-even analysis, gross margins, cash flows, and balance sheet created for Grandeur Traveling.
8.1 Important Assumptions
| General Assumptions | |||
| Year 1 | Year 2 | Year 3 | |
| Plan Month | 1 | 2 | 3 |
| Current Interest Rate | 8.16% | 8.20% | 8.25% |
| Long-term Interest Rate | 8.31% | 8.37% | 8.42% |
| Tax Rate | 23.91% | 24.50% | 25.30% |
| Other | 0 | 0 | 0 |
8.2 Brake-even Analysis
| Brake-Even Analysis | ||
| Monthly Units Break-even | 5361 | |
| Monthly Revenue Break-even | $132,700 | |
| Assumptions: | ||
| Average Per-Unit Revenue | $234.00 | |
| Average Per-Unit Variable Cost | $0.68 | |
| Estimated Monthly Fixed Cost | $162,300 | |
8.3 Projected Profit and Loss
| Pro Forma Profit And Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | $5,498,000 | $6,760,341 | $8,312,515 |
| Direct Cost of Sales | $5,015,000 | $6,087,580 | $7,460,704 |
| Other | $0 | $0 | $0 |
| TOTAL COST OF SALES | $5,015,000 | $6,087,580 | $7,460,704 |
| Gross Margin | $483,000 | $672,761 | $851,811 |
| Gross Margin % | 8.79% | 9.95% | 10.25% |
| Expenses | |||
| Payroll | $172,000 | $189,200 | $208,120 |
| Sales and Marketing and Other Expenses | $128,000 | $134,000 | $140,000 |
| Depreciation | $2,300 | $2,340 | $2,480 |
| Leased Equipment | $0 | $0 | $0 |
| Utilities | $3,100 | $3,170 | $3,200 |
| Insurance | $1,915 | $1,983 | $2,080 |
| Rent | $3,480 | $3,560 | $3,610 |
| Payroll Taxes | $39,000 | $41,000 | $42,000 |
| Other | $0 | $0 | $0 |
| Total Operating Expenses | $349,795 | $375,253 | $401,490 |
| Profit Before Interest and Taxes | $133,205 | $297,508 | $450,321 |
| EBITDA | $133,205 | $297,508 | $450,321 |
| Interest Expense | $0 | $0 | $0 |
| Taxes Incurred | $26,641 | $59,502 | $90,064 |
| Net Profit | $106,564 | $238,006 | $360,257 |
| Net Profit/Sales | 1.94% | 3.52% | 4.33% |
8.3.1 Profit Monthly
8.3.2 Profit Yearly
8.3.3 Gross Margin Monthly
8.3.4 Gross Margin Yearly
8.4 Projected Cash Flow
| Pro Forma Cash Flow | |||
| Cash Received | Year 1 | Year 2 | Year 3 |
| Cash from Operations | |||
| Cash Sales | $58,000 | $62,640 | $67,651 |
| Cash from Receivables | $18,000 | $19,440 | $20,995 |
| SUBTOTAL CASH FROM OPERATIONS | $76,000 | $82,840 | $89,467 |
| Additional Cash Received | |||
| Sales Tax, VAT, HST/GST Received | $0 | $0 | $0 |
| New Current Borrowing | $0 | $0 | $0 |
| New Other Liabilities (interest-free) | $0 | $0 | $0 |
| New Long-term Liabilities | $0 | $0 | $0 |
| Sales of Other Current Assets | $0 | $0 | $0 |
| Sales of Long-term Assets | $0 | $0 | $0 |
| New Investment Received | $0 | $0 | $0 |
| SUBTOTAL CASH RECEIVED | $78,000 | $83,000 | $91,000 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $36,000 | $38,000 | $41,000 |
| Bill Payments | $19,000 | $20,000 | $22,000 |
| SUBTOTAL SPENT ON OPERATIONS | $53,000 | $58,000 | $63,000 |
| Additional Cash Spent | |||
| Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 |
| Principal Repayment of Current Borrowing | $0 | $0 | $0 |
| Other Liabilities Principal Repayment | $0 | $0 | $0 |
| Long-term Liabilities Principal Repayment | $0 | $0 | $0 |
| Purchase Other Current Assets | $0 | $0 | $0 |
| Purchase Long-term Assets | $0 | $0 | $0 |
| Dividends | $0 | $0 | $0 |
| SUBTOTAL CASH SPENT | $58,000 | $62,640 | $67,651 |
| Net Cash Flow | $15,000 | $16,300 | $17,000 |
| Cash Balance | $25,000 | $26,000 | $28,000 |
8.5 Projected Balance Sheet
| Pro Forma Balance Sheet | |||
| Assets | Year 1 | Year 2 | Year 3 |
| Current Assets | |||
| Cash | $276,000 | $309,120 | $340,032 |
| Accounts Receivable | $24,980 | $27,978 | $31,447 |
| Inventory | $4,300 | $4,816 | $4,900 |
| Other Current Assets | $1,000 | $1,000 | $1,000 |
| TOTAL CURRENT ASSETS | $291,000 | $325,920 | $366,334 |
| Long-term Assets | |||
| Long-term Assets | $10,000 | $10,000 | $10,000 |
| Accumulated Depreciation | $18,100 | $20,272 | $22,806 |
| TOTAL LONG-TERM ASSETS | $23,500 | $26,320 | $29,610 |
| TOTAL ASSETS | $295,600 | $331,072 | $372,456 |
| Liabilities and Capital | Year 4 | Year 5 | Year 6 |
| Current Liabilities | |||
| Accounts Payable | $18,700 | $20,944 | $23,541 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| SUBTOTAL CURRENT LIABILITIES | $15,500 | $17,360 | $19,513 |
| Long-term Liabilities | $0 | $0 | $0 |
| TOTAL LIABILITIES | $15,000 | $16,800 | $18,883 |
| Paid-in Capital | $30,000 | $30,000 | $30,900 |
| Retained Earnings | $56,000 | $61,040 | $67,144 |
| Earnings | $194,800 | $212,332 | $233,565 |
| TOTAL CAPITAL | $278,900 | $304,001 | $334,401 |
| TOTAL LIABILITIES AND CAPITAL | $293,900 | $331,072 | $372,456 |
| Net Worth | $283,000 | $308,470 | $339,317 |
8.6 Business Ratios
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | INDUSTRY PROFILE | |
| Sales Growth | 7.19% | 7.97% | 8.83% | 3.00% |
| Percent of Total Assets | ||||
| Accounts Receivable | 9.18% | 10.17% | 11.27% | 9.80% |
| Inventory | 5.44% | 6.03% | 6.68% | 9.90% |
| Other Current Assets | 2.09% | 2.32% | 2.57% | 2.40% |
| Total Current Assets | 151.00% | 152.00% | 152.00% | 158.00% |
| Long-term Assets | 11.65% | 11.69% | 11.84% | 12.00% |
| TOTAL ASSETS | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 4.77% | 4.81% | 4.85% | 4.34% |
| Long-term Liabilities | 0.00% | 0.00% | 0.00% | 0.00% |
| Total Liabilities | 7.33% | 7.39% | 7.46% | 7.38% |
| NET WORTH | 101.80% | 102.61% | 103.56% | 110.00% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 95.70% | 98.28% | 101.04% | 99.00% |
| Selling, General & Administrative Expenses | 94.07% | 96.61% | 99.31% | 97.80% |
| Advertising Expenses | 1.56% | 1.60% | 1.65% | 1.40% |
| Profit Before Interest and Taxes | 41.03% | 42.14% | 43.32% | 33.90% |
| Main Ratios | ||||
| Current | 35 | 36 | 37 | 32 |
| Quick | 34.7 | 35.6 | 36.49 | 33 |
| Total Debt to Total Assets | 0.20% | 0.18% | 0.17% | 0.40% |
| Pre-tax Return on Net Worth | 75.65% | 76.00% | 76.80% | 75.00% |
| Pre-tax Return on Assets | 94.39% | 99.11% | 104.06% | 111.30% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | 32.67% | 33.68% | 34.73% | N.A. |
| Return on Equity | 55.40% | 57.12% | 58.89% | N.A. |
| Activity Ratios | ||||
| Accounts Receivable Turnover | 7.8 | 7.8 | 7.8 | N.A. |
| Collection Days | 100 | 100 | 100 | N.A. |
| Inventory Turnover | 32.5 | 34.125 | 35 | N.A. |
| Accounts Payable Turnover | 16.5 | 16.9 | 17.4 | N.A. |
| Payment Days | 27 | 27 | 27 | N.A. |
| Total Asset Turnover | 2.5 | 2.6 | 2.6 | N.A. |
| Debt Ratios | ||||
| Debt to Net Worth | -0.03 | -0.03 | -0.04 | N.A. |
| Current Liab. to Liab. | 1 | 1 | 1 | N.A. |
| Liquidity Ratios | ||||
| Net Working Capital | $238,900 | $252,278 | $266,406 | N.A. |
| Interest Coverage | 0 | 0 | 0 | N.A. |
| Additional Ratios | ||||
| Assets to Sales | 0.85 | 0.87 | 0.88 | N.A. |
| Current Debt/Total Assets | 1% | 1% | 0% | N.A. |
| Acid Test | 28.5 | 29.1 | 30.4 | N.A. |
| Sales/Net Worth | 2.2 | 2.2 | 2.3 | N.A. |
| Dividend Payout | 0 | 0 | 0 | N.A. |
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