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 business plan written for the startup, Grandeur Traveling.

Executive Summary

2.1 The Business

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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 business plan. Your 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.

3 Years Profit Forecast - RV Park Business Plan

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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 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:

Startup Cost - RV Park Business Plan

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

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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.

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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.

Marketing Segmentation - RV Park Business Plan

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 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
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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.

  1. 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.
  2. Our workers are highly customer-oriented. We will ensure the highest quality sanitation and other services to facilitate our customers.
  3. 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

Sales Monthly - RV Park Business Plan

6.4 Sales Yearly

Sales Yearly - RV Park Business Plan

6.5 Sales Forecast

Unit Sales - RV Park Business Plan

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

Any questions? Get in Touch!

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 business plan, we are enlisting important financial projections, break-even analysis, gross margins, cash flows, and balance sheet created for Grandeur Traveling.

If you need help for making a financial plan for your own RV park, you can read the financial plan for Grandeur Traveling free of cost.

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 - RV Park Business Plan

 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

Profit Monthly - RV Park Business Plan

8.3.2 Profit Yearly

Profit Yearly - RV Park Business Plan

8.3.3 Gross Margin Monthly

Gross Margin Monthly - RV Park Business Plan

8.3.4 Gross Margin Yearly

Gross Margin Yearly - RV Park Business Plan

8.4 Projected Cash Flow

Projected Cash Flow - RV Park Business Plan

 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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