1.0 Executive Summary
The purpose of this business plan is to raise $750,000 for the acquisition of a RV park property while showcasing the expected financials and operations over the next three years. The RV Park, Inc. (“the Company”) is a Texas based corporation that will provide high quality rental spaces to RV owning tenants in its targeted market. The Company was founded by John Doe.
1.1 The Services
As stated above, the Company intends to launch its operations with the acquisition of an existing RV Park. The expected rent roll for this 25 lot RV park is $340,000 per year, which includes rental fees and other ancillary income including the facility’s onsite Laundromat. The RV Park will generate enough positive cash flow to cover both the interest and principal payments for the debt capital sought in this business plan.
The third section of the business plan will further describe the services offered by the RV Park.
Mr. Doe is seeking to raise $750,000 from as a bank loan. The interest rate and loan agreement are to be further discussed during negotiation. This business plan assumes that the business will receive a 10 year loan with a 9% fixed interest rate. The financing will be used for the following:
- Acquisition of the Company’s RV Park.
- Financing for the first six months of operation.
- Development of the RV Park’s onsite office.
Mr. Doe will contribute $100,000 to the venture.
1.3 Mission Statement
It is the goal of the Company to create a business that provides customers with high quality and scenic parking spaces while providing a steady stream of operating and passive investment income for Mr. Doe.
1.4 Management Team
The Company was founded by John Doe. Mr. Doe has more than 10 years of experience in the real estate management industry. Through his expertise, he will be able to bring the operations of the business to profitability within its first year of operations.
1.5 Sales Forecasts
Mr. Doe expects a strong rate of growth at the start of operations. Below are the expected financials over the next three years:
1.6 Expansion Plan
Management intends to expand its property base through reinvestment and several additional financings. This additional capital will be used to acquire and manage several other RV Park properties.
The Company will also continued to engage a broad based marketing campaign within its target market in Texas in order to provide RV storage services to area residents that want to place their recreational vehicles at a third party facility. Many HOAs prohibit RV owners from having their recreational vehicles in their driveways, and as such, Mr. Doe sees a substantial opportunity to provide these services to the general public as well.
2.0 Company and Financing Summary
2.1 Registered Name and Corporate Structure
RV Park, Inc. The Company is registered as a corporation in the State of Texas.
2.2 Required Funds
At this time, the RV Park requires $750,000 of debt funds. Below is a breakdown of how these funds will be used:
2.3 Investor Equity
Mr. Doe is not seeking an investment from a third party at this time.
2.4 Management Equity
John Doe owns 100% of the RV Park, Inc.
2.5 Exit Strategy
In the event that Mr. Doe wishes to sell the RV Park to a third party, he will contract a real estate brokerage firm to market the property to potential buyers. Based on historical sales prices of RV parks, Mr. Doe expects that the property will appreciate to have a value in excess of $850,000 by the third year of operations.
3.0 RV Park Operations
Below is a description of the revenue centers for the RV Park.
3.1 Rental of RV Spaces
The primary source of revenue for the RV Park is the rental of the 25 units located on the property that Mr. Doe intends to acquire. Each of these units produces an approximately monthly income of $600 to $750. The Company will have an onsite manager that will be given a free of charge small home to live in and a $20,000 annual stipend. This onsite manager will oversee the general operations of the property while managing issues for people that want to rent the RV Park’s units. Mr. Doe will be in daily contact with this manager to ensure the proper operation of the property.
3.2 Ancillary Fees and Income
The Company will also generate secondary revenues from late fees on rent and income from the Company’s onsite coin operated laundry center. Aggregately these two income streams will provide RV Park, Inc. with approximately 10% of its revenues.
4.0 Strategic and Market Analysis
4.1 Economic Outlook
This section of the analysis will detail the economic climate, the RV park industry, the customer profile, and the competition that the business will face as it progresses through its business operations.
Currently, the economic climate is uncertain. The pandemic stemming from Covid-19 has created a substantial amount of turmoil within the capital markets. It is expected that an economic recession will occur given that numerous businesses are being forced to remain closed for an indefinite period of time (while concurrently having their respective employees remain at home). However, central banks around the world have taken aggressive steps in order to ensure the free flow of capital into financial institutions. This is expected to greatly blunt the economic issues that will arise from this public health matter.
However, the demand for RV park usage is expected to climb over the next 12 to 24 months. As people have becoming more concerned with social distancing, families may seek to do road-based vacations in order to avoid travel on airplanes. As such, the RV Park will be able to operate profitably and with a positive cash flow at all times.
4.2 Industry Analysis
In the United States, there are 19,000 companies that operate in a real estate investment capacity by sourcing funds from private investors/banks with the intent to engage in real estate related activities. Each year, these companies aggregately generate $22.8 billion dollars per year and provide jobs for more than 20,000 Americans. Payrolls for these employees have exceeded $1.3 billion dollars year during the last five years.
Specifically among RV (and mobile home) parks, aggregate rental and fee income in each of the last five years have exceeded $3 billion dollars.
During the next six months to two years, Management expects that the number of agents in this market will remain stable. Certainly some market agents will close (due to poor investments during the boom cycle), but others will enter the market with fresh cash to acquire undervalued properties and RV parks.
4.3 Customer Profile
Management expects the following demographics of tenants that will continue to rent from the RV Park:
- Household income exceeding $45,000.
- Between the ages of 21 and 65
- Will spend five to ten days at the RV park facility on average.
In this section of the analysis, you should describe the type of customer you are seeking to acquire. These traits include income size, type of business/occupation; how far away from your business is to your customer, and what the customer is looking for. In this section, you can also put demographic information about your target market including population size, income demographics, level of education, etc.
This is one of the sections of the business plan that you must write completely on your own. The key to writing a strong competitive analysis is that you do your research on the local competition. Find out who your competitors are by searching online directories and searching in your local Yellow Pages. If there are a number of competitors in the same industry (meaning that it is not feasible to describe each one) then showcase the number of businesses that compete with you, and why your business will provide customers with service/products that are of better quality or less expensive than your competition.
5.0 Marketing Plan
RV Park, Inc. intends to maintain an extensive marketing campaign that will ensure maximum visibility for the business in its targeted market. Below is an overview of the marketing strategies and objectives of the Company.
5.1 Marketing Objectives
- Established connections with lenders, banks, and investors.
- Develop relationships with vacation rental websites that will showcase the RV Park.
- Maintain an expansive web presence so that reservations can be taken directly over the internet.
5.2 Marketing Strategies
Management intends to place a number of traditional advertisements in RV magazines so that individuals that are traveling near the Company’s facilities will be able to know where to stop, the costs associated with renting an RV rental space, and how to contact the business for more information regarding the Company’s facilities.
The internet has become a very popular platform for property sellers, real estate brokers, and real estate developers to showcase their developed (including RV parks) properties to the general public.
Management intends to use the full marketing capability of electronic advertising to generate sales among the Company’s RV space units. The Company will use major internet vacation databases to showcase the RV park to potential customers that will be traveling within the Company’s target market.
In this section, you should expand on how you intend to implement your marketing. List publications, local newspapers, radio, and other outlets that you will use to promote your business. Discuss how much money you intend to spending on marketing.
In this section, describe the pricing of your services and products. You should provide as much information as possible about your pricing as possible in this section. However, if you have hundreds of items, condense your product list categorically. This section of the business plan should not span more than 1 page.
5.4 Marketing Expenditure Breakdown
6.0 Organizational Plan and Personnel Summary
6.1 Corporate Organization
6.2 Personnel Summary
7.0 Financial Plan
7.1 Underlying Assumptions
The Company has based its proforma financial statements on the following:
- RV Park, Inc. will have an annual revenue growth rate of 5% per year.
- The Owner will acquire $750,000 of debt funds to develop the business.
- The loan will have a 30 year term with a 7% interest rate.
7.2 Sensitivity Analysis
The Company’s revenues are sensitive to changes in the general economy. As discussed in the fourth section of the business plan, the housing and real estate market are currently in distress. However, with real estate prices at undervalued prices, Mr. Doe feels that acquiring a RV park now will allow the business to reap substantial income and capital appreciation over the next five to ten years once the real estate market completes its correction
7.3 Source of Funds
7.4 General Assumptions
7.5 Profit and Loss Statement
7.6 Cash Flow Analysis
7.7 Balance Sheet
7.8 Breakeven Analysis
Appendix A – SWOT Analysis
- Economically insulated business.
- High gross margins from ongoing RV park services.
- Recurring streams of revenue on a monthly basis.
- An owner-operator (John Doe) that has extensive experience in the real estate industry.
- Many regulatory and compliance issues.
- Legal liabilities resulting from accidents onsite.
- Competitors within the same Texas metropolitan area market.
- Expansion of the business to maintain several facilities.
- Attract additional equity capital from private equity firms and angel investors.
- Errors and omissions can cause serious legal liability for RV Park, Inc.
- Many other businesses targeting the same clientele.
- Liabilities resulting from onsite client injury can severely damage the Company.
Please note that the remainder of the business plan can be found on the samples page.