“Chainsaw” Al Dunlap was a well-known corporate raider and business efficiency stalwart of the 1960s through 1990s. His approach to turning businesses around was a simple motto: “sell, sell, sell and cut, cut, cut”. And it’s not a bad mantra for RV park owners, as well. When you buy an old RV park and bring it back to life financially, there are typically three key areas to focus on for maximum impact to the bottom line.
Improve marketing
Not just any marketing, but two key components:
- On-line advertising and marketing. One huge failing of many older mom and pop owners is the simple fact that they have not embraced the power of internet marketing. Every RV park should have immediate visibility on a Google search “RV park in ______” as well as a professional-quality website and terrific social media reviews. However, some RV parks have none of these essentials. That means that the new buyer can do a huge improvement in revenue simply by bringing the property up to current standards.
- Signage out front. It seems hard to believe but some mom and pop owners lose their street signage over time through neglect – or simply never bothered to begin with. Since a typical highway count is around 10,000 to 50,000 viewers per day, it makes absolutely no sense not to take full advantage of that marketing opportunity. Simply ramp up the visibility of your RV park to the busy corridor and you should be able to increase your revenue enormously.
Both of these methods to increase your customer count are simple and inexpensive.
Increase rents and occupancy
There are several methods to drive revenue to a higher level:
- Increase rents. Yes, it’s that simple. Many RV park owners have not checked on market rents sometimes for decades. You need to “comp” the rents of all competitive parks and adjust accordingly.
- Bring in extended stay customers. There is a large and growing category of customers who are interested in living in their RVs full time, or who want to live in a “tiny home” that can only be placed in an RV park by law. These customers allow the RV park owner to create an extremely and dependable source of income.
- Park models and Glamping. These are methods to increase revenue in more of a “hotel” format, where the customer brings no RV of their own and instead stays in a building or an RV that charges by the night.
- Better customer service creates longer stays. Sometimes all you need to do to improve revenue is the very simple act of providing good, positive customer service. Many older moms and pops have long lost their enthusiasm for running the RV park, and instead of an enthusiastic solution to every problem and an endless stream of positive suggestions for local activities they show a lack of interest in making the customer satisfied. This translates to a shorter stay as it’s simply a “downer” and nobody wants to stay longer in a negative environment.
With these four strategies you should be able to increase park revenue significantly and quickly.
Cut operating costs
Again, this is an area where opportunity persists due to a general lack of professional business practices by the mom and pop owners:
- Proper staffing. It is far too common to find that the RV park owner has hired every available family member – and none of them actually do any work at all. As a result, the payroll is horribly bloated and completely unproductive.
- Fix insurance. Many mom and pop owners have insured their RV park using State Farm or other groups that are not really in that business line. Sometimes you can cut costs by simply changing over to a specialty insurer, or costs don’t go down but coverage goes up massively.
- Line-by-line review. RV parks are not complicated to budget for and you need to use this simplicity to get more analytical and creative. A simple line-by-line review of each cost item may yield huge dividends.
Benjamin Franklin once said “a penny saved is a penny earned” and a tight review of costs is just as valuable to the bottom line as boosting revenue.
Conclusion
It is possible to massively enhance the economic performance of many RV parks, particularly with a focus on the these areas of potential. The transition from the older mom and pop owner to someone with more enthusiasm and vitality creates an environment in which you can grow net income rapidly.