Business
plan, Oasis RV Park and Campground
Executive summary and introduction
All
successful businesses start with a vision. The vision identifies a need and a
way for that need to be met. When there is a need then there is opportunity and
in that opportunity the possibility of creating a successful enterprise. In this
area of West Texas there is a great need brought on by the oil boom and it is
our intention to take advantage of that opportunity. It would be wise not to
create an enterprise that is wholly dependent on such a thing as an oil boom as
history has shown these will come and go. However there are several factors
that help eliminate this as a risk. First of all, the RV industry has and does
thrive in many areas where there has never been an oil boom. The fact that we
will be purchasing a store building that sits on the interstate at an exit
provides a source of income that will stand on its own. The location of the
land where the bulk of RV and campground spaces will be installed is within
sight of that building and thus can take advantage of the high interstate
traffic that flows by each day. So even if there was no oil boom this would be
a successful venture. However, with the oil boom we have an opportunity that is
magnified greatly. It is our intention to take advantage of this opportune time
and create a business that will prove to be highly profitable. In order to
finance this we are creating a corporation, allowing us to sell shares of stock
in this startup business. The value of this stock should appreciate
considerably once all construction is completed and the corporation is
generating a positive cash flow, thus providing investors with an admirable
return on investment.
Mission statement
We will
create a thriving enterprise that consists of a store, restaurant, and sign in
center located on Interstate 20 at exit 151 and an RV park/campground with 50 RV
sites and at least 10 camp cabins along with some primitive camping spots. We
estimate that this should generate a gross income of $250,000 a year with the
potential to do much more.
Values
We will be a
positive influence on our community and work to enhance the reputation and image
of this area. Because we are believers in Jesus Christ we understand that
whatever we do reflects on that so will be careful that all we do honors this.
Long term vision
It is the
goal of Westbrook Management to over time create an agritourism enterprise that
will comprise of a greenhouse operation that produces year round, livestock
that provides meat, eggs, and dairy products for sale, fruit orchard, and a
food processing and canning facility that will provide products for sale under
the Westbrook Farms brand. The RV Park, store, and campground will provide a
direct to the customer access point that enhances this. It should be noted that
our primary goal is to focus on the RV Park and worry about the rest after the
Park is established and secure.
The Market
Right now
there are forty dollar hotel rooms in this area that are being booked for $120 a
night and many hotels are booked for months ahead so getting a room for the
night can be a challenge. A golf course in the region installed twenty RV spots
and they were snatched up in a day and the owner had one hundred fifty calls
for more. The front page news article about that is included in this business
plan. I just got off the phone with a man who we watched build an RV park on
property that borders the interstate. He put in 16 RV sites at a cost of one
hundred thousand dollars and in a year will have recouped his entire
investment. He has no interest in tapping the lucrative short term overnight
market that is available from interstate traffic.
Around the
nation RV parks fall into two general categories. There are “Destination” parks
such as you will find at national parks and tourist attractions and there are
the overnight stay RV parks commonly found along interstates and areas of high
traffic. The concept of RV parks to provide housing for workers is an unusual
one that is a product of today’s current economic situation. There are
corporations in this area that are building what are called “man camps” to
house their employees at great expense. We will be seeking such a facility for
a portion of the 75 acres of land I own but that is not a part of this business
plan.
So we have
the unusual opportunity to serve all three of these markets. There is the
estimated 26,000 vehicles a day that drive through on the interstate with a
sizeable number of RV’s included that would provide the overnight short term
business. We have the pressing need for oil field worker housing that would
provide long term monthly renters. And eventually, once Westbrook Farms is up
and running we will become a destination for families wanting to enjoy the food
and attractions we plan on creating.
Competition
With the oil
boom has come a glut of those wishing to cash in on this opportunity. I have
spent a lot of time visiting and studying many of the RV parks that seemed to
pop up overnight. With few exceptions they are poorly set up and generally a
mess. The few exceptions are usually the RV parks that have been in existence for
an extended period of time. One of them is old and poorly maintained but
despite that is full. The parks that were hastily thrown up display all the
problems that come with poorly thought through endeavors. The RV’s are packed
in like sardines in a can with little room between them. Water and septic
systems can also be shaky and I’ve seen RV’s hooked up with extension cords for
electricity and garden hoses for water. We don’t get much rain here but when we
did some of these poorly created parks became mud holes with the clients unable
to drive their private vehicles off the premises. But some of them are better planned
and made. The price range for the RV parks in this area go from $350 to $650 a
month. Some of those include the price of electricity and some do not. The
lowest priced park, at $350, has a separate electric meter at each site so that
the clients pay their electric bill in addition to the site rental.
It is
evident that through building a higher quality facility that offers some
amenities such as showers, internet, perhaps satellite television, and a
clubhouse/store/restaurant building we will have no problem attracting a number
of clients, who would be willing to pay a higher price. We will address this more
further in this business plan.
Location and demographics
Westbrook Farms
is located on Farm Road 829 approximately one mile north of interstate 20. This
is about five miles west of the town of Stanton and seventeen miles east of
Midland, in Martin County. Stanton is Martin County’s seat. The county has a
population close to 5,000. Midland County has a population of 140,000 with
approximately 100,000 of them residing in the city of Midland. The store
building and property are located on the service road that runs along the north
side of Interstate 20 approximately 300 feet from the west bound intestate exit
number 151. Department of Transportation statistics state that on the average
26,000 vehicles travel through this area each day. It is this traffic that is a
key ingredient for our business opportunity. The interstate provides more than just
traffic that we can supply a service to but also means that this location
provides valuable access to the transportation artery of the area, making it of
prime importance to corporations whose employees need to work in the area. This
of course enhances our location’s desirability for those businesses.
Management
Robert
Westbrook (the creator of this business plan) has extensive experience in
founding and building businesses. His first two business ventures failed but
understand why this is a good thing. We learn valuable lessons from experience and
those lessons provide an insight that helps us make wiser decisions later. The
first company was an advertising venture and the second was an attempt to
market a toy I had developed. This was in 1986 and basically I didn’t have the
finances or experience needed to make it work. I have been in sales and
marketing most of my life and in 1989 I founded Westbrook Marketing. It started
with me providing lead generation and appointment setting via telemarketing for
a major insurance company. My success at finding businesses willing to meet
with their sales staff created a demand for services that I was unable to meet
by myself so I hired and trained others to help. Soon I rented a building,
installed a phone system, and thus Westbrook Marketing was born. It grew to a 25
station telemarketing company that provided business to business services for a
wide variety of companies.
As my
reputation grew I found myself being asked to advise companies regarding
marketing and sales. As a consultant I would charge $120.00 an hour. I helped
some start up their own companies and I helped existing companies develop their
sales and advertising material as well as training their sales staff on how to
present their product and ask for the order. I advised companies on how to
advertise, create a positive company image, develop a brand, and assisted some
in setting up their own in house telemarketing operation.
When a bank
called for assistance liquidating the assets of a foreclosed business I was
glad to help. Next thing I know I’m getting calls from many businesses that
needed to liquidate assets and thus my second company, Corporate Liquidation,
was formed. Eventually we rented 80,000 square feet of warehouse space to house
the products purchased at auction and consigned to us. It became our retail
outlet as well as where we would hold regular auctions to move the merchandise.
Office
furniture was a big part of the inventory and I was refurbishing much of it for
resale. To facilitate that I opened a third company, Absolute Office Furniture
in a downtown showroom.
As you can
see I have plenty of experience creating and running businesses. It is
important to point out the negatives in any venture. I had a stroke and then a
car accident that put me in a coma for 6 weeks. As a result there was extensive
brain damage and this is the reason I no longer have the companies I built. The
accident was in 2001 and as you can tell by reading this I have come a long way
in restoring what was lost. There is a remaining issue of short term memory
loss but that is compensated for by keeping good notes and through the assistance
of my wife and others.
Company Structure
We will be
incorporated as that provides legal
protections for all investors. Exactly what kind of corporation we will
form will depend on several factors, the most important being what will satisfy
or be most beneficial for our shareholders.
A class C or
general corporation will allow us to
have an unlimited number of shareholders as we can sell stocks to as many as
want to get involved. Thus an individual can be a part of this by purchasing
one share of stock, which may only cost one hundred dollars. The disadvantage
of a class C corporation is the
corporation is taxed on the profits and then the shareholders are taxed when
they receive their portion of the profits, so the profits are taxed twice. A
class C corporation provides less flexibility when it comes to tax deductions
for the investor.
Another option is a close corporation. There are a few minor, but significant, differences
between general corporations and close corporations. In most states where they
are recognized, close corporations are limited to 30 to 50 stockholders. In
addition, many close corporation statutes require that the directors of a close
corporation must first offer the shares to existing stockholders before selling
to new shareholders.
This type of corporation is particularly well
suited for a group of individuals who will own the corporation with some
members actively involved in the management and other members only involved on
a limited or indirect level.
S corporation – S type corporations provide what
can be significant tax advantages over general corporations but still provide
all the legal protections. There is no double taxing as there is with general
corporations. There is a maximum of 75 shareholders with an S corporation but
those shareholders could include trusts, retirement accounts, and even certain
charitable institutions. The profits and losses can be claimed on individual
shareholder’s income tax so during the startup of this corporation, when there
are more expenses than profits, these losses can be deducted, thus reducing tax
liability.
Limited liability company – Commonly referred to as an “LLC”
provides personal protection of a shareholders assets from business debts as
the other entities do. Profits/losses pass through to personal income
tax returns of the owners. This provides great flexibility in management and
organization of the business.
I am conferring with attorneys regarding this and it’s
important to note that whatever legal form we choose will be based on the needs
of our shareholders. There is flexibility and the ability to adjust what we do
as things progress.
Board of directors
This is a
group effort and it will be important to make sure everyone has a voice as we
proceed. I can’t do this alone and desire that whatever we accomplish be a
blessing to all involved. I certainly recognize that with a wide variety of
shareholders, who all have experience in different areas of life, provides a
rich source of input on how to do this.
Accounting
Anytime we deal with other people’s money it
is important to have independent accounting of what is done with that money.
This will provide protection and peace of mind for all involved. I desire that
the books be open and available for all shareholders to see so there is no
question regarding ethics and responsibility.
The Plan
The
companies I built before were all created without the need for outside investors.
I built them from scratch, starting small and using the income generated to
fund the next phase. While this methodology is not practical for what we are
proposing here the lessons learned can still be applied. Thus there will be a logical
pathway I propose to follow but it will be dictated by the success of the first
phase, raising capital. If we find one or several large investors then
everything will be tackled at once but if not then this is the order things
will proceed.
Raising capital
It takes money to make money. Step number one
you are currently involved in because you are reading this. This is an exciting
opportunity and all the evidence is clear that it is one of the safest bets around.
The ability to generate positive cash flow quickly has been demonstrated by the
many RV parks that have sprung up and are already full. While I can’t make
promises I can express my confidence that the initial investment will be
recouped quickly, perhaps within two years. Even if it’s five years that is far
better than many investments that take decades to fully mature.
Step 2 - Purchasing building and property on interstate
is an immediate need. The property is only available at the negotiated price of
$45,000 till the end of February. It is the lynchpin of Oasis RV Park due to
the high visibility location on the interstate. In addition to that it is the
spot that we will use to generate almost immediate cash flow. There is a septic
system already installed, though it should be moved due to the proximity to the
water well. It is a plastic septic tank
so would be easy to relocate. There is a power pole with electricity set up and
the afore mentioned water well. Thus we can almost immediately rent out space
to approximately 15 RV’s. This initial rental would be at the low rate of
$350.00 a month so if only ten RV’s are there it would generate $3,500.00 a
month.
Everything
else can grow from there. So as I seek shareholders, partners in this, I am asking
that this area be addressed quickly. If I need to I will put up my land as
collateral, for I believe with everything I have (literally) that this is a
great opportunity.
There are
improvements to be made to the building beyond cosmetic patches on drywall and
painting. Eventually full size windows will be installed where there is now
plywood covering where windows had once been. But first things first. We want
to install coolers for soft drinks and retail items that require refrigeration.
A sales counter and register, along with shelving are needed to make this a
convenience store.
Eventually
we plan to install a grill and restaurant equipment and expand the operation to
being a fast food style restaurant.
Design and build RV park on property
at FM 829
We have a
definite advantage over many of the RV parks that have sprung up, we have room.
Most of the parks I have investigated have stuffed as many RV spots onto their
land as they could squeeze. There is no shade, no trees, and no landscaping for
the majority of them. They have used poor quality caliche to make the roads and
pads and there is little room for the residents to park their vehicles.
Our vision
is much more permanent and long term. It will cost more but in the long run
generate much higher return on investment. The final product will feature
concrete RV pads with parking room and a small yard that includes a picnic
table and tree. We will put a small fence between lots and thus enhance a sense
of privacy as well as a “This is my space” feeling that studies have shown to
be important. A good analogy on this would be the difference between some
fleabag cheap hotel and a top end high quality motel. The nicer the place the
more willing a customer is to pay a higher price. We would prefer to cater to
higher end clients.
Maintaining
an awareness that we desire to generate cash flow as quickly as possible the
Oasis RV park will be built in progressive stages. First stage will be to dig
trenches for electricity cables, water pipes, and septic systems. Once those
are installed then we can mark out roads and pads for an initial 20 spots. At
first we will bring in high quality caliche for these roads and pads in order
to make spots available for rent as soon as possible.
One of the
high costs of doing this right is to drill and install a water well that
complies with state regulations. Many of the RV parks that sprung up overnight
failed to do this and the EPA is currently investigating RV parks and demanding
they be in compliance. I’ve heard everywhere from $40,000 to $100,000 as a
price of a properly engineered and installed commercial water well. It is to be
noted that any property that has less than twelve RV’s or twenty five people is
exempt from this regulation so the property on the interstate can avoid this.
I plan on
expanding the RV park at the rate of twenty spots at a time. As we progress I
propose to build the subsequent spaces with concrete pads for the RVs. Trees,
fences, and other things like landscaping can be put in later as we work
towards our long term vision for the park.
There will
be a building that will contain a store that caters to RV owners and park
patrons, a clubhouse and game room that provides a place to go and some
entertainment, along with a laundry room and showers. We will provide Wi-Fi internet
access and perhaps satellite television hook ups. All of these provide
additional sources of revenue along with enhancing the overall desirability of
the Oasis RV Park. Whether there will be one building or a few will be
determined by research on cost and what the shareholders approve. There is no
reason why this could not be expanded over time to include a hundred or more lots.
One hundred lots would generate $50,000 a month in rental revenue and $600,000
a year. On a national level most new parks have 150 or more spaces, according
to information from the National Association of RV parks and Campgrounds. We can carefully grow to that level over the
years, or choose not to based on experience. You can imagine what the stock
would be worth in such a case.
How we will do it
The National
Association of RV Parks and Campgrounds states that the cost of building an RV
park comes to about $15,000 to $20,000 per each RV spot. That included roads,
infrastructure, and other costs. If we hire outside contractors and heavy
equipment operators this is what we can expect. However, I can run a backhoe
myself and much of that cost can be greatly reduced through careful shopping
and locating individuals who possess the expertise needed. We can purchase a
backhoe at auction for fifteen to twenty five thousand dollars, less than what
it would cost to hire one. As we grow there will always be a need for a backhoe
so it would become part of the corporate assets that will always help save
money.
The water
lines, septic systems, and electrical lines I can install myself, though I
would have a qualified electrician certify the work and do the final hook ups.
I already have some who wish to move to this area and help me with labor.
Having broken my back and neck that would be a good idea.
The concrete
pads we can measure, excavate, install rebar and siding, and then have them
poured and finished.
Advertising
All businesses
need to get the word out, to let potential customers know where they are and
what they offer. Oasis RV Park and Campground has two types of customers to
reach out to. There are the overnight and short term travelers on the
interstate and then long term monthly renters, whom are mostly oil field and
related industry workers. Most RV parks cater to the traveling RV clientele.
This is made up of many close knit groups with common interests who are a
community that communicates well within their circles. Word of mouth can make
or break an RV park that caters to the travel industry. Fliers and direct
mailing to specific mailing lists are valuable ways of getting the word out but
the most effective tool we will have will be a well-placed and properly designed
billboard on the interstate on both the east and west bound lanes. A large sign
on the store at the interstate exit is a must, one placed as high as we can get
it. As time goes by our reputation will spread, and that naturally is
contingent on us doing a good job and always making sure our customers are
happy.
Reaching the
oil field and related long term renters is quite a different matter. From what
I understand the oil industry is also a close knit group where word of mouth is
powerful. We will need to find effective ways of informing the many associated
businesses that the RV park is available, and perhaps work out an incentive for
them to send employees our way. There is a good possibility that doing such a
thing will not be necessary.
Personnel
I will be
the first employee of the corporation. As manager I will be earn a salary that
will be determined by the board of directors. This will allow me to focus on
all the many things that need to be done and not be distracted by other areas
of life. I will forego working on my farm in order to insure things are done correctly
with Oasis RV Parks and Campground.
We will hire
at least one common laborer and a person who could help with book keeping and
perhaps the store as soon as it can be up and running. As we grow we will need
to hire more people but the plan is to have the cash flow to cover that as we
go.
Money
I know there
are all kinds of fancy official accounting terms to use here but I’ll keep it
basic and real. We will have a goal of raising $300,000 with the initial stock
offering. Whether we reach that goal or not only time will tell. Bare bones we
can start out with $60,000 and get things going. $45,000 will purchase the
property on the interstate and the remaining $15,000 will be used to get that
property in shape to rent space for 12 RVs. That will provide an almost
immediate cash flow which will be used for future expansions. If that is all we
raise then I will work for no pay in order to make this happen.
In my former
business as a liquidator I bought and sold business equipment at far below
wholesale prices. I will be able to obtain vending equipment, washers, driers,
coolers, restaurant equipment by carefully searching auctions throughout the
country. In areas like Michigan and Ohio these types of equipment can be
purchased for pennies on the dollar due to the poor economy in those areas.
The National
Association of RV Parks and Campgrounds states that as a rule RV parks will
provide 20 to 30 % profit out of the total revenue. That is highly attractive
for any business. A well-run company will do even better than that. Regardless,
we have an excellent opportunity to create a profitable business that can
quickly provide a return on investment plus a steady source of income over the
years to come. Even if the oil boom goes bust this business will continue being
a profitable enterprise based on what RV parks do throughout the nation. The
oil boom is just a powerful plus.
On the practical level we need
$1400.00 to pay a lawyer to incorporate this
business. (Plus or minus depending on type of corporation created.
$200.00 to
purchase Quickbooks or a similar accounting program
$100 or so
to establish a bank account and order checks
??? to find
and set up a relationship with accountant. If you know someone let me know.
And there
will be a variety of other small expenses as we put this together.
Meeting
There will
be lots of questions and answers to satisfy those interested in doing this. I
will be scheduling meetings at various places where these questions can be
addressed. This is an exciting opportunity for us to all make some good stable
honest money and help others at the same time.
Please feel
free to call my anytime.
My cell
phone number is 432-488-7346
email
address is bobcarver2@yahoo.com
