Business plan

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