1.0 Executive Summary
The purpose of this business plan is to showcase the ongoing development of an RV park and campsite based in Maricopa County, Phoenix. Deutsch Hospitality Enterprises LLC (“the Company”) was founded this year with the intention of providing an outstanding hospitality experience for individuals traveling through Central Arizona. Full scale revenue generating operations will commence next year once the capital has been acquired and the campus has been completed.
Operations
The primary revenue center for the business will come from the 50 RV pads that will be on site. The business will typically charge $50 per diem for use of the facilities. To complement these operations, the business will have a large-scale campsite where individuals can bring their own tents. The business will charge $20 per diem for access to this aspect of the campus.
Beyond these primary revenue centers, the Company will generate income from usage of its laundry facilities, vending machines, and ancillary services that will be available on site. All guests will have access to complementary Wi-Fi.
The third section of this document further discussed the operations of this RV park and campground.
The Financing
The Company is currently seeking $1,175,000 a capital for the development of Deutsch Hospitality Enterprises within Maricopa County. The terms of this funding are to be discussed during the negotiation. These funds will primarily be used for the acquisition land, pad grading, and establishment of the RV pads. A $250,000 capital injection will be made by the Founder.
It should be noted that the Company could acquire additional capital on an as needed basis, which could be secured by the land. It is not expecting any further capital will be required moving forward.
The Future
Given the immense demand for RV parks and campsites in Maricopa County, it is expected at the business will reach near maximum capacity relatively quickly. After the fifth year of operation, Management may see to develop additional facilities within Arizona or neighboring Southwestern states.
Market Overview
Revenue Forecasts
2.0 The Financing
2.1 Funds Required
The funds discussed in the executive summary will be allocated as follows:
2.2 Management and Investor Equity
The Founder is the 100% owner of Deutsch Hospitality Enterprises.
2.3 Exit Strategies
Although there are no long-term plans to sell this business, the Company would coordinate these efforts with a real estate brokerage that specializes in RV parks and campsite properties. Historically, these businesses typically have a sales price of three times EBITDA plus the value of the property.
3.0 Operations
As noted in the executive summary, Deutsch Hospitality Enterprises will be actively involved with providing a wide range of hospitality services specific for recreational vehicle owners that are traveling through the greater Maricopa County area. The 50 RV pads will provide access to high amperage connections as well as facilities for disposing of waste. It is expected that the average stay will be two nights.
In order to have an exciting experience available for guests, the campus will feature a number of installations related to entertainment. A small on-site arcade will be available as well as many outdoor focus games. The business will provide free access to the Internet for all guests.
As it relates to campsite operations, the business will have approximately 60 spaces available specific people that are camping. These fees will be significantly lower than use of the RV pads.
To further generate high margin revenue centers, the business will have an on-site laundry facility, vending machines, and access to a small general store.
4.0 Overview of the Organization
4.1 Registered Name
Deutsch Hospitality Enterprises LLC. The Company is registered as a limited liability company in the State of Arizona.
4.2 Commencement of Operations
The business is expected commence operations in the first quarter of next year.
4.3 Mission Statement
Provide an exceptional RV park in campsite experience for people traveling through Maricopa County.
4.4 Vision Statement
To become a widely recognized hospitality enterprise in a national level among people traveling through the Southwestern United States.
4.5 Organizational Objectives
• Properly finalize the development of the RV park in campsite campus once the capital has been secured.
• Leverage multiple forms up online marketing in order to establish a widely recognized brand name for the business.
• Conduct extensive direct outreach with Southwestern United States based RV dealers that will recommend the Company’s facilities.
• Adhere to all regulatory frameworks within the State of Arizona regarding the operation of RV parks and campsites.
• Maintain an expansive online presence so that reservations can be acquired through the businesses e-commerce website.
• To provide an enjoyable place to work for the Company staff.
5.0 Market and Industry Analysis
5.1 External Environmental Analysis
This section of the business plan will showcase the RV park and campsite industry, the current economic climate, the guest profile, and competitive issues.
The United States economy is currently undergoing a period of change. As a result of changing trade policies, there has been a certain degree of volatility introduced to the market over the past three business quarters. Inflation has been the primary issue that the US economy is facing. Appropriate fiscal policy has been put in place to address this matter.
However, issues with the economy should only have a minimal impact on the Company’s ability to generate revenue and remain profitable. The people that own recreational vehicles love traveling long distances, and staying at an RV park or campsite is a relatively low cost form of hospitality. The Company will generate substantial contributions on the revenue centers discussed earlier.
5.2 Industry Analysis
As of this year, RV parks and campsite generate in excess of $10.7 billion per year. There are approximately 3,400 companies that are actively engaged in providing the service the general public.
This is a highly established industry, and the future growth rate will remain similar to that as the economy as a whole. It should be noted that there is an increase interest in RV parks and campsites among people that are part of the Millennial generation and Generation Z.
5.3 Customer Profile
The enjoyment of RV travel and camping is universally loved. As such, it is difficult to determine the average customer of the Company given that this will span the entirety of the socioeconomic spectrum. Generally, these individuals will typically have a household income in excess of $75,000.
5.4 Competitive Analysis
The Company will face moderate competition as it develops its operations in Maricopa County. The Company will maintain a strong differentiating factor given that the business will operate is both an RV park as well as a campsite. Furthermore, the business will have a number of on-site amenities that are uncommon among competing enterprises.
6.0 Key Strategic Issues
6.1 Sustainable Operations
Deutsch Hospitality Enterprises will have sustainable operations as a result of the following:
• Substantial contribution margins on all per diem fees for RV pad and campsite usage.
• Limited competition given the number of amenities on site.
• The Founder has extensive experience operating RV parks and campsite facilities.
• The Company can scale operations to the acquisition of additional parcels of land.
6.2 Basis of Growth
The Company will expand via the following methods:
• Continued growth in regards to the Company’s marketing operations to drive online reservations.
• Potential acquisition of campsites or RV parks that are near the Company’s initial facility.
• Development of relationships with referring RV dealers.
7.0 Marketing Plan
7.1 Marketing Objectives
• Use multiple forms of online advertising in order to drive traffic to the Company’s reservation enabled website.
• Established relationships with referral partners throughout Arizona.
• Continue to market the Company’s RV park in campsite among noted periodicals.
7.2 Revenue Forecasts
7.3 Revenue Assumptions
Year 1
• The business will launch its operations in the first quarter of next year.
• First year revenue will reach $774,000.
Year 2
• The business will begin expanding its online and traditional marketing campaigns.
• Revenue will reach $821,000.
Years 3-5
• By Year 5, revenue will reach $978,000.
• The Company may establish additional facilities at this time.
7.4 Marketing Strategies
The Company will use a number of marketing strategies that will drive significant interest for Deutsch Hospitality Enterprises in the coming years. During the development, the Company will create numerous articles that will be featured on the business’ website as well as publications that are principally geared towards RV enthusiasts. The business will also place ads among online portal that are specific for people seeking campsites within the Maricopa County area.
The Company’s for proprietary website will undergo substantial search engine optimization that can be quickly found when searches for RV parks and campsite facilities are conducted for the Maricopa County area. This will occur during the development process so that the business gains traction prior to the full-scale launch of operations.
Deutsch Hospitality Enterprises will also maintain an extensive presence among all major social media pages. It is expected that many people will take images and videos of their stay at the facilities, which will further increase online visibility among social media platforms. This will also contribute to the Company as search engine organization campaigns.
From time to time, the Company will also take out printed advertisements, not only within Maricopa County, but also among national level recreational vehicle focus publications.
8.0 Organizational Plan
8.1 Organizational Hierarchy
8.2 Personnel Costs
9.0 Financial Plan
9.1 Underlying Assumptions
• The Company will have a compounded annual growth rate of 6%.
• Management will secure a $1,175,000 loan.
• Deutsch Hospitality Enterprises will have an equity capitalization of $250,000.
9.2 Financial Highlights
• On RV park in campsite rentals, the business will achieve contribution margins of 95%.
• Sales of products will achieve contribution margins of 75%.
9.3 Sensitivity Analysis
As has been noted throughout this document, the demand for recreational vehicle travel and related hospitality services typically remains strong in any economic climate. The substantial contribution margin generated from daily fees as well as other hospitality services will ensure that the business is able to remain profitable at all times.
9.4 Source of Funds
9.5 Financial Proformas
A) Profit and Loss Statement
B) Common Size Income Statement
C) Cash Flow Analysis
D) Balance Sheet
E) Expanded Sensitivity Analysis
9.6 Breakeven Analysis
9.7 Business Ratios
9.8 DSCR Analysis
Appendix A – SWOT Analysis
Strengths
• Moderately low overhead cost as a function of the revenue produced on a daily basis.
• The Founder will be able to properly bring this business to profitability.
• Limited competition among competing RV parks in Maricopa County.
• The business will be able to produce significant revenue in any economic climate.
Weaknesses
• This business can have revenue fluctuation based on seasonality.
• RV parks have relatively low barriers entry.
Opportunities
• Expansion a number of RV parking in campsite facilities operate by the business.
• Potential acquisition of RV parks and campsites that are already in profitable operation.
• Continued expansion of the Company’s online focused marketing campaigns.
Threats
• Severe inflation could cause the utility costs of the business to increase.
Appendix B – Risk Analysis
Development Risk – Low
The primary issue that needs to be addressed to securing the funding discussed in this document. Management has already secured the parcel land that will be used to house the campus.
Financing Risk – Low/Moderate
The vast majority of the funding discussed this document will be used specifically for the acquisition of land as well as furniture, fixtures, equipment. The substantial revenues generated from daily fees related to RV park and campsite usage will reduce these risks.
Marketing Risk – Low
The Company will continue to expand upon the marketing strategies discussed earlier in order to drive interest on a national level basis. This will be complemented by print advertisements among noted RV and camping enthusiast periodicals.
Management Risk – Low
The Founder has extensive experience operating large scale real estate focus enterprises. He will be able to quickly bring the operations of this business to significant profitability.
Valuation Risk – Low
The valuation risk is offset by:
• The land will appreciate significantly during the time is held.
• Highly predictable streams of income on a monthly basis.
• The Company can easily scale of operations to include additional RV parks and campsite facilities.
Exit Risk – Low
As noted earlier, the Company will be able to easily sell this business to a third-party in tandem with a licensed real estate broker. This is not expected to occur for a significant period of time as the Founder intends to develop this business is a widely recognized and respected RV park and campsite.
Appendix C – Expanded Profit and Loss Statements
Appendix D – Expanded Cash Flow Analysis
