Is it time to sell? Selling your campground, RV park or cabin resort is a major decision! You have devoted your time, money, and energy into building, running, and operating your campground. It may well represent your life's work. If you have already decided that now is the right time to sell a campground, you want the very best professional guidance you can get. This is when working in tandem with a professional can make the difference between just getting rid of the campground and selling it for the very best price and terms!
"The difference between being for sale and being sold"
We act as your guide to:
- Protect Confidentiality
- Campground Valuation
- Justify Your Asking Price
- Prepare Your Business For Sale
- Attract Multiple Buyers
- Analyze Offers
- Complete The Transaction
"You Need Us When It Is Time To Get The Job Done"
SELL YOUR CAMPGROUND OR IMPROVE YOUR CAMPGROUND. Our objective when working for existing business owners is to help them arrange financing, valuation and prepare their campground for sale. A recent survey of business owners listed maximizing the value of their business as the most important part of their exit plan. Our business is making your campgound more valuable. When the time comes to sell a campground, you are ready.
WE BEGIN WITH A PERSONAL ONE-ON-ONE MEETING TO DISCUSS AND ANALYZE THE FACTORS THAT INFLUENCE THE VALUE OF YOUR CAMPGROUND. THIS NO-COST SESSION TO HELP POSITION YOUR CAMPGROUND TO HAVE THE HIGHEST VALUE IN THE MARKETPLACE. WE GO FAR BEYOND "RULES OF THUMB" TO HELP YOU PLAN FOR THE FUTURE.
IT'S BEEN SAID THAT "NOBODY WHO HAS FAILED COMPLAINS THAT THEY GOT TOO MUCH USEFUL ADVICE".
Following are some of the most common topics and questions frequently brought up by sellers. If you have any questions that we have not covered, please don't hesitate to contact us. We want to hear from you and we would prefer to answer your important questions early in the planning process.
For Campground Sellers
If you've gone this far, then selling your campground, selling an RV park or selling a cabin resort has aroused enough curiosity that you are taking the first step. You don't have to make a commitment at this point; you are just getting informed about what is necessary to successfully sell your campground. This section should answer a lot of your questions and help you through the maze of the process itself.
The first question almost every seller asks is: "What is my campground worth?" Quite frankly, if we were selling our campground, that is the first thing we would want to know. However, we're going to put this very important issue off for a bit and cover some of the things you need to know before you get to that point. Before you ask that question, you have to be ready to sell for what the market is willing to pay. If money is the only reason you want to sell, then you're not really ready to sell.
It doesn't make any difference what you think your campground is worth, or what you want for it. It also doesn't make any difference what your accountant, banker, attorney, or best friend thinks your business is worth. Only the marketplace can decide what the value of your business is. An independent certified business appraiser can provide an accurate range of values to educate you about what to expect from your campground.
OUR "PRICE JUSTIFICATION REPORT" IS THE LOGICAL FIRST STEP. This is much less expensive than a campground appraisal and is often referred to as a campground valuation report.
The second question you have to consider is: "Do you really want to sell this campground?" If you're really serious and have a solid reason (or reasons) why you want to sell, it will most likely happen. You can increase your chances of selling if you can answer yes to the second part of this question: "Do you have reasonable expectations?" A yes answer to these two questions means you are serious about selling.
The First Steps
Okay, let's assume that you have decided to at least take the first few steps to actually selling your campground. Before you even think about placing your campground for sale or contacting a campground broker, there are some things you should do first. The first thing you have to do is to gather information about the campground, RV park or cabin resort.
Here's a checklist of the items you should get together:
- Three years' profit and loss statements
- Federal Income Tax returns for the campground
- List of fixtures and equipment
- A list of the loans against the campground (amounts and payment schedule)
- Copies of any equipment leases
- A copy of the franchise agreement, if applicable
- An approximate amount of the inventory on hand, if applicable
- The names of any outside advisors
If you're like many small campground owners, you'll have to search for some of these items. After you gather all of the above items, you should spend some time updating the information and filling in the blanks. You most likely have forgotten much of this information, so it's a good idea to really take a hard look at all of this. Have all of the above put in a neat, orderly format as if you were going to present it to a prospective purchaser. Everything starts with this information. A professional campground consultant will be able to assist you with all of the paperwork.
Make sure the financial statements of the campground are current and as accurate as you can get them. If you're half way through the current year, make sure you have last year's figures and tax returns, and also year-to-date figures. Make all of your financial statements presentable. It will pay in the long run to get outside professional help, if necessary, to put the statements in order. You want to present the campground well "on paper." As you will see later, valuing a campground, RV park or cabin resort usually is based on cash flow. This includes the profit of the business, as well as the owner's salary and benefits, the depreciation, and other non-cash items. So don't panic because the bottom line isn't what you think it should be. By the time all of the appropriate figures are added to the bottom line, the cash flow may look pretty good.
Prospective buyers eventually will want to review your financial figures. A Balance Sheet is not normally necessary unless the value of your campground would be well over the $1 million figure. Buyers want to see income and expenses. They want to know if they can make the payments on the campground (more on this later) and still make a living. Let's face it, if your campground is not making a living wage for someone, it probably can't be sold. You may be able to find a buyer who is willing to take the risk, or an experienced industry professional who only looks for location, etc. and feels that he or she can increase business.
The big question is not really how much your campground will sell for, but how much of it can you keep? The Federal Tax Laws determine how much money you will actually be able to put in the bank. How your business is legally formed can be important in determining your tax status when selling your campground. For example: Is your business a corporation, partnership or proprietorship? If you are incorporated, is the business a C corporation or a sub-chapter S corporation? There are also tax rules that impact certain campgrounds on seller financing. The point of all of this is that before you consider price or even selling your campground, it is important that you discuss the tax implications of a sale of your recreational business with a tax advisor. You don't want to be in the middle of a transaction with a solid buyer and discover that the tax implications of the sale are going to net you much less than you had figured.
Who are the Buyers?
Buyers buy campground, RV park or cabin resort for many of the same reasons that sellers sell campgrounds. It is important that the buyer is as serious as the seller when it comes time to purchase a campground. If the buyer is not serious, the sale will never close. Here are just a few of the reasons that buyers buy campgrounds:
- Laid-off, fired, being transferred (or about to be any of these)
- Early retirement (forced or not)
- Job dissatisfaction
- Desire for more control over their lives
- Desire to do his or her own thing
A Buyer Profile
The buyer will never have owned a campground before, and most likely will buy a campground he or she had never considered until being introduced to it. Buyers want to do their own thing, be in charge of their own destiny, and they don't want to work for anyone. Money is important, but it's not at the top of the list; in fact, it probably is in fourth or fifth place in the overall list. In order to pursue the dream of owning one's own campground, the buyer must be able to make that "leap of faith" necessary to take the risk of purchasing and operating a campground.
Buyers who want to go into business strictly for the money usually are not realistic buyers for a campground, RV park or cabin resort. Keep in mind the following traits of a willing buyer:
- The desire to buy a campground
- The need and urgency to buy a campground
- The financial resources
- The ability to make his or her own decisions
- Reasonable expectations of what campground ownership can do for him or her
What Buyers Want
This may be a bit premature if you not have decided to sell, but it may help in your decision-making process to understand not only who the buyer is, but also what he or she will want to know in order to buy your campground. Here are some questions that you might be asked - and, should be prepared to answer:
- How much money is required to buy the campground?
- How did you arrive at an asking price and do you have a campground valuation report or an appraisal?
- What is the annual increase in sales?
- How much is the inventory?
- What is the debt?
- Will the seller train and stay on for awhile?
- What makes the campground, RV Park or cabin resort different/special/unique?
- What further defines the product or service? Repeat business?
- What can be done to grow the campground?
- What can the buyer do to add value?
- What is the profit picture in bad times as well as good?
Buyers Want Cash Flow
The first thing to keep in mind is that the vast majority of buyers want to buy cash flow. Sit down with your accountant or bookkeeper and begin to get your financial statements in order, with cash flow the order of business. Cash flow is not the same thing as profit. Most buyers look at the profit and loss statement or tax return, as well as owner or family compensation.They will consider any excess compensation to employees and family. Buyers will also look at large, one-time expenses such as a new computer system or remodeling. They will consider non-cash items like depreciation and amortization. Interest expenses will be reviewed, as will owner prerequisites. These are items that a professional campground consultant considers when advising a selling client on a selling price.
What about the Internet? The Internet is a real "buzz" word - and if its use is appropriate for your campground, then developing a web site is important not only to your on-going business, but also to a buyer. Many buyers are conscious of what the Internet is doing for many campgrounds. If you have a web site for your business, it could be a big plus.
What Can You Do?
Appearances Do Count
The time to replace that old worn-out piece of equipment is before you decide to sell. Don't assume that a new owner will want to do it or that the price will just be slightly lower because you haven't replaced it. The time to "spiff up" the campground is now, even if you aren't selling. Fix the sign, replace the carpet, paint the place - make it look good. Even if you're not selling, it's just plain good for business, and you never know when the time to sell will occur. Keep in mind that anything that increases sales also increases profits and the all-important cash flow!
Everything Has Value
There are other things that add value to your campground. Don't discount the value of customer lists, proprietary products and/or techniques, well-maintained equipment, secret recipes, customized software programs, or good employees. These are termed "off-balance sheet items," and although not used in most pricing models, they add to value. Look at your campground very carefully so you don't overlook those items that make your recreational business more attractive to the buyer.
Eliminate the Surprises
Long before you put your campground on the market, eliminate the surprises! Review every facet of the campground and remedy any problems that could appear during the sale process. No one likes surprises - most of all potential buyers. Whether legal, accounting, environmental, or anything else - solve it now.
This may sound like something that should have been done when the campground first started, so it may be "after-the-fact". You should create an operations manual. You may already have one, or started one years ago, or simply, have thought of doing one. Now is the time! It may actually create added value to the campground. Even if it doesn't, it will impress buyers that you have your business "act" together and should help you sell more quickly and effectively. Preparing a manual on how to operate your resort can also be helpful even if you don't want to sell. It doesn't have to be elaborate, just cover the basics. A collection of ads that you have placed in a catalog or sample of products, publications, or menus (if the business is food related) is also impressive. Include anything to do with the business that might be helpful for a new owner. However, don't include anything that is proprietary, such as customer lists, suppliers or secret recipes, etc.
We look forward to working with you in finding a suitable buyer for your campground. You, as the seller, are an integral part of the total marketing program. Below you will find a few friendly recommendations that will help in our marketing efforts when you decide you are ready to sell.
- Keep normal operating hours. There may be a tendency to "let down" when you put your campground up for sale. However, it's important that prospective buyers see your campground at its best.
- Repair signs, replace outside lights, etc. You don't want your campground to look as if it has been neglected.
- Maintain inventory at a constant level. If you let your inventory slide, your store will look neglected. If anything, increase it so your store will look busy.
- Remove items that are not included in the sale and unnecessary items, especially if inoperative.
- Repair non-operating equipment or remove it if you are not using it.
- Tidy-up outside premises.
- Spruce-up the inside of the store, laundry, game room, bathrooms, etc.
It might also be helpful if you took a good look at your campground, RV park or cabin resort from the perspective of a buyer or even a campground broker. Try to put yourself in the place of a prospective purchaser of the campground. What would you do to make it more attractive or more saleable? Obviously, the financial records of your business are critical to the sale of your camping resort, but how it looks is also important. First impressions really count! If a potential buyer doesn't like the appearance of your campground, the rest of it may never get a chance. If you have any questions, please don't hesitate to call us. We look forward to hearing from you!
Do You Have Other Questions about selling your campground?
Be sure to visit Selling FAQ for answers to the following questions:
- How long does it take to sell my campground?
- What can campground consultants do - and, what can't they do?
- What can I do to help sell my campground, RV park or cabin resort?
- What happens when there is a buyer for my campground?
- Why is seller financing so important to the sale of my campground?