Starting a campsite business in the UK presents common (and ‘not so’ common) choices of business model. It’s worth weighing up the merits of each mode of starting up before taking the plunge.
So, if you’ve got land and are considering starting a campsite business in the UK, here are the 4 main ways to make that start:
#1 Independent startup
This is the blank slate option. New business entity, new site, new facilities – nothing existing, from the foundation up and entirely new venture.
Pros:
- Custom approach: You get to control every step of the process and all variables are at your disposal. That said, without experience, the risk potential could be too steep with the scope for mistakes and error vs. capital investment. Failure, at best, delays and at worst derails profitability.
- Lessons learned: Total exposure to potential upside or downside. Nothing ‘done-for-you’, so what every victory or failures you endure come with valuable lessons learned that you would have forgone with a premade path to success.
- Brand equity: Your brand is at the forefront. All reputational gains garnered along the way are attributed to your unique commercial imprint. You get the credit, not some umbrella company – customers will express loyalty to your business, not a network.
Cons:
- No existing cash flow: You’ll need some working capital to see you through the years of building up your customer base.
- Business process engineering: You have to build your own systems. But how do you know what systems work without any experience?
- Out on a limb: No parent company. No franchise owners. No built-in support network.
Who’s this for?
- Experienced campsite owners: It makes sense that with the risk/reward trade-off being heavily weighted towards ‘risk’, starting up an independent campsite business would suit those who are likely to make fewer mistakes i.e. experienced campsite owners.
- Financially resourced: All landscaping and amenities with utilities services (plus, other operational systems ie. digital marketing, branding etc.) has to be installed and funded.
#2 Acquisition (Campsite Business For Sale)
Buying an existing campsite business is an option if you don’t have land. Most campsites for sale will come with the owner’s accommodation i.e. a smallholding. Searching the campsite business for sale listings will reveal homes with campsite businesses attached.
Pros:
- Bolted on cash flow: An existing business will come with existing cash flow – it pays you from the start. But remember camping businesses are seasonal. Busy in Spring/Summer and flat in the Autumn/Winter. Also, cashflow doesn’t necessarily mean profitable.
- Existing amenities & systems: When buying a campsite business, with the right due diligence, you can target opportunities with your wishlist amenities already built-in. However, well-developed sites cost more to acquire, but will consequently attract more visitors.
- Previous trading history: Previous trading history and accounts helps you and partners/suppliers/investors ‘see into’ the finances of the business. This can be leveraged for goodwill and used for growth potential.
Cons:
- Hidden costs: Aside from commission to brokers, marketplaces or legal fees, there are potential surprise costs that some owners miss during the due diligence stage. It’s always worth having contingency funds on hand to absorb these issues and keep your plans moving forward.
- Misaligned valuation: The valuation multiple is based on the expected potential of the subject business to pay off the acquisition cost. The more profitable the business, the higher the value multiple paid by the buyer. However, estimating profit if dependent on accurate financial records, and many a mishap can be made in this area, leading to overinflated values and prolonged pay back periods.
Who’s this for?
- Pre-land investment: If you’re yet to find land, then busying an existing campsite is an obvious (but tricky) choice.
#3 Franchise
All you need is land and access to capital finance. The franchisor offers the expertise, customer demand and business systems that are proven to work.
Pros:
- Tried & tested model: Their business model works. It’s proven, avoids all the easy novice mistakes and leverages years’ worth of trial and error. Save a lot of wasted time and money.
- Built-in audience: They have built-in customer demand. From day one, you get bookings without having to spend on marketing.
- Brand association: All positive connotations with the franchisor’s brand are instantly associated with your business. The usual sales objectives associated with the uncertainty of a new brand are sidestepped.
Cons:
Constraints: To qualify for acceptance by the franchise owner, you’ve got to stick to the rules. Any diversion will risk losing their support.
Narrow audience: If you start your own independent campsite business, you can target you own customer segments. But working with a franchise means their audience is all you’ve got.
Who’s this for?
Inexperienced: Franchising is really for owners who lack the confidence to go it alone and want their hand held to reduce the risk of failure.
#4 Partnership
Got land – but don’t want the hassle of running the campsite yourself? Consider collaborating with the an operational partner. Essentially, get a business tenant and charge rent.
Pros:
Passive income: Minimal time investment (perhaps the odd meeting with tenants). Cash flow from rent or revenue share without operational commitment.
Cons:
Low control: You have no say in how the business is run. Though you can write into the contract certain rules that tenants should observe when operating on your land.
Dependency: Your income derived is entirely dependent on the operator’s ability to generate success. They fail, your income fails.
Slower payback: If you take on infrastructural costs, your payback from tenancy is slower than if you enjoyed 100% of the profits.
Who’s this for?
Landowner with capital, but little time: The absentee owner model – ideal for landowners with spare cash, but no time to commit to run the business.
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