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How Profitable Do You Think Your Campsite Will Be?
Read on, as we examine in detail what comprises the running costs of a typical campsite.
Your basis of estimate
Metrics on any numerical problem solving journey form the basis of understanding upon which your estimations can be made.
If your numbers are experiential and therefore based on real life, you should achieve a closer to the actual estimate, than if purely theoretical.
Take home benefits
We aim with this article to assist you in your understanding of how such financial running costs directly impact your expected campsite operating profit, and net earnings thereafter.
We hope you enjoy the read…
Typical campsite running costs – examples
In our research on this subject, we came across very few genuine experienced online sources of advice, but among them where UK Campsite Forum and The Farming Forum.
Within topical discussions on campground costs and earnings we found some members took their time to really dig deeply into the minutiae of campsite operational metrics, providing some reliable benchmarks for determining cost.
A little advice from experienced owners…
“…also don’t forget that if you are operational, campers don’t want you bashing and crashing around during the season, which tends to mean the winter months are what you are left with to develop – ice, freezing cold conditions were when we put down some foundations!!! Had to invest in a pump another winter to get the water out of the trenches!!!! You absolutely need a decent contingency………..”
“Be aware of any seasonal issues, floods, nuisance insects such as army ants or mosquitoes, familiarise yourself with regional climate and animal or insect life that may affect your clients.”
Grounds Maintenance – grass cutting lawn mowing, tree maintenance etc. are all necessary cost items involved in maintaining your campground and making it functionally hospitable for your guests. Staff on payroll, a contractor company or local sole traders are alternative ways which you might satisfy the need for maintenance.
Administration – bookkeeping, office admin or on-site customer service personnel may be a necessary expense, where delegating office based duties are more cost effectively handled by staff, rather than by you – the owner.
Rent
Mortgage repayment – if you’ve taken out a loan with the bank and owe them back for the privilege of utilising their capital sum to secure your campground, then you’ll need to prioritise the repayment of this from your takings.
Insurance
Public liability insurance – with the general public accessing your commercial premises as customers, public liability insurance is a matter of course.
Building & contents insurance – buildings and contents insurance for your campground ensures you have the value of your prized assets covered should there be any unforeseen damage incurred which would support a claim.
Electric
Pitch hook up – the use of electricity will vary with the occupation of pitches by guests
Outside lighting – security lighting and outdoor ambient lighting for campers at night
Toilet – some toilets on campsites will have a power-assisted flushing mechanism, with macerator…facilitated by electricity supply
Reception – your 3rd party IT office services like, WiFi, will need a reliable power supply
Laundry – washers and dryers by manufacturer’s specification will have a set power usage per cycle/spin, extrapolate these numbers by expected usage from occupancy and build a ballpark estimate of cost
Playroom – electronic games, visual screens and lighting output might be necessary if you offer games rooms facilities
Water
Clean water – clean water supply for drinking, toilets and washing is necessary for guests on your campsite. Your local water authority will be responsible for this and will bill you accordingly.
Gas
Propane bottles – otherwise known as camping gaz is typically used on-sites to heat the toilets in the winter. The rate at which you go through them will be related to occupancy and season – this will in term determine rate of purchase and overall expense.
Septic Tank
Emptying – the capacity of the septic tank is your rate determining step for emptying. Tank capacity, number of people using (i.e. occupancy) and volume of solids all have bearing on the regularity of sceptic tank emptying.
Refuse Collection
Wheelie bins – bought form your council during the start-up period usually for a lump sum fee. Thereafter the collection of wheelies can be booked with the council refuse team. Again, budgetary estimations should take into account varying levels of business intensity on-site from one season to another.
Recycling bags – there is usually a different tariff charged by the council for the clearing of recyclable waste. Consider the varying use depending on your operational factors and how this will impact your spend.
Phone/Wifi
WiFi internet service – in more rural locations there may be a need for signal boosters, which come at additional cost from providers. There are also various price models applied by WiFi providers. But typically there are those that charge the host directly with set-up and ongoing fees and there are those rpoviders that charge the users directly via a payment gateway.
Gas & Electricity Testing
Official engineer testing – an approved and accredited engineer will be required to inspect both gas and electricity supplies onsite. Their goal is to assure safety. which in turn offers peace of mind and validation for related insurance policies.
Transactional Charges
Bank – receipts, deposits, statements etc. each bank has it’s own stipulations within account documentation which dictate where fees in exchange for services rendered.
Card payment terminal – card terminal solutions charge various types of fees and debits.
Repairs & Maintenance
Breakages – toilet seats, grounds equipment for example will from time to time become impaired in function, or even might fail entirely. Repairs or replacements would be necessary in such cases.
Advertising
Website – your campsite’s business website could be a very cost effective method of advertising your services organically via search engines. However, annually you will have associated costs such as hosting, domain renewal and associated web services like SSL certificates.
Paid advertising – strategically placed banner advertising on selected websites can also offer a consistent drip feed of referral traffic and improved rankings.
Consumables
Petrol/Diesel – strimmers, mowers, tree cutters, tractors and other equipment requiring fuel for functioning will need to be supplied. Some seasons or periods will call for more usage than others.
Toiletries – you will be expected to supply sufficient amounts of toilet roll & other essential toiletries for guest use, inclusive in their pitch fees. Demand will vary and should be aniticipated according to occupancy and usage.
How to estimate campground annual turnover, expenses, profit (margin) & earnings
EBITDA vs. actual earnings
EBITDA is earnings ‘before interest, tax, depreciation and amortisation’.
To calculate the amount of money available to be retained as earnings, simply subtract interest charges on loan, income tax, value depreciation on assets…the rest is up for grabs, so to speak.
Technically, this remaining sum will be available for withdrawal from the business as earnings, however could be reinvested for improvements.
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How Profitable Do You Think Your Campsite Will Be?
