One of the key goals to buying an RV park is to maximize your return on investment. So how do you do that? In this episode of the RV Park Mastery podcast, we’re going to drill down on the top 3 action steps that smart operators take to increase revenue, decrease cost, and stay on top of all things financial with their property. If an increasing income stream is the goal, then this podcast is all about getting the highest return on your money.
Episode 5: The Top 3 Action Steps To Being A Smarter RV Park Operator Transcript
Welcome back to the RV Park Mastery podcast. This is Frank Rolfe, I'm glad you're with us. We're going to talk today about the three action steps to being a smarter RV park operator and this is going to be a very, very basic instruction and discussion because there really are only three things you have to really focus on if you want to do well with your RV park. The first one, sell, sell, sell. What do I mean by that? I mean you need to maximize your revenue. Obviously, an RV park is an income property, we're all focused on income and there's no better way to increase your income than having more people coming in, more people spending the night, as that's our business model, right? Is we basically house people, park their RVs in the RV park. So, how do I maximize the number of people who come in and how do I maximize how many nights they stay?
Well, the first thing you'll find, if you're going to go ahead and focus on sell, sell, sell as an operator, is that you want to go ahead and make sure that you are in keeping with the modern culture of the internet. Many of these moms and pops that you buy from, that was their big weakness. They never were able to adapt. Yes, they were great at going down and leaving flyers at the tourism office. Yes, they were great talking to all the big events like the state fair, letting people know they had RV spaces. But when the internet came on the scene back in the 1990s, things didn't do that well, they could never really master the technology and like producers in Hollywood back when they changed from silent to talkies, they weren't really sure it was here to stay, so they never really put in the effort.
And some, even to this day, probably think it's not going to stay, but we all know that it, in fact, is. Often with an RV park the very beginning spot you need to have is, you need to have a great website and then you need to have very strong internet search engine optimization. You need to, when someone puts in RV park in that general area of America where you are, you need to make sure that you pop up. If you don't pop up, then you're going to miss a lot of customers, because a lot of people today, that's how they find where they go, is they search online. You have to make sure that when they do search online, that you come up near the top. If you have not accomplished that yet, and you don't have the skill to do it, have somebody else do it.
I know you've got some kind of neighbor kid who's very well versed in the internet who can help you, and at a more higher price there are definitely businesses that will help you do that as well. At the same time, don't forget the old fashioned methods of marketing. Don't just say, "Well, I'm on the internet now, and I've got a nice website, and I've done all that I can do." Because remember that a lot of your customers are not millennials, they're baby boomers, silent generation folk, people who also don't believe in the internet like the moms and pops didn't. Make sure you still staff those slots at the rest house with flyers on your RV park, make sure that you have great signage out front. Do all the things that you can do, both from an internet, technology perspective, as well as a non-technology perspective.
Because if you're going to sell, sell, sell to the fullest, you have to be sure that you've cast as big a net as you humanly can. Also, don't forget, you need customer reviews. A lot of people, when they look online, what are they looking for? They're not only looking for you saying, "Hi, come to my RV park." They're looking for affirmation from somebody who's actually been there, who's said, "Yeah, this is a fun place to go. I really liked this." And give you a good star rating. How do you get those customer reviews? You have to ask for them. Every time someone checks in or checks out, remind them that you would really appreciate some kind of customer review. Now, when you open that Pandora's box, you can't close it. So, hopefully they're going to give you a good review, but it's worth the gamble of getting that one or two reviews that are one star or two star to have a sea of those that are four and five.
Most people are terrified of RV parks that have no reviews at all. They're probably more afraid of one with no reviews than they are with one that has a few bad reviews because it just doesn't seem normal if a business doesn't even have any reviews. So, you've got to push for those reviews as best you can. And in order to better your odds of good reviews and better of your odds of word of mouth advertising, you've got to make sure you have happy customers. That's right, a big part of sell, sell, sell is happy, happy, happy. If your customers love what you do, they enjoy being there, if you are a consummate host, they will reward you by telling all their friends and neighbors, "Have you been to this RV park? I like it a lot." And on top of that, you can also guess that happy people tend to stay longer.
They also tend to come back more frequently. So, when you add it all together, what it really means is you need to cast as big a net as you can on the advertising side to draw people to your property, but then you need to make sure once they get there, they're super happy. It will not get you anywhere if you can do one without the other, the whole key to sell, sell, sell is maximization. That's maximization of customer satisfaction and also maximization of number of customers coming in.
Now, let's turn it over to cut, cut, cut. Now, what can you cut in an RV park? What costs can you cut? Well, that is a key question because you don't dare cut down on your quality. If you cut down your quality of service to the customer, you've just blown item one, sell, sell, sell, just went out the window, if people come in and they're unhappy, because you've been scrimping on every corner and now suddenly nothing's open, or it's all beat up, or the net has gone off the basketball court because you just didn't want to spend that $7 to buy a new one. So, that's not going to work for you.
So, instead you've got to make sure that you take the mindset of a penny pincher, but that you don't in fact be a penny pincher. It's very, very important that you have that good mindset. But then, at the same time you acknowledge, "Hey, I can't be the person that is going to cut corners and yet have a successful RV park." So, what do you do? Take every line item on your budget, every single one, and just think to yourself, "What could I do to reduce this without reducing customer service?"
And a lot of times what you're going to find it simply means to do more bidding of vendors. So, everybody on there, when you buy that RV park, often mom and pop come with some built-in vendors that they use for different items. Make sure that's still the best price. Make sure that you are not getting taken advantage of by someone who has over the years, drifted upward in their pricing. And also, even when people give you good pricing for whatever it may be, don't be afraid to go back and try renegotiate it lower. I know this is America and we don't do a lot of negotiation, unlike some other countries out there, but nevertheless, it's a good skill to have. How do you develop the skill? Watch a few episodes of American Pickers. Watch a few episodes of Pawn Stars. Get in the mode of basically good naturedly, trying to reduce costs.
American Pickers, particularly, you'll see they're all the time talking with the person, trying to get it down, but not with offending them, but instead doing it through humor or basically just try to see if they can cut you a break. So, a big part of cut, cut, cut is going to be all about trying to figure out the smartest way to do something, and the cheapest way, but to still provide great service. Finally, budget, budget, budget, no one has ever been a good RV park operator who did not have a good budget, and who did not follow that budget to the letter. The whole reason you do budgets is to give you a map. What is a budget? A budget is like a GPS system. If you put all the right data into your budget and you follow that, you will get to your destination, which is a certain rate of return on your investment.
So, it's like a map. It's like the compass on a ship. If you don't have a budget, you'll never get anywhere. You'll never achieve your goals ever, if you don't have a budget that tells you how to get there. So, it's very, very important. When you bought that RV park, you probably had a budget. You shared it with your bank, I bet. Well, now that you got the loan and now that you're in business for yourself, don't forget that budget. Don't not revisit that on a regular basis. In fact, I challenge you instead to do what we call a budget actual difference meeting, once a month. How does that work? Well, you take your budget that you bought the RV park with, you take the actual performance, you look at the difference and anything that you did worse than budget you highlight with, let's say, an orange highlighter. Anything that you beat budget, that you did better than budget, you cross through with a green highlighter, and then you only worry about the orange one.
So, if you take it, have a formalized meeting with yourself every month and you say, "Yep, you know what? I did a lot of good things this month, look at all those green stripes. However, I didn't hit my budget on these orange stripes here. How do I fix that?" If you'll go through that exercise, you'll be miles and miles ahead. The best operators I know religiously refer back on everything to their budget. Every time they look at doing anything, even if it's looking at buying a replacement part for their pool, they look and see what is their repair and maintenance budget for that year? How much have they spent so far? Do they really need to buy it now? Could they buy it a less expensive way? Is there a used part out there they could get? You really want to be focused on your budget because, again, you don't want to be some kind of weirdo who's constantly obsessed with money, with all the various pennies that go by. That's not a great way to live your life, but yet you want to be a person who's a smart operator that makes money consistently.
And you certainly want to be the kind of person who hits the budget that you had when you bought the RV park to begin with and you will never ever be able to accomplish that unless you are very, very focused on the budgeting process. And by making sure that you are doing all the steps necessary to ensure that you get the kind of income you thought you would get when you bought the RV park. So, this is frankly the RV Park Mastery podcast. Hope you enjoyed our three action steps to be the smarter RV park operator. I know you can do it. I know that many, many people out there listening are going to say, "Well, I don't know if I'm up to it." I know you're up to it. Anyone can sell, anyone can cut and anyone can budget, it's done every day and you can do it too. We'll talk to you again soon.