By Dale Bourdette

I get many interesting phone calls but many start with some perceived common knowledge about campground sales and valuation. Here are a couple comments with my discussion.

"What does it net?" The second one is "What is the Gross?"

Both are valid questions but some things go into the discussion that should be considered. In the end you have to analyze and determine what the campground WILL net your first year of operation. It does help to know what it did net last year, but this can be a "managed" figure. If a campground owner is planning to sell he can "manage" his expenses to show a better net than what it normally does. He can delay or omit expenses that have to be done and voila… a better net.

The second comment, "What is the Gross?" is followed by how come it is priced so high, everybody knows that campgrounds sell for _____ times gross. That "everybody knows" number varies from 3 to 5 times gross or even further out! As I have said on other occasions, I have sold campgrounds for 1 times gross and 10 times gross… and both of those campgrounds worked out just fine for the buyer! When a buyer says something that "Everybody Knows" I put up my guard!

But both are good figures for evaluation. The first one you should look at is the "Gross". This is the quickest evaluation of a campground. It tells you just how much money the customer is willing to put down on the registration desk to buy the services of the campground. This number can be manipulated, but much less than the net. After getting that figure, you have to dig into the numbers. Where is that money coming from? If it is a lot of store and food service sales, that is less valuable than site registrations. (these have cost of goods and labor expenses)

As to "Net" you will have to look into the numbers and see what YOUR net will be. You may want to or have to run the park differently than the seller. You will look at all the expenses and see if any were "managed" or omitted.

So look at both figures, but do a little "mining of the numbers" before you say; "Everybody knows…."