Do you want to start a water park? If YES, here is a complete guide to starting a water park business with NO money and no experience. Water parks are wholesome vacation destinations for people all over the world regardless of their age and status. The environment is often filled with adventure and so any entrepreneur who thinks they love such an environment can totally start the business as long as they have enough capital at hand.
Just like any business, you will be required to take an active role in most important aspects of the business. If you have no idea on how to run a water park, it is important that you make all the findings so that you do not end up wasting your time and resources.
While making a thorough research about the business is important in order that you might know all the intricacies involved in running the business; you will also need to build a solid business structure by gathering a management team that is not only knowledgeable but also experienced as well.
There are several duties that will be delegated in other to keep the water park up and running. Ensure that you understand what you should handle directly and what should be delegated to each team member. However, the fact that you delegate a task does not mean that you shouldn’t supervise to ensure that they are carried out in accordance with your intended goals.
Even though you meet all the necessary requirements when starting and running your water park business, but you have to explore various ways the water park will let you recoup your investment early especially if you had to source for loan to start the business.
Every water park usually charges an admission for each visitor that enters the place but those that become profitable are those that offer additional activities and services in order to not only improve upon customer satisfaction but also increase their bottom line as well.
Every investor will want to see a water park business plan that is comprehensive before they invest their money, and so if you cannot write out a business plan, ensure that you get a professional to write one for you.
Starting a Water Park Business – A Complete Guide
- Industry Overview
Water parks have become such a huge deal over a period of five years (2012 to 2017) especially as the booming economy which has seen a fall in unemployment rates and a rise in per capita income have helped to boost revenue in the industry.
Also, the fact that there has been an increase in the way customers spend especially on discretionary items have caused the industry’s fortunes to continue to boom. According to IBISWorld, it is expected that the industry will continue to grow in the next five years (2017 to 2022) as the growth in the economy will greatly help the tourism sector.
The revenue generated by this industry annually amounts to $3 billion and the growth experienced by the industry between 2012 and 2017 annually is at 10 percent. There are more than 156 water parks in the united states according to IBISWorld, employing nearly 50,000 people.
The industry is however viewed as highly saturated which is why there are few new water park businesses, and existing operators try to bring in more revenue from the existing market by offering new perks and providing extra services in order to retain a high number of their customers.
The water park business is seasonal in nature and due to this, most of the industry operators usually choose to run the business in regions where the weather is favorable.
Most water parks for instance are located in states such as California, Florida and Texas. Colder climates such as New England and Rocky Mountains attract only about 6 and 3.8 percent of water parks respectively; while the southeast regions has most of all the water parks in the United States. It is expected that in 2017, the southeast region will contain nearly 28 percent of all the establishments in the industry, with Florida alone having about 11.5 percent out of the whole percentage.
According to the International Association of Amusement Parks and Attractions (IAAPA), spending for water parks on a global level is close to $40 billion especially as other countries – China, Japan, France, South Korea and Hong Kong – aside from the United States also have popular destination water parks and attractions that bring in visitors from all over the world.
Demand in this industry is usually driven by the income of the consumer and because of the saturation in the industry; individual companies depend on exceptional marketing in order to be able to achieve a healthy bottom line.
Table of Content
Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographic compositions of those who are likely to visit a water park are local families, teens, young adults and tourists. These groups are usually those who are mostly targeted during promotional efforts. Therefore, if you are looking to define the demographics for your water parks business, you should know that while you might be looking at making it all encompassing, your target market will not be everyone.
List of Niche ideas Within the Water Park Business That You Can Specialize in
Those who run water parks often find that they have to offer additional features in order to sustain and continue to grow the business, hence the specializing in niche areas. Even though there are not much niche ideas for an entrepreneur running this kind of business to go into, several innovative entrepreneurs have stood out because of the niches they are into.
One thing to note is that a large water park can afford to go into several niches unlike a small water park. Some of the niche ideas that you can specialize in are;
- Operating water attractions
- Sale of Merchandise
- Sale of Food and Beverages
- Operating of Recreational bathing Facilities
The Level of Competition in the Water Park Industry
The level of competition in the water park business industry can be said to be fragmented as only few players have dominance over the entire industry especially if they are large enough or are in more than one location. For the most part, competition is usually on a local level amongst existing operators.
In order to compete fairly against your competitors, you will have to choose an appropriate location to run your park. If your vision is become a world class destination water park, then you must choose a location that not only the locals will be able to easily access but also visitors and tourists from other states and countries too.
Therefore, if you are looking to start a water park business in the United States, you should be aware that you will likely be facing stiff competition from already existing water parks as well as alternative attractions and entertainment activities and should therefore be prepared.
List of Well – Known Brands in the Industry
In every industry, there are brands that stand out from the rest and the water park industry is no different as there are several water parks scattered all around the country. Well known water parks are those that offer visitors something unique, those that are large and those that have been in existence for a long period of time.
If you are just starting out your water park business, it is best that you know who the big ones are in the industry. Some of the well-known brands in the industry include;
- SeaWorld Entertainment
- Cedar Fair LP
- Walt Disney Co.
- Six Flags Inc.
- Noah’s Ark
- Water World
According to the World Waterpark Association, there were more than 1,300 water parks in existence in North America as at 2015, the figure climbed up by 30 percent from what was obtainable a decade before. More than 85 million people visited these water parks in 2015, up from about 73 million that visited in 2004. Even though there has been growing concern about the risks even though the water is quite shallow, this hasn’t deterred people from visiting such parks.
According to the International Association of Amusement Park (IAAP), there are over 400 water and amusement parks in the United States where more than 375 million people visit annually. The direct economic impact of all the attractions in the United States was $219 billion as at 2011. Water parks, theme parks and amusement parks generated nearly $55.5 billion out of the whole amount.
In the United States, the attractions industry leads in the creation of jobs that are non-exportable. Directly, the industry employs more than 1.5 million people, while indirectly it employs more than 1 million people, thereby creating a total job impact of over 2.5 million.
According to an annual industry survey by the Family Entertainment Centers (FECs), every year more than 360,000 guests visit an attraction facility and spend an average of 3 hours. Also, most of the guests that visit are usually families with children ranging from the ages of 2 to 18.
Starting Your Water Park from Scratch vs Buying a Franchise
When starting certain businesses in the United States, the decision of whether to start the business from scratch or to buy a water park franchise often becomes a very important one that might make the difference between the business attaining its intended goals and objectives or not.
While either option has its pros and cons, none is necessarily the best because the needs of a business is distinct and so any option chosen should align with the specific needs of the business. Those that chose to buy a franchise are those that are looking to hit the ground running and want to be guided by experienced hands in the business.
In a franchise, you will not need to worry about advertising and several other decisions; however ensure that whatever franchise you intend to purchase aligns with your corporate goals and objectives. Most people that start out the water park business always start from the scratch or buy off an existing water park.
Starting a business all by yourself without any sort of guidance can overwhelm even the most experienced entrepreneur, which is why it is often advised that every entrepreneur has a comprehensive business plan at hand as this is the only way they can remain focused on achieving their goals and objectives. Asides from getting a business plan, you will also need to build a solid business structure.
Possible Threats and Challenges You Will Face When Starting a Water Park
No matter how sure you are of the business you are looking to start, there are still threats and challenges that will crop up and which you have to be prepared for if you are serious about the business. This is why it is often best to have a business plan in place as this will enable you prepare for the scenarios that you might likely face.
However, you should note that there are several threats and challenges that you may likely not have the solutions to and should they occur, the best you can do is to remain focused.
Some of the challenges and threats that you are likely to face when starting out your water park business include; having to compete with already existing water parks, having to deal with consumers’ changing tastes and preferences, economic downturn where there consumers have to spend less as well as government and industry regulations.
Starting a Water Park Business – Legal Matters
- Best legal entity to use for this type of business
One important decision that you will take when looking to start your water park business and which will have a huge impact on your business is the appropriate legal entity to choose. Even though every entrepreneur starting a business in the United States of America has several legal entity options to choose from, not all of the legal entities will be suitable for the business.
In order to avoid confusion, it is best to engage the services of an experienced attorney to help in choosing the right legal entity for your water park business.
Entrepreneurs starting any business in the United States are often faced with the choice of choosing from various legal entities such as Sole Proprietorship, Partnership, Limited Liability Company (LLC), C Corporation and S Corporation. There are several attributes that you can use in deciding which entity is best for your business and they include; ease of ownership and control, flexibility, liability limitation and taxation issues.
While most entrepreneurs always choose the easiest legal entity which is the sole proprietorship, it is not all kinds of business that the sole proprietorship is suitable for as the water park business will expose the entrepreneur severely should he choose this form of legal entity.
For the water park kind of business, the LLC is what most entrepreneurs in this industry opt for because LLC offers the entrepreneur a certain degree of flexibility that cannot be gotten from the C Corporation and the S Corporation. These three legal entities however have similar attributes especially when it comes to limited personal liability but where the LLC has less paperwork; that of a corporation is more rigid and requires tons of paperwork.
If you are however planning to take your company public, then choosing a corporation is the best bet for you as you will be able to raise money from the public unlike the LLC that has no such option. Because of how rigid and the so many procedures that comes with a corporation, it is usually best to let an attorney handle it.
Catchy Business Name ideas Suitable for a Water Park
One of the most vital things that must be done before you can think of getting a business license or getting your company incorporated is giving a name to the venture you are thinking of starting. A business name is very important because it allows you to be identified from other similar businesses.
However, ensure that the name you intend to choose is unique, easily identifiable and memorable. Some of the catchy business name ideas suitable for a water park include;
- Bay Water Park
- Simpa Fair
- Water World Entertainment
- Splash Entertainment
- Trumpin Water Park
There are a number of issues that can shut down a business if the owner wasn’t fully prepared for it. According to statistics from the Insurance Information Institute, out of all the businesses that experience a disaster, only about a quarter of these businesses are able to rebuild.
Every entrepreneur should know that no matter how profitable the venture is, it is still open to risk and so in order to protect the investment and even the entrepreneur, you should buy insurance policies. Ensure that you engage the services of an insurance agent or broker to help with the best insurance policies.
Some of the insurance policies to buy for a water park business in the United States include;
- General Liability Insurance
- Workers Compensation Insurance
- Professional Liability Insurance
- Casualty Insurance
- Property Insurance
- Payment Protection Insurance
- Health Insurance
- Overhead Expense Disability Insurance
- Business Owner’s Policy (BOP) Group Insurance
Intellectual Property Protection/Trademark
While you can put up creative designs in order to make your water park stand out, most of what you design cannot be patented and the best you can do is continue to modify your designs in order to stand out from your competitors.
You can however apply for an intellectual property protection on your company’s name, logo, domain name or any concept you feel is worth protecting. Ensure that you engage the services of an attorney who understands your kind of business and who is knowledgeable in IPP laws to help you out.
Is Professional Certification Needed to Run a Water Park?
One of the important factors that you would need to effectively run your water park business is your start-up capital, business finesse and leadership skills. You do not therefore need to worry about having to get a professional certification before you can start the business; which therefore means that anyone can run a water park business.
This does not however mean that you cannot take certain professional certifications in order to help you run your water park business better.
List of Legal Documents You Need to Run a Water Park
Before looking to start any business in the United States, you are expected to have certain legal documents in place in order not to run into trouble with constituted authorities; this is why it is important that you conduct a thorough research about the business you intend going into so that you will find out what is expected of you.
Better still, you can engage the services of an attorney who has knowledge of the kind of industry you are going into to help with all the necessary documents. Some of the basic documents that you will require in order to start your own water park business in the United States include;
- Certificate of Incorporation
- Operating Agreement for LLCs
- Insurance Policy
- Certificate of Occupancy
- Food Sale License
- Music Licensing
- Sales Tax Permit
- Business Licenses and Permits
- Business Plan
- Income Withholding Tax
- Employment Agreement
- Employer Identification Number (EIN)
- Federal Tax Identification Number (TIN)
Financing Your Water Park
Generally, the water park business requires spending a substantial amount of money and so it might be necessary for you to source for capital from other sources. And to be able to convince others to invest in your business, it is important to have a comprehensive business plan that will show potential investors how you intend to make use of the money and when they should begin to expect a return on their investment.
Before you can however convince an investor to invest in your business, you must also show them how serious you are and how much you have committed towards the business. Some of the financing options that you can explore when looking to start your water park business include;
- Generating part of your start-up capital from sale of stock or valued property
- Applying for loan from commercial banks
- Getting wealthy family members and friends to provide some part of the capital as a soft loan
- Sourcing for venture capitalists and angel investors and convincing them to partner with you
One of the most important decisions that you will be making when looking to start your water park business in the United States is your location as this could make the difference between your business becoming a success or failure. Your location should align with the vision you have regarding the business. For instance, if you are looking to attract tourists and visitors from other states, then you must be located in an area that isn’t too far from a large airport.
Due to the scale of the water park business, it is not something that you can choose to run from your home and this therefore means that you have to source for a location that will meet all the requirements of the law while still enabling you achieve your intended goals and objectives.
Asides from meeting the laws of the zone, ensure that the location that you are picking is a complementary one. A complementary location refers to a place where there are several other attractive activities for people to indulge in such as shopping malls, mini golf courses, tourist spots and other such centers.
Because of the regulations that come with running a water park, you might need to engage the services of a real estate agent experienced in this kind of business to help you in getting the appropriate location to run your water park business.
Ensure that the real estate agent has an idea of your budget so that you do not end up causing a constraint on your entire budget.
Technical and Manpower Details
The amount of startup capital that you would require when starting your water park business will be highly dependent on what your short and long term goals are. One of the most important factors to take into consideration and that will have such a huge effect on your investment is land. Not only must the land be sufficient enough so that your design can fit in, but it should also be carefully chosen.
You can start your water park on a small scale according to your startup capital and later expand it when you start generating enough revenue. Most entrepreneurs have realized that to become successful in this kind of business, your water park has to be large enough to offer visitors a well-rounded experience especially as most existing parks have modified their business strategy in order to attract and cater to the international market.
If you are going to be purchasing the land for your water park, it must be between 8 and 15 acres. Indoor water parks take up 8 to 10 acres, while outdoor parks take between 13 to 15 acres. If you are however looking to build an indoor and outdoor facility, you will need between 9 to 12 acres.
So, the number of acres you eventually purchase will depend on what vision you have regarding your water park. Once you have gotten the acres you need, you will require an experienced consultant and contractor so as to begin the planning and designing process.
The cost for setting up a water park will vary depending on the kind of facility you are looking to build and where you intend building it. On an average, you should set aside between $1 million and $4 million depending on whether you are looking to build an indoor park or an outdoor park.
The costs cover the building, pools, HVAC, snack bar, mechanical, theming, supporting areas, recreation equipment, waterslides, utilities, and employee salaries for at least a certain period till the business starts to generate enough revenue that can be ploughed back.
This is definitely not a business that you can run by yourself and so it is important that you build a solid business structure where you can hire only competent and experienced hands to help achieve your goals and objectives. For this purpose, you will need to hire more than 11 people; from the management staff to regular employees.
The Service Delivery Process of a Water Park
The processes involved in a water park business includes first looking for a suitable location to run the park as it must be somewhere easily accessible to customers. In owning and running a water park, it is important that you have certain business and leadership skills.
The fact that the water park will be visited by people of all ages means that safety should be a top priority for you. While making sure that the Water Park and parking lots remain clean at all times, you must also conduct regular health and safety checks.
You will need to build a solid relationship with reliable vendors so that whenever you place orders, you will get them as at when due.
The Marketing Plan
The entertainment industry is filled with different activities ranging from wholesome entertainment to age-dependent entertainment and this means that while one marketing type might work for one sort, it might not work for another.
A water park business is regarded as a wholesome form of entertainment and this therefore means that when looking to promote this business, you can do so without having to segregate the market as anyone can visit a water park regardless of the age.
Marketing is one of the vital aspects of any business because not only does it allow you to create awareness and generate revenue for the business, but you are also able to penetrate the market and get a fair share for yourself. Also, marketing allows you to compete against your competitors and also stand out from them.
Before you can draft an effective marketing plan for your water park, it is important to ensure that you are located in an appropriate location. If your water park is located in an area that is not too convenient or easily accessible, then all your marketing efforts you will not be too effective and you will also need to put in extra efforts which might end up costing you more.
Ensure that you engage the services of a marketing agency that has the knowledge and needed experience in order to craft marketing plans and strategies that would enable you compete against your competitors. You will also need to recruit an in-house marketing team that will ensure that all marketing strategies crafted are in line with the goals and objectives of the company.
Below are some of the marketing ideas and strategies that you can use in promoting your water park business;
- Empower your marketing executives to meet with corporations and groups to market your water park
- Place adverts about your water park in local and national newspapers and magazines as well as on local and cable television
- Install billboards in strategic locations in order to draw attention to your water park business
- Ensure that your water park is listed in the World Waterpark Association’s Directory as well as in online directories
- Network with hotels and travel agencies so that they can help promote your water park to their customers
Strategies to Boost Your Water Park Brand Awareness and Create Your Corporate Identity
The fact that you have just started a water park doesn’t mean that everyone will flock to it, efforts must be put in to promote the business in order to not only create awareness but stimulate the interest of your intended target market; otherwise you will not be able to generate a substantial amount of capital that will keep your business running for as long as you want it to.
There is no entrepreneur looking to start a business that does not want it to be successful; however in order that a business might become successful, it is important that the entrepreneur consciously comes up with promotional strategies that will enable the business attain the level of success that it has dreamed about.
The many benefits that come with boosting awareness for one’s brand as well as creating a corporate identity is why many businesses especially those that are already in existence do not mind setting aside a particular sum of money every year in order to promote their brand to their intended target market and even the general public.
The internet has made it very possible for businesses to promote and boost awareness for their brands easily and more effectively than it did before. Companies can now decide to promote their services only to the segment of people they want. Not only has this become more effective but it also saves costs as well.
Below are some of the strategies that you can use to boost awareness for your brand and also create a corporate identity for your water park;
- Leverage on social media platforms such as Facebook, Instagram, Twitter and YouTube in order to promote your brand.
- Use incentives such as promotional offers to boost awareness for your water park.
- Install billboards in strategic locations in order to draw attention to your water park.
- Place adverts on local and national newspapers as well as radio and television stations about your water park.
- Develop an interactive website and use this to promote the water park
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