You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple step guide to starting your waterpark. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your Business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How long it will take you to break even?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a waterpark?
Costs associated with taking on such an endeavor will depend largely on your short and long-term goals for the park. Your first, and most important investment, will be in land. When choosing your location, carefully research the areas you’re considering. Choose a well-populated areas, centrally located for easy customer access. If your vision is to operate a large tourist attraction, choose a city with an airport. Visitors arriving from other states, cities, and countries will be ready to start their experience. If they have to travel several additional hours to get to their final destination, they may decide to make other plans. Experienced waterpark owners recommend purchasing between 8 and 15 acres of land, depending upon what type of waterpark you plan to build:
- Indoor parks average approximately 8-10 acres, with an average building size of almost 25,000 square feet.
- Outdoor parks require 13-15 acres
- An indoor-outdoor facility would need 9-12 acres, with an average building size of 23,000 square feet.
Once you’ve purchased the land, meet with an experienced consultant and contractor to begin the planning process.
Construction costs will vary depending upon how large of a facility you wish to build and where in the country you’re building, but average between $250 and $600 per square foot. Reports indicate an indoor park with 2720 square feet would set you back almost $690,000. Included in these costs are: building, HVAC, pools, mechanical, snack bar, supporting areas, theming, and waterslides and recreation equipment. For the same construction services, a 9450 square foot indoor park would run close to $2.5 million, averaging $273 per square foot. Owners of exclusively outdoor park report startup costs of approximately $1.5 million.
Do not let these numbers discourage you. To save on costs, many park owners purchase enough land to fulfill their vision, but start out with the essentials that fit into their budget. As business picks up, they invest a portion of their profit back into the business, adding attractions over time. In addition to saving your startup budget, this also helps retain customers. Families are excited to return, as they're anxious to see what’s new. They start to feel as though they’re part of the process and will develop a loyalty that is unmatchable.
What are the ongoing expenses for a waterpark?
It’s difficult to quantify a park’s ongoing expenses, as there are a number of factors that directly influence these numbers. The following are items you should include in your monthly budget:
- Maintenance of attractions, facility, and equipment - a preventative and predictive maintenance program can save you tens of thousands of dollars.
- Utilities and chemicals -this, combined with maintenance, averages approximately 8-12% of your operational costs.
- Construction of new attractions
- Operational supplies - 3-5% of your budget
- Ongoing training for staff
- Payroll - personnel costs will comprise 50-80% of your operational budget, depending upon the size, hours of operations, and staffing levels required to maintain a safe customer experience.
Who is the target market?
Many parks cater to the needs of customers spanning every age group. For some, tourists encompass a large portion of their customer base. For others, local families, teens, and young adults are the focus of their marketing efforts.
How does a waterpark make money?
Waterparks charge an admission for each visitor that enters. Many offer additional activities and services--like food and equipment rentals--which improve visitor satisfaction and profit potential.
How much can you charge customers?
Some parks charge a flat admission fee, regardless of age (2 and under free) while others offer special pricing depending upon age or height. If you have quite a few rides whose height requirements would exclude a large group of customers, consider doing the latter. Some parks charge an across the board average $43 per person. Pricing based on age/height is approximately: 48" and taller - $35, under 48” - $27, senior and military - $17. Fees include admission into the park and unlimited water slide rides. Customers are charged extra for additional services and attractions.
How much profit can a waterpark make?
This industry has realized significant growth over the last decade and is expected to continue at approximately 3.5% annually. While there are is no published information regarding a water park’s potential profit, research does indicate that over 375 million guests visit these establishments in the United States each year. With a meticulous operational strategy in place, your park can earn a piece of this multi-billion dollar industry’s profits.
How can you make your business more profitable?
Many parks expand their goods and services to include more than just water slides/rides. To make your business more profitable, consider implementing some of these strategies:
- Make it a true vacation destination by building a hotel as part of the water park.
- For a nominal fee, allow local businesses to display signage in the parking lot and throughout the park.
- From the onset, invest in water recycling and energy efficiency programs. Your initial costs will be greater, but you’ll save a significant amount of money over time.
- Offer group rates, state resident discounts, and annual passes
- Include extra services for an additional fee - cabanas, lockers, souvenirs, food, and private party rooms.
- Provide additional entertainment, such as mini-golf, go-carts, climbing walls, bumper boats, and a gaming and redemption center.
- Offer retail space for tenants to lease. This will help reduce your overhead expenses as you support other businesses within the community.
- Host special events during your “off” season. Many parks build haunted houses during Halloween, drawing a significant number of guests each day.
Rather than building a concrete park, make Mother Nature your park. Entrepreneurs have found success opening establishments like Bob’s River Place, where visitors can float on rafts, rope swing, slide, jump in platform, log roll, water volleyball, grill, and picnic. Startup and ongoing expenses will be a fraction of the cost, as you use natural resources to your advantage.
What will you name your business?
Choosing the right name is very important. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your waterpark is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
For most small businesses forming an LLC is a great option, but if you still want to weigh all your options check our our article, What Structure Should I Choose for My Business?
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a waterpark. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
Certificate of Occupancy
A waterpark is generally run out of a large outdoor or indoor space. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
- If you plan to lease a location:
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a waterpark.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
STEP 7: Get Business Insurance
Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
How to promote & market a waterpark
As with any business “growing up” in these technological times, it’s critical that you maintain an online presence. This is a great tool for keeping current and future customers informed of the latest news, exclusive deals, and special events. Ads in local and surrounding area newspapers, radio, and television are also a great way to get the park’s name recognized in the community. If your goal is to attract tourists, develop relationships with travel agents and hotel management, as they’re often the ones helping families plan their vacation. Additionally, most state welcome centers have an area dedicated to local attractions; leave pamphlets for visitors passing through. Be sure to list your park in the World Waterpark Association’s Directory, which should help reach customers you might not normally come in contact with.
Recommended: Get started with local advertising for your business with a $300 credit from Yelp.
How to keep customers coming back
Every successful entrepreneur knows that word of mouth can be your best friend or your worst enemy. Work to establish a positive reputation for the park by offering a safe, clean, and fun retreat for your customers. If someone expresses disappointment, do everything in your power to turn their bad experience into a good one. This level of service ensures your customers will keep coming back and will, hopefully, bring all their friends.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Start A Waterpark In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Entrepreneurs with previous small business ownership or management would be best suited for this business venture. Innovators who enjoy a fast-paced atmosphere and are dedicated to reinvesting a portion of their profits can turn a small waterpark into a million dollar enterprise in a matter of years.
What happens during a typical day at a waterpark?
When introducing your waterpark, you’ll want to take an active role in most aspects of the business. Your park will be frequented by customers of all ages - safety should be the top priority at all times. As you gain a better understanding of the intricacies of running a business of this magnitude, you can start building an experienced and knowledgeable management team to relieve you of some of your duties. Most days you’ll either perform the following duties, or delegate them to a valued team member:
- Make sure the park and parking lot are clean at all times
- Build relationships with vendors and place orders whenever necessary
- Conduct regular health and safety checks throughout the park
- Manage your staff
- Manage the customer experience
- Network within the community and industry
- Market your park
- Strategically plan and implement strategies to continuously improve employee and visitor satisfaction
- Research and develop new concepts to expand the park
- Liaise with contractors and other professionals to implement new concepts
- Oversee personnel and/or human resources
- Track industry trends, including legislation, on a national and local level and monitor the competition
- Build relationship with members of the community. Work with them to alleviate any issues or concerns they might have
- Set budgetary and financial strategies and oversee the organization’s finances
Before opening your business, draft a business plan that outlines your vision for the park. Consider how large of a role you wish to take in running the business, as well as your growth goals for the park.
What are some skills and experiences that will help you build a successful waterpark?
Owning a water park requires a high level of business finesse and leadership skills. Everyone you surround yourself with, from park builders to management and staff, will be instrumental in defining success. Therefore, it’s critical for you to be adept at identifying and employing individuals whose intentions align with the company’s mission.
While knowledge of business and/or hospitality management would prove beneficial, prior experience in customer service is invaluable to your business’ success. Leaders must be skilled in communicating with and motivating staff, and should be decisive and resourceful in making business decisions. This industry demands constant innovation. Thus, many park owners have prior experience in design, often viewing the park’s attractions as a form of art.
Those considering entering this industry are urged to gain firsthand experience. This will offer invaluable insight into who your target audience is and what they’re looking for in a waterpark experience. Additionally, membership with the World Waterpark Association would prove beneficial. Members have access to educational resources, annual symposiums, suppliers, and much more.
What is the growth potential for a waterpark?
While a majority of U.S. waterparks start out small, many entrepreneurs are now realizing the profit potential behind consistent park expansion. Those offering customers a well-rounded experience are able to attract visitors from all over the world. Over the last five years, park owners have expanded their business strategy to encompass international markets. Regions such as Asia are virtually untapped, while the demand is high. Assuming the park is well-managed and maintained, business owners have the potential to realize long-term growth and success, regardless of how modest or grandiose their vision for the park is.
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One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
What are some insider tips for jump starting a waterpark?
The following are some tips from successful waterpark owners:
- Cleanliness is paramount to your business’ success. Remember - first impressions can make or break you, so include the parking lot in your cleaning and maintenance plan.
- Provide ample parking and ensure your customers’ security at all times by having plenty of lighting.
- Don’t limit yourself to just water slides. Lazy rivers can be enjoyed by consumers of all ages.
- Offer a wide range of additional activities to draw in the individuals who need a break from the fun in the sun. Depending upon the specifics, you could experience seasonal fluctuations. Indoor activities will help ensure year round business.
- Invest in state of the art technology and continuously research to ensure you’re on the forefront of the latest trends.
- Build your park in an area that’s easily accessible and with high traffic areas to maximize public exposure.
- Work with a consultant who can help design a facility with overcrowding in mind.
- Hire an experienced management team.
How and when to build a team
Unlike other small businesses, you will not be able to operate the water park alone. Start the hiring process several months before opening day. Safety is your top priority; invest in your team by offering them quality training on safety standards, CPR, and standard operational practices. Since customers will often be children and teenagers, many parks strategically employ high school and college students, as they’re more easily relatable.
Your entire team will consist of several subsets, including:
- Trained medical staff to handle light emergencies
- Game attendants
- Water park hosts
- Special event hosts
- Ticketing clerks
- Vendors/servers - for food, drink, and novelty items
- Administrative staff
- Facilities management - a FM team can help ensure the facility runs efficiently and economically