It's important that businesses in the tourist park industry have access to a wide range of supporting information. What's the value in planning ahead?
It's important for tourist park businesses to have strong reporting requirements when it comes to managing their financial performance. The seasonal shifts in the cash flow forecasts, combined with a diverse target audience, makes for a challenging environment for owners to manage.
Business owners in the industry also need to be aware of much more than just their internal performance. In such a competitive market, it's essential to know where the benchmarks are, and how your operations compare to other players.
It is this combination of internal review and overall market awareness that makes a successful business, and the services of trusted advisers can make the process much easier to manage.
Answering questions before they are even asked
One area in particular that BDO has noticed is ripe for improvement in the tourist park industry is budgeting. While the industry as a whole is home to a significant proportion of veteran business owners, who are well aware of what it takes to succeed in the industry, there's still not enough formal budgeting taking place.
Having a proper budget mapped out allows tourist park owners to plan out future business decisions and find answers to questions they may have about their ongoing strategy. It also means they will be able to better plan where they will be spending money in the coming months or years while also developing a greater awareness of how much revenue they can expect to generate.
One of the most valuable parts of budgeting is not he output, but the granular level of business intelligence obtained by going through your financial data line by line.
The value of industry benchmarking
It's easy for business owners in any industry to focus heavily on the internal operations of their organisation and forget about what their competitors are up to. While this dedication to internal improvement is still important, it's essential they are able to balance this with a knowledge of the wider industry.
The first step is to measure your business performance against that of other major players in the industry, as this will provide an idea of where you fit in and who the closest rivals are. However, analysing the similarities and differences between a business and other organisations within the industry is just a part of this process. For benchmarking to be at its most effective, tourist park owners need to investigate what the drivers of these differences may be.
Some of these drivers will be easily understandable, and may be something business owners are already trying to achieve. If there are some points of difference that come as a surprise, then it could be time to take a deeper look at what an organisation is trying to achieve and how it can evolve in the future. With a budget in place, tourist parks will have an even stronger idea of how much they can spend in combating the competition (which may not necessarily be the park down the road).
The key for business owners is to prioritise tackling the biggest differences between them and the competition. While this may seem daunting at first, overcoming it will let businesses catch up in great strides rather than incremental upgrades. By working all the way down to the small changes, tourist parks will have a significantly refined business model that will assist them in competing with similar companies in the industry.
How to manage internal performance
To balance external benchmarking and operational effectiveness, tourist park owners need to ensure they have methods in place to measure their own performance. Essentially, they need to have as deep an understanding of their own offering as possible and create goals and aspirations accordingly. These might include increases in gross profit, occupancy percentages or revenue per booking, among other things.
In these cases, tourist park owners can focus on areas of improvement they've identified during the benchmarking process and use them to create measurable key performance indicators (KPIs). It's also important business owners don't overwhelm themselves with too many KPIs. Limiting these to five or six really important goals can make them much more achievable and ensure the results are being measured and acted upon.
These KPIs should reflect functions that are vital to business operation, so owners have consistent feedback on how the business is performing. However, it's up to them to ensure these are consistently monitored. If owners simply set and forget, they won't do their job and could limit the business's ability to succeed. In some cases, this will demand investment in digital solutions as well. If owners have to spend hours pulling data from spreadsheets to find answers, the monitoring process quickly becomes inefficient and may put people off doing it regularly.
BDO can work with tourist parks to help them understand the wider market conditions and how these can impact the way their business operates. By planning ahead and accessing important industry benchmarks, tourist parks can prepare for greater success.