PUBLISHED: 05:21 01 December 2014
Tourism is Norfolk's single most important business sector, supporting more than 54,000 jobs and contributing approaching £2.8 billion to the local economy, according to Visit Norfolk.
While that covers a host of different businesses, from hotels to attractions, the type of accommodation which makes up the largest portion of the market is holiday parks. By its nature, this is an investment-heavy enterprise, and also one which is often a family-run business – so inevitably it becomes one where the personal finance element overlaps with the “pure” business decisions.
So why I am writing about tourism just as many of our county’s holiday parks are shutting up shop for the winter? In fact, it is during this “down time” that most investment decisions are made, so the next few months are important for those running holiday parks businesses, as well as those investing in them. Investing in a successful holiday park requires a wide range of skills, and whether you come at it from an agricultural background (as many do), with experience of running a tourism business, or as an investor, you will face a plethora of issues you’ll need to resolve in order to prosper. One of the most common of these is the particular challenge of running a family business, as many of our county’s holiday parks are indeed family businesses, often emerging from family farm concerns.
In many ways, family businesses are great structures to build a business of this type, offering mutual support and the ability to plan for the long term. But they do add another factor to be taken into account when taking decisions within the business: The personal finances of family members who are reliant on their livelihoods on its success. A common issue is succession planning. This is not just a question of ensuring that the next generation can take over the business seamlessly when the time comes. Often the current generation’s retirement income is tied up in the continued prosperity of the holiday park. In effect, it becomes both a business and a pension plan. It is important to recognise this when planning for the future. The retiring generation needs to be able to take out of the business what they require in a way which the business can afford.
Many forms of self-employment will offer irregular income across the year, and nowhere is this more true than in the tourism sector. For those relying on this kind of business for their livelihood, good planning is again essential – whether it’s cash-flow management and robust, accurate accounting systems within the business, or personal financial planning on the part of those investing in it.
While many are drawn to the holiday parks sector because of the people aspect and the enjoyment of providing something which customers happily purchase, there are particular financial skills which are vital in order to make a success of it.
Tourism is a thriving, dynamic sector which is particularly strong in Norfolk, so it is an attractive investment – and the holiday parks sector is a growing part of that opportunity. But like any investment, you need to go into it with your eyes open, and with the benefit of good, specialist advice.
Lovewell Blake has recently created a specialist holiday parks team to offer expert advice to individuals, families and companies investing in and running holiday parks businesses; www.lovewell-blake.co.uk/specialisms/holiday-parks