Small Business

Hello Muddah, Hello Fadduh!


It's a century-old business made up mostly of mom-and-pop operations handed down from one generation to the next. It attracted a record 6.2 million customers last year and is expected to surpass that record this year, even as prices climb.

Welcome to summer camp.

Because many parents see them as a necessity rather than a luxury, and also because they are attracting children from a bigger age range and a wider geographic reach, camps are fairly recession-proof. Most of the 8,000 sleepaway camps and 2,000 day camps in the U.S. are full each summer, says Jeffrey Solomon, executive director of the National Camping Assn., a referral service.

FOUR SEASONS OF WORK. In this atmosphere, camp owners can make a pretty good living. "Overall, it affords you a good income, a nice lifestyle -- and you're doing something that is really worthwhile," says Jesse Scherer, second-generation owner of Camp Eagle Hill in Columbia County, N.Y. "But camp owners really work 12 months out of the year," he says. Hiring staff and marketing to parents take up large chunks of the off-season, as does camp maintenance and renovation.

At Camp Wekeela in Canton, Maine, one employee's year-round job is recruiting staff. More than 100 administrators and counselors are needed for the 325 kids between 6 and 16, says owner Eric Scoblionko. He does much of the marketing himself, a big job because "for every [interested] person who comes, seven don't."

"Most people looking from the outside don't have any idea how much work it is," says Scoblionko, who has a master's degree in education. Even though he and his family live in Ohio during the school year, in the summer, they all move to his camp in Maine, the geographic cr?e de la cr?e of summer camping.

SOFT LIVING. At Wekeela, as at many sleepaway camps, kids are not roughing it. "They're not going to take a rugged camp with no electricity, no toilet, sleeping in tents," he says. Cabins are no longer barracks, they're well-designed homes with finished furniture and full bathrooms. Dining halls are no longer limited to hot dogs, hamburgers, and spaghetti. They have salad bars, vegetarian stations, make-your-own-sundae setups. "It's unbelievable what these kids want -- and demand," says Scoblionko, who charges more than $7,000 for an eight-week season, slightly above average for a private sleepaway camp. That doesn't mean the kids who come to Camp Wekeela are "spoiled brats who want to just sit and polish their nails," he says. It's just that they look upon camp as their summer home.

The demands and the responsibility are huge, which is why summer camp is a business for people who have an abiding interest -- they are often former teachers or coaches -- in children's welfare. "When kids come to our camp for a couple of years, we practically take credit for having raised them," says Scherer. "That's what my father used to say -- they are attaching themselves to our values and what we believe in."

It follows then, that parents prefer a camp with a track record -- and it's also why family-owned camps remain the norm (70% of the total). It's one of the reasons Hal Lyons, after working in summer camps for years, bought Camp Chateaugay in the Adirondacks rather than establish his own. "People who start from scratch usually have much deeper pockets. They have to be willing to go through many years of losses, rather than just one year, as we did," said Lyons, who purchased the 50-acre camp in 1989.

FOR ALL TASTES. Most of the growth in camp attendance -- 20% since 1990 -- has been in specialty sleepaway camps. The specialty camps have a narrower focus -- say tennis, golf, or computer skills -- than do general camps, which offer a broad range of athletic and outdoor activities, as well as some arts and crafts. Given their narrower focus, the specialty camps have a more limited appeal, and a higher mortality rate than traditional camps.

"We get a lot of people who call and they want to purchase a camp," says Solomon of the National Camping Assn. "The credentials they offer are: 'When I was a kid, I really liked camp.'" Rosy memories, however, are not enough, he cautions. "Parents of children are consumers who are really going to keep you under a magnifying glass," he says, adding: "Frankly, it's a tough business."

Successful camp owners are people who not only love children and the outdoors, but are good marketers, administrators, and staff recruiters -- there's 50% to 60% annual attrition among the college students and teachers who make up much of the camps' summer workforce.

Those teachers and counselors are key. "The facilities themselves don't do it," says Scherer. "The bottom line is going to be about the relationships the kids develop with staff members and other children." At the top camps, the camper-to-staff ratio can be as low as 2.5 to 1.

MILLION-DOLLAR PLAYGROUNDS. At most camps, payroll is the biggest expense, accounting for up to 20 percent of total overhead, closely followed by food. Then comes mortgage costs and capital improvements. Most outsiders think insurance (property and liability) would be higher on the expense list than it is (roughly 3% to 5%), says Scoblionko, but the short amount of time the facilities are actually occupied helps keeps that cost down. Depending on the geographic reach of the camp, marketing can be a big expense because, although camping is more popular than ever, so is comparison-shopping. Most camp owners have profit margins of about 10%, says George Coleman, who, with his wife Marla, have run Coleman Country Day Camp in Merrick, N.Y., for 19 years.

At high-end camps, the facilities can be worth $20 million, says Coleman, who often makes presentations on the business of owning and running a summer camp to prospective newcomers. The average sleepaway camp, with 100 to 200 acres, would cost anywhere from $800,000 to $5 million to build from scratch, depending upon location, he estimates. Although costs vary widely, the average camp without a mortgage or rent to pay will cost roughly $1 million a year to operate, says the National Camping Assn.

Although it's almost impossible to start a camp business with no experience, it is possible to start with no money, says Coleman. It's not unheard of for people who've worked at camps to approach longtime owners who are ready to sell and offer to trade sweat for equity.

SOLID PROSPECTS. The growth of summer camping is expected to remain strong. Dual-career or single-parent households will continue to need adequate care for their children. Achievement-oriented households see specialty camps as a way for their child to remain competitive on the soccer team or in the college-admissions sweepstakes. Other households try to give their child a less competitive off-season when the academic year has ended.

Thanks to the Internet, camps are drawing up to 20 percent of their clients from Europe, South America, and Asia. Foreign children want what is almost a uniquely American experience (there are few summer camps outside the U.S.), and many American families are eager to have their children exposed to other cultures.

In this climate, Scoblionko, who has run a summer camp for 20 years, declares he'll do it "for another 50" and would be happy to see his four children, ages 8 to 16, eventually join the business. Given the grip that mom-and-pop operations have on this business niche, the young Scoblionkos are likely to have that option. Theresa Forsman in New York


We Almost Lost the Nasdaq
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus