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Planning and Developing a Nature Tourism Enterprise


Contents

Many have dreamed of owning a tourism business. In order to turn dreams into reality, it is vital to realize that most small businesses require careful analysis of both the business and the resources available. Developing a well-organized business plan is the first step.

Focus on providing an enjoyable
experience that also teaches.

Although you might have just had a life changing experience as a member of a guided wilderness tour, backpacking expedition, or deep sea fishing trip, you and your family may or may not be good matches for the knowledgeable, gracious and thoughtful hosts that are required for a successful nature experience. Providing a quality experience is the key!

Diversifying Farm and ranch income through Nature Tourism - An Overview


There is a growing interest among agricultural producers in diversifying farm and ranch income by providing wildlife-associated recreational opportunities. Many ranches in Texas already derive substantial income from hunting. Opportunities exist for attracting other segments of the recreation market, such as birders, wildlife watchers, hikers, mountain bikers or nature photographers, the so-called nature tourism business.

For example, ranchers with established hunting businesses might consider marketing non-consumptive activities such as birding or biking during the nonhunting season. This can fill empty lodging facilities and bring in off-season income. Opportunities also exist for landowners and entrepreneurs interested in developing tourism-related businesses such as B&B’s that specialize in birding and wildlife watching.

Hunting outfitters are an established part of wildlife associated recreation in Texas. With the growing interest in diversification among landowners, opportunities abound for the "new breed of outfitter" specializing in interpreting the natural and cultural resources of Texas for wildlife watchers, birders, photographers and those interested in history and culture.

Although opportunities exist to profit from the growing demand for outdoor recreation, it is important to be realistic about your assets, management ability, personal style and preferences, and how new endeavors integrate into your existing business. Nature tourism is not a cure-all to "save the ranch." It can diversify income, but those in the business will tell you that it takes commitment and vision. It is not for everyone.

Providing recreational opportunities is a people-oriented business. It’s not a business for you if you don’t enjoy dealing with people and providing services to your customers. The ability to enjoy the company of others, to share your experiences and knowledge with those of different backgrounds and to be flexible enough to adjust to people with personalities and tastes different from your own are important attributes for success in a "people business" such as nature tourism.

In developing a nature-based tourism enterprise, the first step is to inventory the natural and cultural resources that form the basis of what you are selling. Ask yourself these questions:

  1. What does your ranch have that is unique or different from others? (Think about plants, animals, geology, local history and ranching heritage.)
  2. What are your ranch's special habitats and how can you provide viewing opportunities? (Think about watering areas, wildlife gardens close to lodging, feeders, blinds, elevated observation areas, trails and boardwalks.)
  3. Get outside perspective-remember the common or ordinary to you may be of great interest to urban residents or visitors from other states and countries.

Nature tourists are looking for the natural, historical and cultural heart of the place they are visiting, and their defining principle is authenticity. They are interested in what is real, and they want to be immersed in a rich natural, cultural or historical experience. Good interpretation of the resources adds immensely to the learning experience and overall enjoyment. A satisfying experience that meets visitor expectations will generate repeat customers and positive word-of-mouth recommendations.

Once you have an adequate assessment of your natural and cultural resources, think about what activities you could offer that best fit with your current operation and interests. Start slow and focus on what you can do best based on your resource assessment and financial resources. Consider the preferences and abilities of other family members and employees. Be honest with yourself about your temperament, time, management ability and preferences for certain type of activities and people. Examples of activities offered on Texas ranches include:

For many agricultural landowners, marketing nature tourism activities is the most difficult part of starting a new business. It often is easier for people of the land to understand the resources themselves than how to sell the experiences of those resources to others. Marketing is vitally important, however, as the time and energy invested in researching and developing a business endeavor is wasted if potential customers are not aware of its existence. Although a full discussion of marketing is beyond the scope of this guide, here are some of the most important principles:

First, identify the market segment that you want to attract. Segmentation allows businesses to divide a homogenous market into smaller groups, see the diversity among customers and concentrate on pleasing a segment that might find their product or service attractive.

One of the most valuable things you can do in developing your business is to visit an existing business that has a product or market segment similar to the one you are considering. If you want to attract birders, visit an enterprise that offers birdwatching experiences or targets a particular segment of the birding market. Searching the Internet for birding-related websites provides contact information, as well as information on activities and pricing.

Networking with others involved in the tourism industry provides valuable information and contacts. In order to meet potential customers and make contact with others offering nature-based tourism opportunities, attend some birding and nature festivals. Develop a close relationship with your nearest Chamber of Commerce or CVB if you want to establish your business as a destination for travelers to your area.

Encourage partnerships between two or more businesses so that everyone benefits. Partnering allows small businesses to pool talent and resources to create a product that is more attractive than any one business can provide on its own. Tour packages are a good example. Cooperating with other landowners, lodging facilities and restaurants in your area attracts more visitors to your destination and encourages them to stay longer and spend more money.

Texans are blessed with an abundance of wildlife and natural beauty, and opportunities abound for sharing this natural heritage with fellow Texans and visitors from all over the world. For some landowners, diversifying agricultural income through nature-based tourism can be both enjoyable and profitable. For more information, contact Linda Campbell, Nature Tourism Coordinator, Wildlife Diversity Branch (512) 389-4396 or linda.campbell@tpwd.state.tx.us

Should You Start A Nature Tourism Business?


Check yourself out. Before beginning the pursuit of a tourism enterprise, you should ask yourself:

Most small businesses require
careful analysis and require a
well-organized business plan.

Are you:

  1. A self starter?
  2. Willing to take responsibility?
  3. Organized?
  4. Able to make decisions and carry them out?
  5. Able to solve problems?
  6. Independent/self confident and positive?
  7. Energetic and persistent?

Do you have experience in:

  1. Budgeting?
  2. Planning?
  3. Directing?
  4. Presenting? Selling?
  5. Communicating?
  6. Keeping financial records?

Your commitment:

  1. What priorities do you have in your life now?
  2. How much time do these take?
  3. How many hours per week will you devote to your business?

Your contacts:

  1. Who do you know and who do you need to know?
  2. Who are you first going to talk to about your business?
  3. Who do you know that can help you?
    1. An attorney
    2. An accountant
    3. A banker
    4. Others in a related business
    5. A member of the family or friend

If your response to most of the above questions is supportive and a positive YES!, you might prove to be a successful owner-operator of a nature-based business. But remember, small businesses have a high rate of failure. Only one out of ten small businesses continues to operate after five years. Be sure to develop vital financial and business management skills. Planning, patience and persistence are key components for sustaining a nature business.

Meet Experienced Nature Enterprise Practitioners


One of the first things you should do is seek out and analyze those who are operating nature enterprises. Visit enterprises similar to your interests. A good way to analyze a nature tourism product is to experience one. Book yourself with a successful business similar to what you are interested in developing and see what it does. Obtain as much insight into similar small businesses as possible. For instance:

It is far more effective and
less costly to learn from
the experiences of others.

Eight Steps Toward Starting A Nature Tourism Business


STEP 1: Assessment

Before going any further, ask yourself, where am I now and where do I want to be? You must consider how the business can contribute to your goals for yourself and your family... and analyze your current ability and situation.

STEP 2: Customer experience

Plan your enterprise in a way that the customer, the natural environment, your skills/resources will be optimally matched. Consider how well your service will meet the potential customer's needs and what image you will project. Be sure to consider the following:

STEP 3: Service concept

In defining your service concept remember to ask: What product or goods and services will the customer be buying? What are the benefits they seek? In your case, is it the convenience of a guided nature experience? Your skills? Your knowledge? Your assistance? Although they may first recognize your advertising, the facility, you or your guide, they are SEEKING BENEFITS. They are seeking a quality experience that includes important NATURE BENEFITS such as adventure, friendship, excitement and a connection and understanding of their natural surroundings. Be sure to put your service concept down on paper... and ask yourself:

What product or goods and
services will the customer be buying?
And what are the benefits that
they seek?

...And BE CREATIVE!!

STEP 4: Business plan

The single most important action in your enterprise is the business plan. Do a formal written business plan that you can take to a banker. Many business dreams with great potential fail because they were not logically planned. A business plan is the framework upon which you plan to develop your business. In your business plan you must address several key questions:

COMPONENTS FOUND IN
MOST BUSINESS PLANS
  • Executive Summary
  • The Business
  • Product/Service Description
  • Market Research/Analysis
  • The Marketing Plan
  • Operations
  • Financial Data
  • Investment Required
  • Appendices

There are many formats to follow in writing a business plan, including some computer programs that will simplify the writing task.

A business plan helps you focus and organize on paper the reasons why you are in business, what your market is, what your strengths and weaknesses are, what your financial projections are like and what your management environment is. The plan will help you make insightful business decisions and inform potential lenders about your business. Seek help from small business development practitioners. The network of Small Business Development Centers across Texas as well as SCORE (Senior Corps of Retired Executives) chapters can provide you with business plan assistance. (See: "Further Reading" for business plan guidance.)

One excellent resource is the publication entitled Building An Agribusiness or Small Business Plan produced by the Texas Department of Agriculture (TDAM537, 9/00). This publication includes helpful business plan and finance worksheets. It is available free from TDA by calling (877) 428-7848 or through the TDA Web site at www.agr.state.tx.us (rural economic development, publication links).

The Texas Agricultural Finance Authority, a public authority within the Texas Department of Agriculture (TDA), offers several financial assistance programs that work through eligible lending institutions. The programs can be reviewed at http://www.agr.state.tx.us/eco/ finance_ag_development.

Specifically, the following programs offer assistance for rural economic development projects:

For more information and applications for the various financial assistance programs, go to the TDA Web site or call (877) 428-7848 or (512) 475-1619.

STEP 5: Identify expenses

Whether you are beginning a new business or diversifying an existing business, you will face start-up costs and operating expenses. These should be considered carefully and included in your financial analysis.

  1. Start-up costs. A basic first step in determining your start-up cost is to make a list of all the expenses that you can anticipate incurring before you can open your door to clientele. Review your cost list with knowledgeable operators in the tourism industry and be sure to consult your accountant, banker or financial backer.
  2. Operating expenses. Operating expenses will begin before you open your business (for example, marketing and advertising will be necessary before the grand opening). Expenses will vary seasonally and will be greatly influenced by the number and diversity of clientele.
Examples of expenses may include:

STEP 6: Insurance

Discuss insurance needs with people currently in a related business and with insurance professionals and financial planners to determine needs for your type of business. Do comparative shopping and be sure you have sufficient protection and coverage. Insurance should cover:


In 1995, the Texas Legislature offered landowners limited liability protection by adding Chapter 75 to the Texas Civil Practices and Remedies Code. The statute altered common law rules that placed all visitors on land in one of four legal classifications. A landowner's responsibility for the safety of visitors to their property varies depending on a visitor's legal classification. The four categories, which start from the highest degree of care owed to each group, are:

  1. Invitee
  2. Licensee
  3. Trespasser
  4. Child under the attractive nuisance doctrine

In its current amended form, Chapter 75 classifies recreational guests on agricultural land as "trespassers" if there is no entry charge or if annual charges for entry during the current year do not exceed four times the property taxes on the agricultural land during the preceding year. For example, if a landowner pays $1,000 a year in property taxes, but only charges $3,500 annually in recreational fees, the landowner's liability is limited under Chapter 75.

Landowners are not totally absolved of liability even though recreational guests are viewed as trespassers under the statute. Landowners must refrain from willfully or wantonly injuring recreational guests. Likewise, landowners remain liable if the recreational guests are injured through gross negligence or acts conducted with malicious intent or in bad faith.

For those charging recreational guests more than four times their agricultural property taxes, landowners do not owe recreational guests a greater duty than that owed to trespassers if they maintain the following minimum amounts of liability insurance on their property:

  1. $500,000 for each person; and
  2. $1 million for each single occurrence of bodily injury or death; and
  3. $100,000 for each single occurrence for injury to or destruction of property.

Landowners who charge their recreational guests less than four times their property taxes may still want to consider buying the minimum amount of liability insurance, if it is economically feasible, to benefit from legal representation provided by an insurance company in case of a lawsuit.

Consider including statements of liability on your printed materials or contracts but be sure to have them reviewed by an attorney first. For more information on liability protection for landowners involved in wildlife-related recreation, consult the Real Estate Center at Texas A&M University at http://recenter.tamu.edu/pubs.

STEP 7: Taxes

Taxes for small businesses are somewhat more complicated than for regular wage-earners. The form of business organization you choose (sole proprietor, partnership or corporation) affects your tax reporting requirements. Consideration should be given to:

When developing your business be sure to consult a professional accountant familiar with small businesses to help you understand your legal obligations and to develop a tax plan that best suits your operation. The Internal Revenue Service offers frequent workshops for new business owners on taxes and record-keeping requirements. Be sure to check with the Small Business Administration. Specifically, consider obtaining the following publications:

From the Small Business Administration:

From the Texas Agricultural Extension Service:

From the IRS (www.irs.gov/formspubs/):

And if your enterprise is a 501(c)(3) initiative, you should consult IRS publications 557 and 598 or go to IRS Web site at www.irs.gov (Charities and Non-Profits).

STEP 8: Regulatory requirements

Early in your planning process, review your federal, state and local regulations. Although regulation requirements pertaining to your operations may be local, requirements pertaining to the operations of vehicles (bus, boat) may be both state and federal. Operation in some environmentally sensitive areas might require both federal and state permits.

Of particular importance is safety. In many situations there are specific requirements for communications, first aid, fire protection and personal gear such as life preservers. It is critical that employees are certified in first aid and lifesaving. The Red Cross is an excellent resource. Also, consider consulting with U.S. Coast Guard officials and the Texas Parks and Wildlife Department concerning water and boating safety.

Basic considerations and requirements include the following:


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