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| Listing #1 - Canoeing Resort Details & Definitions
1. Spring River Area Outdoor Recreation Spring River Area Recreation Market - Each year some 350,000 tourists visit the Spring River area, mostly to enjoy canoeing and fishing on the region's rivers. Whether fishing, floating, or both, tourists generally stay two nights, and frequently as long as a week. Weekends are busier than weekdays, especially in low season. RV travel, tent camping, and staying in cabins are all in demand, with most visitors preferring riverside locations. Campgrounds usually offer a combination of primitive camp sites, RV sites, camp sites with electrical outlets, and some type of cabin lodging. On busy holidays additional primitive camp sites without picnic tables or grills are offered at reduced rates. Bath houses with toilets also offer a place for campers to shower and to launder clothes. Most tourists want camp sites and cabins offering on site swimming, fishing, and supplies in an onsite store, which also usually serves as the operation office. Watercraft rentals for floating rivers includes canoes, rafts, kayaks, and tubes. When their float trip is over most tourists want a good meal and simple evening entertainment. Several local restaurants are popular, and cooking meals at the camp site or in cabins is also popular. When their meal is over guests socialize around a campfire, in their cabins or on cabin decks. In addition to fishing and floating the rivers, tourists drive to area attractions like Blanchard Springs Caverns and the Ozark Folk Center, both 60 minutes away. Mammoth Spring State Park and Trout Hatchery are 20 minutes away. They also shop in Old Hardy Town, which is a walk-and-shop district of some 35-plus shops offering antiques, crafts, collectibles, art, and specialty items like soaps, scented candles, etc. Horseback riding, golf, turkey and deer hunting, scenic drives, and just plain relaxing are all popular tourist activities here. Market Draw - A substantial portion of the repeat
and new customer business comes from these cities: A large number of guests also come from rural and small town areas of northern Arkansas and southern Missouri. Most of the walk-in customers are locals who have driven an hour or less to float or fish, and do not stay overnight. Demographics - Floaters are of all ages and economic backgrounds. However, the majority of floaters tend to be in the 20 to 30 year old age range. There are also a large number of people in their 40's and 50's. Most floaters, but certainly not all, tend to be from lower to middle income households. Floating is very popular with college students. Southfork Resort works hard to attract families, church and boy scout groups, and others who prefer a quiet, relaxed, non-party atmosphere. There are families who have all they can to to afford one night's lodging and a float trip. Others show up in $50,000 RVs. 2. The Rivers About The Rivers - In the Spring River area are three rivers which attract outdoor recreation tourism. The Spring River, the South Fork of the Spring River, and Myatt Creek. Two factors make these rivers attractive to tourists. First is that these waterways remain in pristine condition. They appear mostly as they did 200 years ago when the white man first explored and settled here. The river bottoms, clearly visible in many spots, give tourists a close-up look at unique bed rock formations. Layered limestone bluffs line the banks in many locations. Dense hardwood forests, meadows, and glade rock flats are also common. These scenic spots are numerous and are what most come to the area to experience. The second draw is that the Spring River has 30 sets of class 1, class 2, and class 3 rapids in a 10 mile stretch which challenges even experienced canoers. Just as important are the easy to float, calmer water stretches of the South Fork of the Spring River. Not all floaters want a heart-pounding rush through white water rapids. Trips of varying lengths and difficulty are arranged by canoe and float trip outfitters. Also important is that the Spring River flows at a nearly constant rate all year, and therefore water levels are predictable, an unusual occurrence in the Ozarks. Various trips on the South Fork of the Spring River are usually available year around. Some trips on certain stretches of the South Fork may be excluded during low water. Myatt Creek depends on regular and adequate rainfall to be floatable, and these periods are typically in the spring and fall months. All float service operators have some type of shuttle service from float end points back to the point of beginning. School buses and passenger vans pull canoe trailers to transport both watercraft and people from point to point. Floating - River floating is the main tourism activity, with fishing and camping as close seconds. "Floating" is the term used for running downstream in canoes, kayaks, tubes, and rafts. Southfork Resort offers float trips on the Spring River and the South Fork of the Spring River. The length of float trips varies from short trips of a few miles up to about 22 miles. A trip may take only a few hours, or all day. Overnight trips are not common, but each year a few fishermen take overnight trips. Tubes are used for short trips, canoes and kayaks for any of the trips, and rafts are for small groups who wish to float together in the same watercraft. Families, church and other groups, friends, and individuals make float trips. While floating, people stop to swim, picnic, relax, and fish. River Levels - One of the problems with most Ozark float streams is that water levels drop in the summer and fall. However, since Mammoth Spring flows at a steady 9 to10 million gallons per hour all year, water levels in the Spring River stay relatively constant. During the summer the Spring River is very busy, even crowded. While many people enjoy floating only in hot weather so they can swim and get wet without getting cold, a great many also enjoy canoeing and kayaking in the spring and fall months when wildlife is more visible, the rivers are less crowded, and the fishing is better. The South Fork of the Spring River starts running too low for floating in late July. If rains are frequent then it runs adequately into late August. If the South Fork runs low, then the Spring River is not far away. A large percentage of guests staying at Southfork Resort float the Spring River by choice, even when the South Fork is running at good float levels. It is the white water action of the Spring that attracts people. However, those who prefer a slower float choose the South Fork. When water levels drop, canoes and sit-inside kayaks (as opposed to sit-on-top kayaks) become the watercraft of choice for fishing and float trips. Tubes, rafts, and sit-on-top kayaks are best for medium or high water levels. Floods - Make no mistake about it, the South Fork of the Spring River does flood. When it does the riverfront lawn becomes a mess. Rocks, sand, limbs, and other flood debris collects. Large holes can also wash out. If the water gets high enough the camping sites can also become flooded. Fortunately none of the buildings are in the 100 year flood plain. While the riverfront lawns and camping sites have been flooded three times over the last 25 years, none of the buildings got wet. Cleaning up flood debris is not expensive, but it is time-consuming. Once the debris is cleared any holes need to be filled. Some of the rocks and larger tree trunks in the flood debris can be used to fill holes. Normally the highway department needs places to dump rocks and sand they clean off flooded highways, and will usually welcome a place to unload their debris, and will fill holes quickly. While frustrating, floods have not cause long-term damage at Southfork. Flood Warnings - It is a very good idea to keep an eye on weather reports. It is also a good idea to use a NOAA weather alert radio ($30). Due to the relief of the terrain the South Fork flows through, flash flooding has never been a problem. The flood level rises slowly enough to allow advanced notice to campers without concern. 3. Location GPS - Copy and Paste these GPS coordinates in
Google Maps to see the exact location: Map Location - The resort is on the map very near Saddle, Arkansas, which is about 10 miles south of the Missouri/Arkansas state line. The exact spot on the map is where Arkansas State Highway 289 crosses the South Fork of the Spring River. The property is on the east side of the South Fork of the Spring River. County - Southfork Resort is located in Fulton County, Arkansas. The Fulton County line zig-zags through the area bordering Sharp County, Arkansas. As you drive the area you will see several signs for both counties. The combined population of Fulton County and neighboring Sharp County is approximately 17,000 persons. Highways - Highway 289, which crosses the property, is a paved road in good condition that runs between Arkansas State Highway 62/412 and Arkansas State Highway 9 in Mammoth Spring. Highway 62/412 is the most traveled highway in northern Arkansas. Mammoth Spring State Park is a popular destination, so Highway 289 is a popular tourist destination route. Southfork Resort is the only lodging and floating operator on Highway 289. This is because the river crosses the highway in just one spot. Major east-west highways include Arkansas Highway 62/412 10 miles to the south, Missouri Highway 160 40 miles to the north. Highway 63 is the north-south highway connecting the two east-west highways. Geographical Location - Southfork is at the geographical eastern-central edge of the Ozark Mountain Plateau, just outside the western edge of the Hardy/Cherokee Village area of north-central Arkansas. The terrain tends to be flat or gently rolling hills which rarely exceed 800 feet above sea level. It is rich in wildlife, not heavily populated, and has several scenic rivers, lakes, and hill areas. 4. Communities Close By Small Towns - Six small towns are within a 10 to 20 minute drive from the property. The closest is Cherokee Village Arkansas, population about 4,800 people. Also about 10 minutes away are Highland, Arkansas, population about 1,100 people, and Ash Flat, Arkansas, (county seat for Sharp County) also about 1,100 people. Some 20 to 30 minutes away are Hardy, Arkansas, population 600, Mammoth Spring, Arkansas, population 1,095, and Thayer, Missouri, population 2,164. Salem, Arkansas, population 1,600 is 20 minutes away and is the seat for Fulton County. Horseshoe Bend, Arkansas, population about 2,230 is 20 minutes away. Larger Towns - An hour away are Mountain Home, Arkansas, population 13,500, West Plains, Missouri, population 12,500, and Mountain View, Arkansas, population 3,100. Cities - The closest cities are: 1.) Jonesboro, Arkansas, 1.5 hours away, population 66,200; 2.) Memphis Tennessee, 2.5 hours away, population 676,640; 3.) Little Rock, Arkansas area, about 3 hours away, population 610,518; 4.) Springfield, Missouri, about 3 hours away, population 157,630. Time To Drive To Major Metro Areas: 5. Area Civil Amenities & Attractions Retail & Services - Within 10 to 15 minutes of Southfork are the civil amenities needed for a good basic lifestyle. Stores, restaurants, medical services, fire stations, churches, banks, movies, golf courses, and schools are all available 10 to 20 minutes away. The town of Highland is the school district, and the school bus stops at the resort. The population of some 17,000 residents of Sharp and Fulton Counties is mainly retirees living on fixed incomes. As a result the area tends to be economical, clean, and has a low crime rate. Both counties are mostly rural with a few small towns. Airports - Major commercial airline services are available in Springfield, MO; Little Rock, AR; and Memphis, TN. All three airports are about 3 hours from the property. Smaller regional airports are found in Mountain Home, Mountain View, Jonesboro, Salem, West Plains, and Ash Flat. Commuter flight services are available only in Jonesboro at the Jonesboro Municipal Airport. From here you can fly to Little Rock or Memphis airports to pick up major airline flights. Ozarka College - Ozarka College operates as a two-year public post-secondary institution offering associate level degrees and technical certificates as well as basic adult education and workplace skills training. Law enforcement, automotive services, culinary arts, childhood development, nursing, applied sciences and technology, arts and humanities are some of the programs offered. Ozarka also has partnerships with other universities for completing four year degrees. The Ozarka campus at Ash Flat is 15 minutes from the property. Mammoth Spring State Park - This attraction is 14 miles away. Mammoth is the tenth largest spring in the world with an average hourly water flow of 9.78 million gallons. The State Park is a popular attraction and draws people from all over America. The spring is the headwater source for the Spring River. The clear water has a constant temperature of 58 degrees Fahrenheit, which makes it an excellent habitat for trout, and the aquatic life trout feed upon. As the water flows downstream it warms up resulting in a river offering both cold and warm water fishing. Old Hardy Town, a walk-and-shop district of some 35 shops, restaurants, and arts and craft stores, has tourist activities every weekend from March through the Christmas shopping season. It is the type of attraction which people visit repeatedly as it changes on a regular basis. (This agent and his wife love shopping in Old Hardy!) 6. Business Operation Advertising - The unique selling propositions are "Come Paddle at Saddle" and "Southfork Resort - The Family Place" are the slogans the owners use to drive home two important points. "Come Paddle at Saddle" attracts attention that canoeing is available in Saddle because there are no other canoe outfitters in the Saddle area. As the Spring River becomes more popular, many tourists seek less crowded float trips, which can be found on the South Fork of the Spring River. "The Family Place" is an important slogan because many of the canoe outfitters on the Spring River area cater to college students who drink and party in the campgrounds. Southfork Resort prefers not to attract the Girls Gone Wild crowd, and therefore promotes a family image instead. This works because many families and others prefer a campground with a noise curfew which results in a quieter atmosphere. Competition - Five other competing canoeing and campground operate in the Spring River area. Unlike many of these operations, the Southfork Resort property has no train tracks nearby. On most of the other properties freight trains rattle and clank by, sometimes several trains per day - and night. The demand for canoeing and camping is high enough that competition is more of a help than a hindrance. This is because several operators all promoting the area attract more business to the area than if just one or two operations existed. The market supports all of the operators, indeed there tends to be more demand than supply on busy summer weekends. Southfork Resort tends to be more spacious, less crowded, and more peaceful than other area operations. The way to stay ahead of the competition is to take advantage of modern technologies. It also helps to continue with the old standards like billboards, rack cards, and well-placed print ads. Competing outfitters (except one) only offer float trips on the Spring River. These competitors refer fishermen, and others who do not wish to run the class 3 rapids of the Spring River to Southfork. Income - It is important to understand that personal income from a small resort is counted differently than taking home a paycheck. With the paycheck taxes and other deductions are taken out of gross pay. From there the paycheck must cover a long list of personal expenses. The paycheck one gets from a small resort is what is left after the loan payment, utilities, and many other living and operational expenses are already paid. When we read that the average household income in America is about $50,000, that is gross pay. When owners of a small resort net $50,000, that is net profit before personal tax. Thus the person getting a check for $50,000 a year from a small resort will pocket considerably more than the household having a gross pay of $50,000. Equipment & Tools Needed - The sale will not include the transfer of certain power equipment and tools. The current owners have a small tractor used for a long list of tasks, and they also have a quad side-by-side. The tractor has several implements used for maintaining driveways, mowing, and hauling. The side-by-side also serves several functions, but is mainly used for getting around quickly with various supplies. Neither of these, or their implements, are included in the sales price. Also needed will be a chainsaw or two, a couple of grass trimmers, and a long list of hand and power tools. A riding mower is also a necessity. 7. Risks Guest Safety - During off season months is the time for risk reduction planning. Talk to the property insurance agent, fire officials, law enforcement officials, and medical experts - many of whom are 15 minutes away at Ozarka College. Learn when to call for medical help, and/or law enforcement. Learn where the legal line is for your being directly involved in serious emergencies, such as heat stroke, heart attack, someone drowning, or a cabin fire. Rely on experts for learning what equipment to have on hand, and what steps to take to render aid without causing yourself legal problems. Low Demand - The market for float trips and lodging is strong in the area, and has been for many years. The number of floaters increases each year. It is not likely failure would result from poor market demand. As has been mentioned, even in the hardest recession since the Great Depression, sales went up, not down, every year of the recession. Extreme Weather can be a threat, but the property has already withstood two serious floods. The ice storm, which covered many states besides Arkansas, is a highly unusual event. Still, the resort survived the ice event, and in the end, benefited from it. Earthquake - The New Madrid fault zone, 80 miles to the east, has produced some of the strongest earthquakes in America since such events have been recorded. The famous quakes of 1811 and 1812 shook furniture in Washington DC, and knocked plaster off walls in Columbia, South Carolina 1,800 miles away. On average one earthquake per year is large enough to be felt in the New Madrid, Missouri area, but few are felt at Southfork. If the predicted "big one" hits, no doubt it will be felt at Southfork, but damage is not likely. Government - As I write this in August of 2010, American Corporations have nearly $2 trillion in cash savings. They are afraid to spend it. All across America small businesses are afraid to hire or expand. Both large and small businesses fear the new regulations and taxes under consideration by both Federal and State governments. However, upon close examination of the proposed new regulations and taxation, it becomes clear that owning a small resort is one of the best places to be. Due to the very nature of how a small resort operates, it has legal tax advantages, even under the new proposals. However, no matter how efficient a small resort operates, new programs, like Cap and Trade, or even a VAT tax, will cause expenses to rise. This will force a price increase across the board for all resort operations. At the same time American income earner wages and salaries will not increase. This could cause a drop in demand. On the other hand, it will be operations like Southfork which best survive a drop of recreation spending because of its affordability. Poor Management - Over the years I have seen several small resorts go under. In most cases it was due to mis-management of some type. And in those cases of mis-management, it is usually the owner's ego that gets in the way. Entrepreneurs have to be stubborn, they have to be egotistical. Yet this most valuable asset can also be a downfall. The key is keeping an open mind and doing one's market research. Oddly enough, the most common cause of small resort failure is also the easiest to see and correct! Law Suits - Fortunately small resort operations rarely get sued. To begin with there is little to sue over. What few law suits there have been resulted from someone dying, in most cases drowning. When the facts come out, in almost all cases the suit was lost because the dead person had been drinking. Personally I know of only two law suits over the last 20 years. With some 2 million people visiting northern Arkansas every year, and with those people participating heavily in outdoor recreation, that is saying a lot. Killing Repeat Business - All small resort owners know that they cannot survive long term without repeat business. Consumers can be fickle, demanding, and unreasonable. Fortunately, most are not. Sometimes you have to grit your teeth and stay pleasant. Most of the time however, what is necessary is taking very good care of your guests, as best as you can. Be fair. Enforce your policies, stay firm, but explain why you do what you do. Most will understand. Honesty still counts for a great deal in this area. But it must be more than words. Action speaks louder than words. If you do not keep your rooms clean, your equipment clean and repaired, your furnishings clean, then your words are hollow. Your guests will see this. There is nothing wrong with "old" as long as it works, and is clean. You can use furniture made in the 1960's. You can use cookware you bought at the second hand store. Just make sure it is clean, and in good working order. When it comes to keeping repeat business, just live by the Golden Rule. There will always be a few jerks. Don't waste time with them. If need be call the sheriff and have them removed from the property. If you have been fair and honest, it will not take the deputy long to solve the problem. The rest of your guests will recognize, and respond positively, to your actions. Unseen Problems - More than one new resort owner has discovered shortly after day of sale that their sheets, furniture, and furnishings are old and broken. Having to replace appliances and other furnishings quickly becomes expensive. However, with proper due diligence, this problem can be avoided. The same holds true for the physical condition of the buildings, roads, plumbing, etc. There is the right way to conduct inspections, and there are several wrong ways. A good inspection will find almost all problems. Yet from time-to-time a sewer system, or some other unknown, or unseen problem can happen. When it does, you have no choice but to pay for the repair. This is why it is wise to set money aside for a rainy day fund. 8. Property Condition Cabin Furnishings - The appliances, furnishings, and fixtures in the cabins are in good usable condition. They are not fancy. They are not all new. They are clean, and they are all working. Some show signs of wear. However, the final measure is that guests are not complaining. Would they if they did not like something? Count on it! One important key to profit generation is not spending any more than absolutely necessary. For the price paid guests have an expectation level. Meet that level. Buy used items, or buy them new on sale. But buy only what you need to meet that expectation level. That is what Southfork has successfully done. Building Conditions - The owner's home, the pavilion, the Deluxe River Cabin, the River Home, and cabins 1, 2, and 3 were all built new in 2006. The other buildings are also in good shape. There are things which need paint, such as some trim. But roofs, exteriors, and interiors, plumbing, electrical, sewer, water lines, propane lines, are all in good working order at the time of this writing (August 2010). Bath House - No doubt about it, the bath house needs to be replaced. Everything in it still works, everything is still safe, but the building is just old. Further, it needs to be larger. Business has grown. Building a bath house is not expensive or difficult. It is not heated or cooled, or insulated. Trees - When you have 20 camping sites under tall hardwoods, it is necessary to keep trees trimmed. You don't want limbs falling on your guests during a storm, or in the middle of the night as they sleep. Each year when the leaves are off the trees ( and after strong storms) the owners look for any weak or broken limbs. They watch for any sign of weak roots, or rotten trunks. Anything questionable is removed. In February of 2009 all trees were trimmed from the ground all the way up to crown tops. Land & Roads - If rain water is not property drained it forms ruts and washes sand out onto grass areas. If driveways are not maintained they become rutted and muddy after heavy rains. The owners have a small tractor with a set of implements used for scraping and filling ruts and wash spots. (This tractor and implements are not included in the sale). They have kept the land and roads in good shape. Watercraft - Canoes, kayaks, rafts, and tubes are in usable, safe condition. Some of the canoes look like they have been beaten over miles of rock. They have. This is normal for rental canoes. Your average rental canoe gets more use in a week than most private canoes get in 10 years. Most of the canoes are very durable commercial grade Old Towns. But they have patches, repairs, and plenty of battle scars. This is normal in the rental canoe business. Yards - Regular mowing and trimming keep weeds down and makes the property look beautiful. With the exception of the owner's home, the owners have kept the property grounds well mowed and trimmed. Weeds are not allowed to grow, grass is kept short. Owner's Home - The owner's home needs some work because it was not completely finished. The master suite bathroom needs tile in the shower. The lower level floor needs carpet or laminate, and some trim work remains. The yards around the owner's home were not landscaped. Why? After all, they take great care of the resort lawns and buildings. It has been a time issue, and it has not been as important as taking care of the resort. Personal Property Inventory - What I call PPI for short, the personal property inventory is every single item that transfers with the sale of the property that is not real property. Bed linens, bath linens, furniture, decor, window coverings, cabin cookware, tools, equipment, and on and on. It adds up to a lot of money if you replace it. And you need it all to run a small resort. In Arkansas you also pay an annual tax on many of the personal property items, so you need an accurate list for taxation purposes. Personal property inventory items change almost weekly. Linens become too old to use for anything more than rags. Furniture breaks beyond repair. Dishes and cookware are stolen by guests. Today the store has 18 chocolate bars. Tomorrow they have none. ( Items purchased for resale are a separate inventory than capital equipment.) Furthermore, items are no good if they don't work, or will soon not work. It can turn into a real hair-pulling event to itemize a PPI. But it must be done. When it becomes important, I will explain the process of taking an accurate PPI. The value of the personal property inventory is negotiable, and therefore can be an important part of the purchase price allocation. 9. Weather Seasons - In the Ozarks fall foliage typically occurs in the last week of October. In the spring trees are usually leafed out by April 15. Weather is well above freezing 10 months of the year. "Shirt Sleeve" weather occurs from mid March through mid December with only a few cold days in this period. Some enthusiasts will canoe in all but the coldest weather, and a few brave it even in snow storms. Because the Spring River has predictable water levels, tourists know they can float it whenever they want. Myatt Creek suffers from low water levels during the summer months. October rains usually bring the rivers and Myatt Creek back to normal levels. High water can occur after heavy rains. Adverse Weather - Though rare, severe weather events have caused, and can potentially cause, a loss of business and other expenses. Two floods only two weeks apart occurred in 2008. The first was in March of 2008, the second was in April of 2008. Both floods were 100 year level occurrences. They put two feet of water over the camp ground, but none of the buildings got wet. Floods of this level are rare, and having two so close together was a freak event. Then, in January of 2009, a rare ice storm caused heavy damage in the area. Power was out for over 10 days. Tree limbs snapped under the weight of ice. What came out of these horrible weather events, in the end, was positive. The two floods scrubbed the river front lawns clean and deposited more sand. While the lawns required grading, smoothing, and re-seeding of grass, the result was a much-improved lawn. Because of the ice damage to trees, a tree-trimming crew came in and not only removed dangerously dangling limbs, but trimmed up all the trees in fine style while they were at it. The result was a camp ground free of dangerous limbs, and a more open view of the water. Site Map For Listing #1 > > >
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