Villa Secrets Cape Town Rentals – 3 Year Business Plan

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Villa Secrets Cape Town Rentals – 3 Year Business Plan

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By Nick Ray Ball 11th October 2016

business plan

Introduction video (8 Minutes)
Year 1 video (10 Minutes)
Year 2 video (7.5 Minutes)
Year 3 video (6 Minutes)
Mandates Video (14 Minutes)

The following three-year business plan is created from 3 spreadsheets which present a forecast. This forecast is a version of the business plan that can be reassessed month on month, and will in time be created as part of the TFBMS business and marketing software.

Month by Month Strengths & Weaknesses can be identified and addressed, spending decisions can be adapted according to income generated and the procurement of villa rental mandates.

Index

Download Spreadsheets: 2017 | 2018 | 2019 + Magic Mandates

Villa Secrets Cape Town Rentals – Introduction

This is the 3rd version of this plan, version 2 is presented in the following link CTLV 2017 to 2020. In Version 2 we use ‘Very Safe Forecasting,’ in which every profit centre is set at a low figure or percentage. For example, in March 2014 we launched the second Cape Town Luxury Villas.com website prototype (the first being wwww.Capevillas.com in 2002). Cape Town Luxury Villas.com (CTLV) team made ZAR1,400,000 in gross profit, but for the sake of caution we have lowered this figure to ZAR1,000,000.

The latest update (V3) is still safe, however there is a considerable variable that has uncertainty, in that we hope to recruit 19 property mandates by the end of year 3. Please note that alternate spreadsheets (See ‘no mandates’ tabs) are created without any mandates and still generate at far better than average return.

In general, we suggest that while the forecasts made are certainly achievable and become the businesses target, due to the uncertain nature of business, for a worst case scenario one should half the gross and shareholder profit. To this figure we are willing to put our money where our mouth is… ZAR 3,000,000 out of the ZAR 5,000,000 investment for this venture is only paid on reaching the following gross profit targets: Year 1 (ZAR 2,750,000), Year 2 (ZAR 9,300,000) & Year 3 (ZAR 18,750,000).

Year 1. ‘2017’ Business Plan and Financial Forecast

Year 1 Video (10 Minutes)

Year one is a year of building for the future, websites, software, stock and mandates. In 2015, on a shoe string budget www.Cape-Town-Luxury-Villas.com made ZAR 1,400,000 in gross profit, which created ZAR 1,00,000 in shareholder profit. In 2017 we are manning 2 more websites, and so, if the trio of websites were also run of a shoe string budget, the 3 websites should create ZAR 3,000,000 in shareholder profit. However, as we are reinvesting most profit into building for the future we expect to make the following…

In Year 1 we forecast a gross profit of ZAR 5,500,000, with costs of ZAR 3,800,000 and Shareholder profit of ZAR 1,300,000.
Which is in turn shared 75/25 between the investor who nets ZAR1,000,000 and two key staff/directors who share R300,000

Note that for an inventor who was not actively involved in the business on a day to day basis, the share on profit to key staff increases to 100% in year 1 and 50% thereafter.

Note; All our workings are created in gross profit. We create turnover by a simple calculation where turnover is 85% and gross profit (commissions) are 15%.

In year 1, income is divided into two categories…

  • Web Agency Income in 3 parts

    • Cape-Town-Luxury-Villas.com ZAR 1,375,000
    • CapeTown.VillaSecrets.com ZAR 1,400,000
    • VillasInCampsBay.com ZAR 1,100,000
  • Income derived from Rental Mandates

    • Exclusive Mandate Direct ZAR 900,000
    • Exclusive Mandate Residual ZAR 860,000

      (This is bookings made from enquiries for a mandated villa, that end up making bookings for other villas. Note in years 2 & 3 this income stream is larger than the income made from direct bookings for the mandated villa)
    • HomeAway Subscriptions ZAR 90,000
    • Other Subscriptions ZAR 100,000

Expenses are broken into 7 categories

  • General Expenses ZAR 200,000
  • Staff & Office ZAR 1,400,000
  • Cape-Town-Luxury-Villas.com marketing ZAR 340,000
  • CapeTown.VillaSecrets.com marketing ZAR 340,000
  • VillasInCampsBay.com marketing ZAR 340,000
  • Mandate Google Ads and Remarketing ZAR 200,000
  • Mandate Web Development and Marketing ZAR 1,375,000

    Note that this expense is the licence/service fee of 25% of gross profit.

    An alternate version of these results that adapts the forecast to zero mandates is found on the tab ‘1st Year 2017 – No Mandates’ in this scenario shareholder profit is reduced from ZAR 1,300,000 to ZAR 650,000.

    The forecast we apply to mandates is

  • 2017 – 5 Mandates at average day rate of ZAR12,000 per night
  • 2018 – 11 Mandates at average day rate of ZAR14,000 per night
  • 2019 – 19 Mandates at average day rate of ZAR18,000 per night

Further note the other additional tabs…

  • ‘VS-CTR 1st Year 2017 Complex’ – Offers a more in depth forecast, with every effect of the TFBMS (Total Financial, Business & Marketing Systems) itemized month by month.
  • ‘1st Year 2017 – No Mandates’ – Offers a forecast that has no mandates
  • ‘Villa Mandate’ – The calculations for how much income mandates will generate.
  • ‘Mandate Costs + #Villas 4 Rent’ – The number of villas mandated and how much of the licence fee is spent on development and marketing.
  • ‘Villas Sold Referral Com’ – Referral income from property sales (not applicable in first year)

Year 2. ‘2018’ Business Plan and Financial Forecast

Year 2 video (7.5 Minutes)

In Year 2 we forecast a gross profit of ZAR 18,600,000, with costs of ZAR 13,700,000 and Shareholder profit of ZAR 4,900,000
Which is in turn shared 75/25 between the investor who nets ZAR 3,700,000 and two key staff/directors who share ZAR 1,200,000

Note that the large increase in all profit centres, is in part due to the reinvestment in year 1.

However also note that in year two 32% of income is generated from 11 mandated villas. The actual number of villas may be more or less.

Due to this uncertainty and in general the law of ‘S*** happens’ we half the GP in this forecast to ZAR 9,300,000. This becomes the ‘worst case’ forecast. We are so confident that we will achieve a result higher than the worst case scenario, that we will lose our 2nd year investment payment if we make less than the ZAR 9,300,000.

In year 2, income is divided into three categories…

  • Web Agency Income in 3 parts

    • Cape-Town-Luxury-Villas.com ZAR 1,870,000
    • CapeTown.VillaSecrets.com ZAR 3,050,000
    • VillasInCampsBay.com ZAR 1,870,000
  • Income derived from Rental Mandates

    • Exclusive Mandate Direct ZAR 3,600,000
    • Exclusive Mandate Residual ZAR 3,700,000
    • HomeAway Subscriptions ZAR 320,000
    • Other Subscriptions ZAR 370,000
  • Other Income

    • Local Franchises ZAR 600,000
    • Income from 25% of GP ZAR 2,400,000
    • Sales Referrals ZAR 800,000

Expenses are broken into 7 categories

  • General Expenses ZAR 800,000
  • Staff & Office ZAR 4,850,000
  • Cape-Town-Luxury-Villas.com marketing ZAR 540,000
  • CapeTown.VillaSecrets.com marketing ZAR 640,000
  • VillasInCampsBay.com marketing ZAR 540,000
  • Mandate Google Ads and Remarketing ZAR 1,760,000
  • 25% of Gross Profit spent on
    • Mandate Expenses ZAR 2,270,000
    • Total of other costs ZAR 2,800,000

      (Guest Gifts, Print Media, Video & TV, Web Development, Villa Secrets Operations, Content Marketing & SEO, Software Development)

An alternate version of these results that adapts the forecast to Zero mandates is found on the tab ‘2nd Year 2018 – No Mandates.’ In this scenario shareholder profit is reduced from ZAR 4,900,000 to ZAR 3,000,000.

Year 3. ‘2019’ Business Plan and Financial Forecast

Year 3 video (6 Minutes)

In Year 3 we forecast a gross profit of ZAR 37,500,000, with costs of ZAR 24,700,000 and Shareholder profit of ZAR 12,800,000
Which is in turn shared 75/25 between the investor who nets ZAR 9,600,000 and two key staff/directors who share ZAR 3,200,000

As before, the projected figures are far greater than any travel company could expect. However, we are not a travel company we are a technology company, that works with travel companies, the increases shown are in line with successful technology companies. Given we recruit the mandates, and create the software & systems on time, every Rand is justified, largely due to the TFBMS (Total Financial, Business & Marketing System)

This said, to account for unknown factors and mandate targets not being achieved, and to create a ‘QSF’ (Quantum Safe Forecast) we need to half the estimate for a ‘worst case’ scenario, which generates ZAR6,400,000 in shareholder profit, &/or ZAR 18,750,000 in gross profit, which is still an impressive result for any investor.

We are confident that we will reach this gross profit target and we put our money where our mouth is. If we don’t make ZAR 18,750,000 we forfeit the Year 3 instalment of the initial investment.

Note on mandate marketing… In 2019 we intend to spend a great deal more money on adverting each of the 19 villa rental mandates than we spent on all CapeTownLuxuryVillas.com advertising in 2015. The front page of Google for most searches will mostly be a collection of our individual villas and agency websites.

In year 3, income is divided into three categories…

  • Web Agency Income in 3 parts
    • Cape-Town-Luxury-Villas.com ZAR 2,270,000
    • CapeTown.VillaSecrets.com ZAR 3,500,000
    • VillasInCampsBay.com ZAR 2,270,000
  • Income derived from Rental Mandates
    • Exclusive Mandate Direct ZAR 8,680,000
    • Exclusive Mandate Residual ZAR 12,600,000
    • HomeAway Subscriptions ZAR 590,000
    • Other Subscriptions ZAR 690,000
  • Other Income
    • Local Franchises ZAR 1,200,000
    • Income from 25% of GP ZAR 3,900,000
    • Sales Referrals ZAR 1,850,000

Expenses are broken into 7 categories

  • 1. General Expenses ZAR 1,600,000
  • 2. Staff & Office ZAR 8,000,000
  • 3. Cape-Town-Luxury-Villas.com marketing ZAR 675,000
  • 4. CapeTown.VillaSecrets.com marketing ZAR 675,000
  • 5. VillasInCampsBay.com marketing ZAR 675,000
  • 6. Mandate Google Ads and Remarketing ZAR 3,750,000
  • 7. 25% of Gross Profit spent on
    • Mandate Expenses ZAR 3,100,000
    • Total of other costs ZAR 5,250,000

      (Guest Gifts, Print Media, Video & TV, Web Development, Villa Secrets Operations, Content Marketing & SEO, Software Development)

Magic Mandates Introduction and due diligence

Mandates Video (14 Minutes)

Magic Mandates, and our ZAR 1,000,000 marketing budget commitment are presented in great detail. Follow this link for the Magic Mandates Index Page.

To see the previous edition (V1.03) of this business plan please follow the links
> Executive Summary
> 4 Year Bunnies Plan & Financial Road Map
> The Basis if the Agreement

Villa Secrets Real Estate Network

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Villa Secrets Real Estate Network

Cape Town, South Africa

By Nick Ray Ball 24th September 2016

villa-secrets-real-estate-network

Welcome to the ‘Villa Secrets Real Estate Network.’
And a million reasons to join our group.

Villa Secrets.com is a luxury villas network, with a unique system for recruiting property sales and rental mandates.

Sometime it takes just one big idea to make the difference.

ZAR 1,000,000 ($70,000) in PR, marketing and web development for each suitable villa is that idea. An idea made stronger as at our heart ‘S-World Villa Secrets’ is not a villa rental or sales company, rather it is a web & software development company with a passion for PR and content marketing. Intent on creating and supporting a network of real estate related companies across the globe. ‘S-World Villa Secrets’ focuses on the marketing and development, whilst independent companies with a profit share agreement and licence to Villa Secrets branding focus on recruiting mandates, booking villas and making sales.

Rental and Sale Mandates

See:
1,000,000 Reasons to Sign a Villa Secrets Mandate &
ZAR 1,000,000 marketing budget Due Diligence

In return for our ZAR 1,000,000/$70,000 commitment (or higher for properties over $4million) we ask property owners for the rental mandate (no fixed duration) and the first sales mandate (for 3 to 6 months) when the property owner wishes to sell.

From the word go, ‘S-World Villa Secrets’ creates and markets a world class stand-alone website for the villa and we start to prepare the villa for sale. A process which over time will include a ‘Villa Sales Pack’ featuring a brochure of the villa, the Villa Secrets Magazine, articles in various Condé Nast and other luxury lifestyle magazines, plus various villa and architecture awards. In addition on disk we will provide quality videos of the property and luxury brand photo-shoots or TV ads filmed at the villa, plus links to online blog’s, news and other articles about the villa.

For overseas buyers and renters alike, such a pack will really impress, we would create about 250 such packs, saving at least 100 for the sale.

In addition to the marketing spend and estate agents pack, comes various other enticing initiatives alongside 19 ways we attract sole mandates.

S-World Villa Secrets Network

Villa Secrets is building an international network of high end real estate related business. The objective to have a company that offers exception local knowledge, service and concierge in every location on the planet. A 6-star service-first alternative to ‘Airbnb,’ That’s sells as well as rents.

S-World Villa Secrets is a technology company which is creating custom software to power the network and deliver results for Clients, Villa Owners and Property Managers.  We call this system the TFBMS: Total Marketing System & Total Financial & Bunnies System

In Cape Town and abroad, it is our strategy to create a dozen or so real estate related companies including rental agencies, estate agencies, architects & developers in each location. Many or even all of these companies will recruit mandates under the Villa Secrets banner and incentives. Some companies will only recruit mandates. In each location we have a soft target of 50 exclusive sale and rental mandates by 2019, however our  ambition is to recruit a great deal more. The advantage of this system/network to real estate agents is considerable, as only the real estate agents can sell the properties recruited by the network. At any given time Villa Secrets estate agencies will receive new exclusive mandates via the strength and ingenuity of the other companies in their local network.

Recruiting in Cape Town

We are in the final throws of launching ‘Villa Secrets – Cape Town – Rentals’ and now we are preparing to launch ‘Villa Secrets – Cape Town – Sales,’ which will in phase 1 will operate three websites:

1. ‘Cape Luxury Villas.com’ will focus on rentals but also present sales options.
2. ‘Villa Secrets Cape Town Realty’ is sales options in Cape Town from the VillaSecrets.com website.
3. ‘Amazing Homes’ is a pan African sales first website, for which we need to purchase a domain.
In addition, in phase 2 we may create a dedicated SEO driven Cape Town specific Real Estate & Property websites.

Villa Secrets will initially partner with one of the big estate agencies, who will run the three websites adverting them at positions 1, 2 & 3 in all relevant Google Searches, contributing to advertorial and the web and software development. The Real Estate Agents will also run their own Villa Secrets rentals division, which due to affiliate income will generate more money from a mandate over two years than would be made from its sale.

In building this model and rolling it out, we build a model that can be easily recreated in hundreds of locations.

Recruiting in LA, New York, the Hampton’s, Hawaii, St Bart’s and Saint Jean cap Ferrat

In many cases, Real Estate agents don’t make great returns from vacation rentals, instead they usually focus their letting departments on long term rentals, which do not require hospitality or concierge. Villa Secrets provides the service & concierge experience & handbook, trade-craft, shared infrastructure, software and marketing to make a successful rentals division which secures both rental and sales mandates.

Their are many thousands of locations that Villa Secrets can operate from and over 100 super-prime locations, and within each super-prime location there are few, or even a handful of suitable realtors. in such locations such as LA, New York, The Hampton’s, Hawaii and St Bart’s the mandate marketing budget will run as high as $500,000 for the right property. And in Saint Jean cap Ferrat in France, where a property was recently sold for over a billion dollars, we would commit a great deal more.

Logistically the only difference between Cape Town and such locations is that in such locations we would need +/- 6 months set up time to recruit properties and connect to local PMS’s (Property Management Systems). For instance in Hawaii a connection to Vacation Roost would provide hundreds of quality villas.

However with houses costing 10 times more is such locations, and there being many more houses the size/value of the market is substantially greater. And here’s the thing.. In all US locations Google adverting is almost half the cost and there is substantially less competition in general.

As such in well considered theory, the US locations mentioned should generate over 20 times the gross profit of Cape Town, and create a investor return in excess of $10,000,000 a year by 2019, with substantial gains in following years.

It is not outside the realm of possibilities for Villa Secrets to create its first Real Estate network in the USA. This line of enquiry is being actively investigated.

Villa Secrets Network: Franchise or Group?

The Villa Secrets Network has some elements usually associated with a franchise, but others that are associated with a group, such as ‘The Virgin Group.’ And some that are unique and not common to either.

1. Like a franchise, once the business plan has been created (so long as the revenue is supportive) certain staffing and advertising activities are contracted into the agreement.

2. Unlike a franchise, which are often for a set period of time (such as 12 years), a Villa Secrets network company is for life.

3. Unlike a franchise the Villa Secret networks are not a part of S-World or Villa Secrets Ltd. UK, Instead, like the Virgin Group, each company is owned by the investors, with the rights to display the ‘S-World’ & ‘Villa Secrets’ brands, offer the Villa Secrets marking mandate incentive, use the web framework, the TFBMS and ‘M-Systems.’

4. Similar to a franchise; an operational, marketing and development contribution is required, being 25% of Gross Profit from each company. (+/-4.5% of Turnover)
This contribution pays for a chunk of the mandate budget, the software development, various websites created, database connections, content marketing, PR, SEO and SEM.

As a result of this investment the gross profit of each company will increase by more than they contribute, so making the levee… simple smart business… or in terms of technology ‘starting ahead and keeping ahead.’

5. Unlike a franchise there is no monthly franchise fee, Villa Secrets Ltd UK is in essence a NGO, a system that is non-profit created to improve the profitability of its group/members. (The legal change for this is underway.)

6. Unlike a franchise once a company is making significate income, (more in 1 year than their initial investment) some of the 25% GP contribution can be used for scientific, ecological or philanthropic projects.

7. Once this point (The POP Point) has been reached (where the investor makes more in 1 year than the initial investment) profit made above this figure is invested per ‘POP Method’ into another network (that will be owned by the investor). This could be buying into a local competitors business, investment into a similar company in a different location or a company in a different niche in the same location (which in both the last two cases increases ‘ϻ’  available market share.)

In addition to creating new companies are the Villa Secrets Resort Development opportunities. More on this soon… To see the original research from 2012 see S-World and look at the ‘American Butterfly’ books, specifically book 1 ‘The Theory of Every Business.’ A summary of this book is available in chapter 6 of ‘M-Systems.’

As for the investment desired/required, it’s important to know that this investment is an investment not a fee, every cent will be itemized and agreed upon before set up. Some will pay for developers, but most will be for direct marketing, to give the company an initial boost. If one company is willing to invest more in their own marketing than another, then all else being even the company with the highest commitment wins.

However there are other factors, in particularly in quality of the CEO, lead sales and lead networker provided. However, there are a number of other factors. Such as if a company wished to create networks in other locations where they have existing infrastructure. Or if a company with a strong existing vacation rentals division was willing to merge their existing rentals division into the new Villa Secrets network. Or if a company with a strong long term rentals division was willing to merge their existing rentals division.

In all cases an agreement on a three-year business strategy would be a part of the deal.

In most or all cases we desire that the company that purchases the Villa Secrets network licence makes 50% of share options available at the original purchase price to the key personal in the venture. Where after key staff can purchase such options with their salary/commissions/bonuses over the first three years. Unless the owners of the company that bough the licence work directly on the Villa Secrets network.

Villa Secrets Magic Mandates

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Villa Secrets Magic Mandates

By Nick Ray Ball 16 September 2016

villa_secrets_mandate_main1

Welcome to Villa Secrets Magic Mandates. Presenting a million reasons to put your property marketing in our professional hands.

This section currently presents four documents.

1. 1,000,000 Reasons to Sign a Villa Secrets Mandate (take me there)
2. ZAR 1,000,000 marketing budget due diligence (take me there)
3. Villa Secrets Sample Mandate (take me there)
4. 19 ways Villa Secrets will attract Sole Mandates. (take me there)

As if having Africa’s most jaw dropping website in our portfolio alongside Cape Town most famous villas website in our group was not enough. Due to an awful lot of math-first business development Villa Secrets announces the ZAR1,000,000 ($70,000) mandate.

Where Villa Secrets network will dedicate ZAR 1,000,000 in direct marketing for qualifying villas to boost both the rental yield and sale price. And do so charging a commission that is considerably lower than the Cape Town industry average.

Index
1. 1,000,000 Reasons to Sign a Villa Secrets Mandate (show me more)
a. 3-Year guaranteed PR, marketing and web development budget of ZAR 1,000,000 (show me more)
b. Choose from the best vetted bespoke Property Managers (show me more)
c. Best Rental Return on Investment (show me more)
d. Prepare for Sale (show me more)
e. The Villa Secrets Network – Big Spender Firepower (show me more)

2. ZAR 1,000,000 marketing budget due diligence (show me more)
a. What is a Qualifying Villa? (show me more) (download spreadsheet)
b. The Magic Mandates Spreadsheet (show me more) (download spreadsheet)
c. Circular Events (show me more)
d. Additional Cost Price Branding Options (Paid for by villa owner) (show me more)
e. For Sale Mandates (show me more)
f. Itemized list of all costs incurred in the ZAR1,000,000 marketing budget. (show me more)

3. Villa Secrets Sample Mandate (show me more)
a. Basis for the Agreement (show me more)
b. ZAR 1,000,000 Dedicated Marketing Budget (show me more)
c. Property Management (show me more)
d. Commission Rates (show me more)
e. Villa Rates (show me more)
f. Prepare for Sale (show me more)
g. Accounting (show me more)

Villa Secrets Sample Mandate

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Villa Secrets Sample Mandate

By Nick Ray Ball 16 September 2016

villa_secrets_sample_mandate

Dear Valued Villa Owner or Manager,

Thank you for considering Villa Secrets to market your property and manage your bookings. If you have not read ‘1,000,000 Reasons to sign Villa Secrets Mandates’, we suggest you read that first. This post presents how we shall spend over ZAR 1,000,000 in guaranteed marketing and development for your ‘qualifying’ properties alongside 5 other significant details. For a detailed breakdown of the marketing budget, see ZAR 1,00,000 marketing budget due diligence, Which includes a section on which properties qualify

Index

1. Basis for the Agreement
2. ZAR 1,000,000 Dedicated Marketing Budget
3. Property Management
4. Commission Rates
5. Villa Rates
6. Prepare for Sale
7. Accounting

1. Basis for the Agreement

This agreement is between a property owner or their proxy and a Cape Town based Villa Secrets network franchise in conjunction with Villa Secrets Ltd. UK who assists with web development and marketing, but also provide oversight and ombudsman service. If one is unsatisfied in any way with your local representation, Villa Secrets Ltd. UK is there to help. Villa Secrets Ltd. UK is regulated by the UK government appointed PRS (Property Redress Scheme) and ASTA (American Society of Travel Agents).

There is no fixed length for this agreement. However, we do ask that if the villa remains available for rent after cancelation of exclusivity, (unless due to breach of contract) that Villa Secrets can continue to market the property at a best or equal matching STO (Standard Tour Operator Rate) (discount) rate.

2. ZAR 1,000,000 Dedicated Marketing Budget

Based on a suitable property worth about ZAR 40,000,000 in Camps Bay.

Villa Secrets will spend, from its own commission at least ZAR 1,000,000 in marketing over three years. The exact breakdown of this spending is presented in the article ZAR 1,00,000 marketing budget due diligence. The accompanying spreadsheet can be downloaded here ‘Magic Mandates Spreadsheet’ Please note that the different tabs present different components.

One point to note from this spreadsheet is that we are not marketing up our staff or items. Where a programmer costs ZAR 350,000 a year, we pro rata the cost. And where we get bulk purchase details on YOAST SEO WordPress plugins and items such as Best of the Web blog subscriptions which cost an individual $300 each, we only account for our cost that is $75 each.

3. Property Management

a. Choose from the best vetted bespoke Property Managers and small owner run Property Management companies. Or appoint your own.

However, unless one knows the industry well, it’s a risk for owners working with an individual or small company. If things don’t run to plan, there is no recourse, and trust can also be an issue particularly when villa owners do not live in the same province or country as the property manager.

This is where Villa Secrets fills the gap. We know the best property managers and we are happy to recommend them. Villa Secrets does not charge a referral fee for recommendations, the only condition is that we do the marketing and manage the bookings calendar.

Should you be unhappy with your property manager we are on your side, after all we make money from bookings, not the managers.

b. The cost of the property manager is for the Villa Owner’s account, but can be paid to the property manager by Villa Secrets from booking income.

We appreciate that some other agencies have in-house property management services, that would from the outset appear of better value. However, in most cases their commission rates are higher and we know from experience that a dedicated owner run property manager team or capable individual will do a much better job. And will encourage and promote repeat business.

c. Property Managers charge between ZAR 5,000 and ZAR 20,000 a month. Their responsibilities are presented in a separate document.

4. Commission Rates

In general in Cape Town commissions range from 20% to 45%, the bigger companies charging higher. 20% is standard. However mostly when one hears 20% it is part of a 40% total commission with the mandated agent charging 20% and the referring Agent receiving same.

The maximum one pays for a Villa Secrets mandate is 25%, unless one uses expensive booking channels such as Booking.com & Expedia, or in the rare case that an exceptional source of bookings is found for mid and out of season bookings.

The average booking commission will be about 22.5%.
We guarantee the average commission will not be more than 25%, unless with specific permission from the villa owner.

Each property has flexibility in their commission rates, the following is the standard rate.

If the Villa Secrets mandated agency generates its own booking via its website, the villa website (which we create and advertise on Google, Bing and AdRoll), from subscription sites such as HomeAway, Cape Stay, Quintessentially or social media, content marketing or any other direct enquiry, the commission is 20%. Including the option to negotiate the overall price (with set limitations) for good and exceptional bookings.

If the mandates agency generates a booking via an affiliate agency (For Instance, www.luxuryretreats.com or www.rhinoafrica.com), the commission is 10% for the mandated agency and between 10% and 15% to the affiliate agency. (20% in exceptional circumstances)

If the mandated agency creates a booking via a booking channel such as www.flipkey.com or www.villas.com , the commission is between 10% to 15% for the mandated agency and between 5% and 20% to the booking channel (The villa owner may choose the max commission payable to a booking channel so limiting total commission to 25%).

If the mandated agency creates a booking via a PMS (Property Management System) such as KIGO or MyBookingPal, the commission is 15% to 20% for the mandated agency and between 2.5% and 5% to the PMS

5. Villa Rates

For rates please see the spreadsheet ‘Magic Villa Rates’

On which we see some examples of different rate structures for different properties that were available for sale. Note that there are many tabs at the bottom with different ‘Mid-Season Rates’

On the tabs one can easily change the rental forecast by changing the ‘Mid-Season Rate’ in the top left. One can also make quick adjustments to the Peak, High, shoulder and Low Season Rates, by adjusting the percentages. Lastly one can adjust occupation by changing the days booked column.

In each case we shall prepare a tailor made rate card, over 3 years, increasing by more than inflation each year due to the marketing budget and the growth of the network.

The rate card we provide will be a low forecast, which will have a variable of 15% in the first year. Which accounts for good or bad luck. If in the very unlikely circumstance we perform below the minus 15% variable, in any year then a reasonably substantial penalty will be levied.

When it comes to villas over ZAR 100,000,000 there are a few ways to price, one can price lower than usual in non-peak times, or one can price the same. Or one can price the same but offer discounts for longer stays. The full merits of the different strategies will be presented by Villa Secrets Ltd Uk’s CEO Nick Ray Ball.

6. Prepare for Sale

For this section please follow this link
http://network.villasecrets.com/villa-secrets-cape-town-network/1000000-reasons-to-sign-a-villa-secrets-mandate#prepare-for-sale

7. Accounting

Accounting will be monthly and shall include all booking data, including the cost charged by affiliates and booking channels (when known)

In all cases it is Villa Secrets policy to pay the villa owner before the client arrives (unless in the case of some booking channels where payment it only received after a guests arrives)
In general Villa Secrets has a ‘max 3 working day’s owner payment policy’ however many villa owners prefer to be paid all in one go at the end of the month when the money arrived.

Currently we provide statements and excel spreadsheets, however we are working on custom software called the TFBMS (Total Financial, Business and Marketing Software) in which the TFMS component parts 1, 2, 3, 4, 5 and particularly parts 15 the Property Managers CMS and 16 the Property owners CMS provide every transaction made in relation to your villa updated three times a week, alongside a lot of other useful data and functionalities

1,000,000 Reasons to Sign a Villa Secrets Mandate

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1,000,000 Reasons to Sign a Villa Secrets Mandate

For Luxury Villa Rental & Sale Mandate

By Nick Ray Ball 16th September 2016

villas-in-cape-town

Index

1. 3-Year guaranteed PR, marketing and web development budget of ZAR 1,000,000
2. Choose from the best vetted bespoke Property Managers
3. Best Rental Return on Investment
4. Prepare for Sale
5. The Villa Secrets Network – Big Spender Firepower

1. Villa Secrets Offers a 3-Year guaranteed PR, marketing and web development budget of ZAR 1,000,000 ($70,000) for suitable properties (as is pictures above) worth about ZAR 40,000,000 ($2,800,000)

For a ZAR 40-million-rand villa, a ZAR1,000,00 outlay in dedicated marketing and development is a great deal more than any other villa rental agency we know. In fact about 95% more.

It is also over twice the amount a real estate agency would make from the sale after referrals and agent commission. (Although we do not know how much of that commission they allocate to direct marketing, but we can be relatively certain that they will not spend more than they earn)

Please note when we say ‘paid for from commission,’ we mean ‘commission’ this package is paid for from our commission. It is not a ZAR 1,000,000 marketing expense that we would recover from your booking revenue.

Lastly on this point, our commission of 20% for direct bookings and 25% for selected affiliate booking is significantly lower than the average of 20% for direct bookings and 40% for affiliate bookings which is the average in Cape Town for the bigger agancies.

So what is the Villa Secrets, Secret?

At Villa Secrets, we see this outlay as the minimum one should spend on marketing to get the best rental and sale price. However, if you want to know how we can afford this when others cannot/do not please consider the following.

a. When you sign a mandate with a villa secrets franchise, the franchise receives significant backup/funding for the head office Villa Secrets ltd UK. Nearly 60% of the ZAR 1,000,000 comes from Villa Secrets head office and marketing divisions.

Villa Secrets Ltd UK is a technology driven company intent on creating and supporting franchises across the world, starting with the most desirable locations. Villa Secrets Ltd UK does not rent or sell villas, instead they provide the websites, content, imagery, PR and marketing for their franchises and their franchises mandated villas, seeking to increasing the SEO gravity and expand size of the Villa Secrets network.

As such, the ZAR 1,000,000 in costs, only costs the villa secrets franchise about ZAR 110,000 a year, which can easily be afforded, especially given the following…

b. Due to the ZAR 1,000,000 in additional marketing on top of an already competent multi-site network including www.VillasSecrets.com, www.CapeVillas.com & www.Cape-Town-Luxury-Villas.com. Villa Secrets franchise will receive multiple booking requests for popular dates. In the case of the lucrative 14 night Christmas and New Year Booking, which guaranteed over ZAR 1,000,000 it’s quite possible to book that slot 10 times over.

And so we make these extra enquiries count, by using them to book other villas. Which we estimate will double a franchises income.

As such, by spending ZAR 1,000,000 in marketing we generate near twice the income, see the spreadsheet ‘Magic Mandates’ and go to the second tab ‘booking Income.’

Below we see the summary, where we can see that due to the marketing we perform the ‘Villa Commission’ increase (along with the villa owner’s income).

However, in addition we also see residual income of 50% in the first year and by year 3 we expect to make more from residual income that we do in direct commission.

Villa Commission

Residual Income

Total Income

 

316,913

158,456

475,369

2017

364,449

364,449

728,899

2018

437,339

546,674

984,013

2020

1,118,701

1,069,580

2,188,281

 

 

The simple combination of the above makes the ZAR 1,000,000 affordable. And note that the ZAR 1,000,000 is cost price, and over 50% cheaper than a dedicated agency would charge as they need to add profit and tax.

For Due Diligence on this point click here.

Below we see a breakdown of costs, including some optional extras at cost price. To download the full spreadsheet, click here

Marketing Commitment

 

 

 

Villa Value from

40,000,000

to

70,000,000

 

Years

Our

Agency/Direct

 

 

Costs

Costs

Website & Content Marketing

3

346,170

626,129

Web Advertising

3

290,929

394,053

PR

3

223,875

338,623

Subscriptions & Directories

3

140,228

198,862

Guaranteed Total

 

1,001,202

1,557,668

 

 

 

Paid for by three different Villa Secret divisions

 

 

Company that acquired the Mandate

 

439,802

0

Communal Marketing Budget

 

250,238

0

S-World Villa Secrets (Head Office)

 

311,161

0

 

 

1,001,202

 

Additional Cost Price Branding Options
(Paid for by villa owner)

 

 

 

Villa Secrets Magazine

4 Pages

279,996

559,992

Broacher 4 Page

3

63,021

85,860

Conde Nast 1-page editorial

1

100,000

200,000

Websites Home Page Inclusion

3

150,000

300,000

Network Extras Total

 

593,017

1,145,852

2. Choose from the best vetted bespoke Property Managers

We have been managing properties in Cape Town since 2004 and we created our first PMS (Property Management System) in 2006. Experience has shown us that the way to get the right balance for the owner and guest is to use small owner run agencies, or capable individuals.

However, unless one knows the industry well, it’s a risk for owners working with an individual or small company. If things don’t run to plan, there is no recourse, and trust can also be an issue particularly when villa owners do not live in the same province or country as the property manager.

This is where Villa Secrets fills the gap. We know the best property managers and we are happy to recommend them. Villa Secrets does not charge a referral fee for recommendations, the only condition is that we do the marketing and manage the bookings calendar.

Should you be unhappy with your property manager we are on your side, after all we make money from bookings, not the managers.

3. Best Rental Return on Investment

Given a minimum of a ZAR 1,000,000 marketing budget, we will create a great rental return. There is quite a lot of strategy behind the initiative and some we can’t say as our competitors will follow us. But what we can say is that we know that a lot of clients who find a villa on an agency website or channel like Booking.com, search for the villa on Google and try to book direct. When they find the villas direct website, they feel like they have cut out the middle man.

When a client comes to your site, they will be very impressed, in the same way people are with Villa Secrets. This website also becomes a source of direct bookings as we create dedicated Google AdWords accounts and advertise on relevant keywords. The budget for this and remarketing is about ZAR 80,000 a year and is the main cost centre for the Villa Secrets rental franchise you sign your mandate to. (Quick note, once one signs a mandate with any Villa Secrets franchise the villa becomes a priority for VillaSecrets.com and all other franchise which spit the commission)

As for Booking Channels, we pay for HomeAway Platinum package and a number of other subscription based websites. We use the channels that are likely to create bookings. But we don’t use channels that don’t produce as it takes away from the exclusivity. In the case of ZAR 100,000,000 ($7,000,000) properties we would keep the villa very exclusive and focus on getting it on the books of the top 50 global luxury travel and luxury villa agenesis, who would not be far less interested if the villa was on Airbnb or Booking.com. In addition, we create a system that as soon as an agency has presented a villa to a client, the rest of the affiliates cant book it, which creates a very safe environment for all involved.

Add all of the above to our growing network of Luxury Cape Town villa agencies including www.VillasSecrets.com, www.CapeVillas.com, www.Cape-Town-Luxury-Villas.com. Plus, our 16 years of experience in Cape Town which has over the years seen Conde Nast Traveller recommendations and other accolades and we are confident that one will not see better return, or for that matter a better increase in prestige equating to an increase in the value of your home

4. Prepare for Sale

Note that in addition to increasing the value of your villa, the following also increases the frequency and rate for rentals.

We appreciate that many owners looking for a rental agency are not considering selling, many have just purchased. And that some owners wish to leave the door open for the property to be sold, should the right offer come along.

In the case of the former, owners who are not selling, in most cases the day will eventually come when one sells. And in this case, we ask that the Villa Secrets be award the first opportunity, in the form of a 3 month exclusive sales mandate.

We can’t say what the future holds, we are looking to create franchise partnerships with one, two or even all of the big estate agencies. However, if that does not occur, such agencies will happily present the villa to their clients for a split in commission, that is how may sales are done in Cape Town, the agencies all work together.

Usually this would be a 50/50 split, however Villa secrets would only require 25%, and an additional 25% would be given to the agent who referred/recruited the property to us in the first place, so long as they were active in Cape Town.

Our job is to prepare the villa for sale and do whatever we can to increase the value. We do this via various initiatives.

What Villa Secrets does that no other estate agency does is provide all the affiliate estate agents with suitable and powerful marketing and PR materials to assist the sale, and can make holiday makers aware that some buyers will be visiting during their stay.

a. The Estate Agent’s Pack

(Note the print marketing items within are cost price optional extras, or half of cost price for villas over ZAR 70,000,000)

A pack of magazines brochures and DVD’s that the villa has been featured in

a.i. We have deals in place with with magazines such as Conde Nast Home & Garden about sponsored editorial. Conde Nast appreciate that the quality content we provide sits well in their magazine and everyone loves Africa. So far we have been offered a significant discount for 4 page editorial spreads in which we would feature an exclusive use safari lodge such as Ulusaba, a private island such as Cousine Island & a Cape Town Villa. The brand association alone within a trusted magazine in priceless, and it leads to many other opportunities. (This is a Cost Price Item or half of Cost for ZAR 70,000,000 plus villas)

We will receive 200 or so magazines, some for your villa, some for other villas, some for you, some for potential big bookings and at a good number for the Estate Agent’s pack, so each potential buyer received not a single piece of cardboard for some pictures in it, but a significant bag of goodies which adds to the villas prestige, and so its perceived value.

a.ii. We are creating great articles to luxury travel blogs and magazines for them to display. Over time we shall become guest bloggers and writers for a number of quality trusted publications and websites.

a.iii. We will create a dedicated brochure that gets sent to guests and put in the Estate Agent’s pack. (This is a Cost Price Item or half of Cost for ZAR 70,000,000 plus villas)

a.iv. We shall create a DVD which will contain all TV work that has been in broadcast and videos that we have made.

a.v. The Villa Secrets Magazine, whilst this is in our opinion the most significant part of the estate agent’s pack, and a more significant rental multiplier. We are a little way away from completely presenting the format.

We last published a magazine in 2009 and distributed 30,000 with Conde Nast Traveller UK. Which saw Bulgari phoning us to say, ‘We did not know you had such luxuries in Africa’ and asked if they could be the main sponsor in our follow up. (for more money that the first magazine cost us)

We will soon be reconnecting with Bulgari and hope they still wish to participate. This magazine will cover Africa and only have a few Cape Town villas featured, so it’s a first come first served opportunity. Villas will be shown either in 4 or 8 pages. And our hope is whoever our main sponsor will be will wish to product place their couture or diamonds within the first few 8-page villa slot.

One thing one can be sure of is that being in this magazine and the magazine being a part of the estate agents pack or sent to rental clients will increase the prestige of the property. (This is a Cost Price Item or half of Cost for ZAR 70,000,000 plus villas)

b. The Website.

By the end of the first year the website will be a great asset. Superb photography, videos and content with a 2020 theme using HTML5 animations made from the Villa Secrets framework, and also including a WordPress blog that looks much like our own. See blog.villasecrets.com.

It’s worth a minute having a look at some of these blogs. I recommend Serenity, Moondance, Ulusaba & Cousine Island. Compare these pages to any other blog on any other website anywhere in the world and appreciate our passion for delivering beautiful web pages.

It’s not hard or expensive to make a good looking website nowadays. But it is hard to make an exceptional one. However, it’s the content that costs the money, most sites are let down greatly by their lack of quality content. This is not a problem at Villa Secrets as we are in part a very passionate content marketing company.

c. Awards and top 10 websites

A villa that wins an award such as The Word Travel Awards add’s a distinct air of recognition that will of course increase the value of the property. Our CEO and PR staff will do all that we can do to get villas nominated for such awards.

The same applies to Conde Nast readers awards and other such honours. However, a lot lies in the service package, a Villa Hotel for instance (as is mentioned in the next point) will stand a better chance than a standard villa.

In addition to applying to existing awards and authorities we are creating our own. This idea originated when we realised that there was a need for a better awards system for Safaris than www.SafariAwards.com , which did not mention any of the best or most popular safaris in its 70 plus awards. So we started work on our own system that used data from other awards and award winning tour operators to create a genuine platform.

We are still far from completing this but we have got the domains:
AfricanSafariAwards.com
SafraiAwards.org
Top10Safari.com

We have however started to experiment with Villas.

Have a look at www.top10CapeTownVillas.com ,it’s not complete but you get the idea. In all honesty any of the top 6 could be No.1 depending on what a client or purchaser wants from a property. And so with good confidence we can set its order in different ways. And when it’s time to sell, your villa rises to No.1.

On a more official capacity linked to our non-profit company (in making), we are creating the following awards programs and developing custom software to power each award.

ArchitectAwards.org
WorldVillaAwards.org
AfricanVillaAwards.com

We see no reason why the Conde Nast magazines we are writing for, will not let us present the AfricanVillaAwards.com results in our editorial. So long as it is transparent and judged fairy and honestly. Lucky for us we are only interested in properties that would on their day win such an award so there is no conflict of interest.

We would not do a top ten, instead we would likely have a number of top 3’s, such as

Best African Villa
Best Private Island
Best Villa Hotel
Best Cape Town Villa
Best Exclusive Use Safari Lodge

We will be starting the AfricanVillaAwards.com in early 2017

d. Villa Hotels

A Villa Hotel is a villa that offers the services of a Hotel. For example, free breakfast, complimentary drinks, a private chef, and in some cases a butler. The best known example in Cape Town is the Ellerman Villa.

If The Pentagon villa offered such a service package it would likely have won the The Word Travel Awards African Villa Category, as opposed to just receiving a nomination.

However, A Villa Hotel requires the additional expenses associated and excellent management of such services, and is a serious commitment. But for those who wish to be very serious about raising the prestige and so the ‘for sale’ value of their villa, this option should be considered.

e. Big Brand Photo Shoots and Ads.

There is nothing like a big glamorous brand like ‘BVLGARI’ doing stills shoot or advert at the villa. Each such add, properly catalogued increases the villas prestige.

We have a clever initiative for your consideration to choose or not. In general, photo shoots are not economically viable as they are for only one or two days and they can block a bigger booking, plus they are high maintenance and the money is never great.

So in general we don’t do a lot of shoots. However, a big brand shoot is great PR. So we suggest we offer all such brands and the local production companies a 50% discount on the shoot, and then use from 25% to 50% to pay for oversight, admin and PR.

As a part of the deal we will insist that we be given all complete material and ask that they make a video of them making the shoot for our benefit.

In terms of timing, we would either select dates that were near another booking or take bookings on a last minute (within 2 weeks basis)

These videos and marketing materials then go on the website in a dedicated blog and is added to the ‘property pack.’

5. The Villa Secrets Network – Big Spender Firepower

Villa Secrets have a complex network development strategy which is very significant for Villas over ZAR 70,000,000 ($5,000,000). In these cases, with day rates from ZAR 50,000 to ZAR 150,000 there is currently limited demand.

The way Villa Secrets network strategy works is to target companies and locations where there is greater demand for such rates and then shift the demand to Cape Town, or in the case of multi leg luxury safari and private island travellers from 5 star Cape Town hotels to 7 diamond rated villas.

One example would be to create a franchise with one of the big Safari companies, there are plenty of people paying ZAR 20,000 per person per day for Safaris, who can be tempted to Cape Town, who would not think twice at paying ZAR 50,000 a night in the winter months (which is when the Safari Season is at its peak)

Another example would be to join with a top villa company in the Caribbean, where villas are more expensive and present their clients with the option of a African villa holiday, including a safari and maybe a private Island.

Another example is to create websites for private islands such as Cousine Island, so they can book Cape Town Villas as part of multi leg trips. Another example is working with Execujet who specialise in private jets.

In the case of the above two Cousine Island &Execujet, both have agreed to us creating them an African Villas and Safari website for them to create such experiences.

We were made an offer last year by award winning Rhino Africa, and in the case of Sotheby’s Realty as early as 2009 we created them a website called ‘Africa Concierge’ which was in many ways the inspiration behind the Villa Secrets Network.

In general the Villa Secrets strategy is to find companies that have wealthy clients and recruit them to the network. And in addition create franchises in the richest locations so increasing our own client database, from which we can present Africa and Cape Town options.

ZAR 1,000,000 marketing budget due diligence

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ZAR 1,000,000 marketing budget due diligence

For Luxury Villa Rental & Sale Mandates

By Nick Ray Ball 16th September 2016

magic_mandates1

In this article we shall look how the at the ZAR1,000,000 ($70,000) marketing budget is afforded for qualifying villas.

Index

1. What is a Qualifying Villa?
2. The Magic Mandates Spreadsheet?
3. Circular Events?
4. Additional Cost Price Branding Options (Paid for by villa owner)?
5. For Sale Mandates?
6. Itemize list of all costs incurred in the ZAR1,000,000 marketing budget.?

1. What is a Qualifying Villa?

First we need to define which villas ‘qualify,’ please open the spreadsheet ‘Magic Villa Rates’
on which we present a quick case study of villas available for sale and attached to each is a rating from 2 to 6, which corresponds to the tabs at the bottom of the spreadsheet.

For each villa we present some key factors, location, property type, distance to beach, pool size, view, Wow factor and bedrooms. All play their part.

This was a very quick case study; however, we can see its quite possible for a ZAR 18,000,000 ($1,250,000) villa to be as desirable as a ZAR 40,000,000 ($2,800,000) in the same town of Camps Bay. As such, each villa is considered on a case by case basis, not specifically it’s for sale value, that said value is the most accurate single factor.

In general as a holiday location not a place to live, all being even, Camps Bay is more popular than Clifton and Clifton is more popular than Bantry Bay and Fresnaye. However, a villa with a garden & big pool and great view and lots of wow in Fresnaye for ZAR 50,000,000 ($3,500,000) will significantly out earn a villa with a small garden and pool and less wow in Camps Bay for ZAR 40,000,000. ($2,800,000)

In the case of each villa, we will create a forecast and then present our marketing commitment, and note that our forecasts are in general ‘low forecasts,’ for which we are happy to put our money where our mouth is and trigger penalties is we do not make target.

In general, we consider 3 different price brackets, based on the mid-season rate, if it is above ZAR 18,000 ($1,250) a day then a villa qualifies for the ZAR 1,000,000 commitment. (Note that the mid-season rate in Cape Town is March or November which is typically about a third of the peak season rate seen in Late December and Early Jan)

If a property has a mid-season rate below ZAR 18,000 then on a sliding scale the commitment decreases, so for instance the ZAR 18,000,000 ($1,240,000) villa identified as Villa 1 in the ‘Magic Villa Rates’ spreadsheet would see a marketing commit from our commission of ZAR 600,000 ($42,000) (3.3% of the value of the home, or 5.5% if one were to use web, content and PR agencies to do the same task)

Note that our commission is typically 20%, but rises to 25% when selected affiliate agencies and booking channels are used.

For a villa with a higher mid-season rate over ZAR 30,000 ($2,100) a night, the budget increases to include cost of a few thousand individual property brochure that we send to clients who wish to book and include in the property packs given to potential buyers.

In addition, a collection of additional marketing factors such as featuring in our magazine, or in various Conde Nast editorials are offered at 50% of cost. You can see such items below in the 3rd series of the table, albeit this is the standard ZAR18,000 ($1,250) per mid-season rate presentation. To see the higher value offer, download the ‘Magic Mandates. ‘spreadsheet

2. The Magic Mandates Spreadsheet

Marketing Commitment

 

 

 

Villa Value from

40,000,000

to

70,000,000

 

Years

Our

Agency/Direct

 

 

Costs

Costs

Website & Content Marketing

3

346,170

626,129

Web Advertising

3

290,929

394,053

PR

3

223,875

338,623

Subscriptions & Directories

3

140,228

198,862

Guaranteed Total

 

1,001,202

1,557,668

 

 

 

Paid for by three different Villa Secret divisions

 

 

Company that acquired the Mandate

 

439,802

0

Communal Marketing Budget

 

250,238

0

S-World Villa Secrets (Head Office)

 

311,161

0

 

 

1,001,202

 

Additional Cost Price Branding Options
(Paid for by villa owner)

 

 

 

Villa Secrets Magazine

4 Pages

279,996

559,992

Broacher 4 Page

3

63,021

85,860

Conde Nast 1-page editorial

1

100,000

200,000

Websites Home Page Inclusion

3

150,000

300,000

Network Extras Total

 

593,017

1,145,852

Above we see a breakdown of the ZAR 1,000,000 marketing budget, the first thing to notice is that the ZAR 1,000,000 is the cost price. (See spreadsheet ‘Magic Mandates.’) With the exception of video, all marketing and development is handled in house, the head office for Villa Secrets is for all intents a purposes a development and marketing company, they do not rent or sell villas, they focus on increasing the size gravity (size) of the network and the quality of the content within. On the right we see the cost equivalent from a SA marketing or web development agency is about 50% more as the agency marks up costs for profit and paying tax.

For Villa Secrets Ltd UK’s global strategy, it does not really make much difference which websites are created and which grow, just so long as the quality is good. This is one way we can afford to do what we do. About 60% of the costs are covered by Villa Secrets head office and a joint marketing budget.

Once we deduct the head office expense and the communal marketing budget and spread the cost over 3 years we get to a figure that is only ZAR 115,000 per year for the actual Cape Town villa agency that signs the mandate.

3. Circular Events

There is a lot of mathematics the underpins the S-World Villa Secrets strategy, the founding principle is very simple and is a consideration of ‘the butterfly effect’ where we look to create feedback loops and look for the concepts that have the greatest cause and effect. We call such effects ‘Circular Events.’

For instance, by spending ZAR 1,000,000 in marketing we will of course generate a lot of booking requests, however one can’t book the same villa twice. Or can one?

When we assess how much income we make from a villa mandate we consider

1. The revenue we will make in commission from the villa rentals
2. The revenue we will make in commission from sale of the villa, if we also receive a sales mandate
3. And importantly the revenue we will make from the enquiries we receive when the villa is booked or deemed unsuitable (maybe it’s not suitable for young children). In this case we use the enquiry to make bookings in other villas.

In the case of the latter, over a three-year period we would expect to make about the same residual income from bookings made in other villas that we would in the primary villa (when it is booked or was not suitable).

As such, by spending ZAR 1,000,000 in marketing we generate over twice the income, see the spreadsheet ‘Magic Mandates’ and go to the second tab ‘booking Income.’

Below we see the summary, in which as the marketing we perform increases over the 3 years we see the commission we kame for the villa increases (as does the villa owners income) and in addition we see the residual income starts at about 50% in the first year and by year 3 we expect to make more from residual income that we do in commission from the booking. More than justifying our expense.

Villa Commission

Residual Income

Total Income

 

316,913

158,456

475,369

2017

364,449

364,449

728,899

2018

437,339

546,674

984,013

2020

1,118,701

1,069,580

2,188,281

 

4. Additional Cost Price Branding Options (Paid for by villa owner)

In addition to the complimentary (free marketing and development services are some cost price branding and print media options.

1. Placement in our forthcoming ‘Villa Secrets’ magazine,
2. Create mini brochures of each property (and send them and the magazine to clients when they enquire)
3. Feature the villa in editorial content in various Conde Nast magazines.
We already have one deal in place with one Conde Nast UK publication to create 4 page editorial posts, that would look like genuine editorial. This we have negotiated at half price and a near front position because Conde Nast like our portfolio and Africa. The article we are currently creating will feature 4 properties and cost about ZAR 100,000 per page.
4. Offer ZAR 150,000 in homepage placements on various websites.
(The value in this is only realised when we increase out Advertising Budget on VillaSecrets.com to about ZAR 5,000,000 a year)

For Villas in the ZAR 70,000,000 and above category, we increase the size of the mini broacher to 8 pages and include it within the complimentary marketing. We increase the magazine placement to 8 pages and reduce the pro rata increased cost by 50%. We pay 50% towards the Conde Nast Article and significantly increase the amount on homepage placements.

5. For Sale Mandates

The reason we ask for the sale mandate as well as the rental is to encourage one of the top three estate agents in Cape Town to join our network.

Which creates another ‘circular event’ most property owners who are selling would not mind to much if one of the top 3 estate agents in Cape Town had the first attempt as selling the villa when it was time. Especially as the ZAR 1,000,000 in marketing will in itself increase the sale price, and it makes a lot of sense to work together on the sale.

If Villa Secrets secures the first option to sell for most of the villas it mandates with, the Villa Secrets real estate franchise will be an attractive idea for the top realtors.

For the above reason we ask that for the first three months, the Villa Secrets nominated estate agent has first crack at the sale.

The exact financial details of which are yet to be finalised

6. Itemized list of all costs incurred in the ZAR1,000,000 marketing budget.

The following are from the ‘Magic Mandates’ spreadsheet. To download the spreadsheet, click here

a. Web Design, Content Marketing, SEO & SEM

a.i. Content for 11 pages (11 Days)
a.ii. Photography & Photoshop (7 Days) (3 shoots + Photoshop)
a.iii. Website Customization by Programmer (3 days)
a.iv. Website Customization by Graphic Designer (3 Days)
a.v. Website Customization by HTML5 Designer (3 Days)
a.vi. SEO 1 – Local SEO (7 Days) (Add to over 300 SA Directories)
a.vii. SEO 2 – Guest Blogging (2 per year – 6 in total) (6 Days)
a.viii. SEO 3 – 10 Links from Network – Flat Fee
a.ix. Creation of 20 Social Networks and Auto Updates (15 Days)
a.x. WordPress Blog 1 – Theme & Plugins – Flat fee
a.xi. WordPress Blog 2- 18 Blogs Written 0ver 3 years (18 Days)
a.xii. WordPress Blog 3- Photos for 9 Blogs (9 Days)
a.xiii. WordPress Blog 4 – Uploading & Admin of 9 Photoshoots (9 Days)
a.xiv. WordPress Blog 5 – Create 18 layer sliders (6 Days)
a.xv. Website & Blog Manager – Director – 5 Days
a.xvi. Website & Blog Web & SEO Master – 5 Days
a.xvii. Media Collector and Uploader – 9 Pieces
a.xviii. Pro Video Including Drone (outsourced)
a.xix. 3 Layer Slider Videos with voice 0ver (outsourced)
a.xx. Website & Blog Other 15 days

b. Web Advertising

b.i. Google AdWords and Microsoft + AdRoll & Google Remarketing Budget ZAR 225,000
b.ii. Create Campaigns (Villa Secrets CEO Nick Ray Ball)
b.iii. Design of HTML5 Ads
b.iv. CSS & HTML 5 Coding for Ads
b.v. Management

c. PR

c.i. PR- (Getting Villa on TV and in magazines) – (10 Days per year)
c.ii. PR Event at Villa (1 per year)
c.iii. PR Web Premium 1 Entry per year
c.iv. Management

d. Subscriptions & Directories
d.i. HomeAway Platinum Subscription for 3 years
d.ii. HomeAway Platinum Organization and Optimization
d.iii. Other Subscriptions for 3 years
d.iv. Other Subscriptions Organization and Optimization
d.v. Best of the Web – 1 Entry = 7 links (3 entries/21 links)
d.vi. Blog catalogue – VIB+ 1 Entry
d.vii. 10 Other Directories Including Free Directories
d.viii. 10 Other Directories Organization and Optimization

Villa Secrets Cape Town – Executive Summary

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Villa Secrets Cape Town – Executive Summary

Luxury Villa Rentals division

By Nick Ray Ball 09th September 2016

Villa Secrets.com (VS)
Villas in Camps Bay.com (VICB)
Cape Town Luxury Villas.com (CTLV)

To paraphrase Einstein ‘a plan should be simple, but not simpler,’ his equation E=MC2 was simple, however the detail was complex.

Under the hood, the Villa Secrets plan is also complex and has been described by a business development expert as visionary. However, on the surface it is actually very simple.

There are 5 basic components (4 profit centres and an overall profit multiplier),

1. The tried and twice tested ‘Cape Town Luxury Villas.com’ which in 2015 was managed by ‘team 1.’ Who (on a shoestring budget) generated ZAR 1,400,000, making ZAR 1,000,000 in shareholder profit. And then in 2016 it was managed by ‘team 2’ who (also on a shoestring budget) generated similar numbers

As a stand-alone business for sale, Aldes Atlantic (Africa’s most trusted business brokers) valued the company (website) at ZAR 3,300,000.

This website/profit centre is added to by the following…

2. Villa Secrets.com, luxury villa rentals in the Atlantic Seaboard of Cape Town, which will use a similar but improved marketing strategy with a greatly improved website. Doubling the potential to ZAR 2,800,000 in gross profit.

3. Villas in Camps Bay.com, which by Jan 2017 will be of a similar standard as Villa Secrets. Again using a similar strategy on a greatly improved website, tripling the potential to ZAR 4,200,000 in gross profit.

4. Villas Secrets Rentals Mandates, a 19-point strong plan to gain exclusive rental mandates, which includes a 3 year ZAR 400,000 per villa marketing budget, which is exactly ZAR 400,000 more than any other agency offers.

Based on recruiting 8 mid-to high end villas in three years, we see in year 3 this profit centre increases total Gross Profit by 39%.

5. Lastly comes what we call the TFBMS, which stands for ‘Total Financial Business and Marketing Software,’ in two sections Total Marketing Software, and Total Financial and Business Software.

Alongside taking care of the management accounts and organizing hospitality and service functions, this software steadily increases the profitability of all profit centres, and turns every Villa Rental Mandate into an independent profit centre, with its own website and marketing plan.

Considering the above, a simple way to cautiously evaluate the value of the company would be to use the ZAR 3,300,000 evaluation for Cape Town Luxury Villas.com. And triple it to include the Villa Secrets and Villas in Camps Bay profit centres making ZAR 9,900,000, Adding whatever one feels appropriate for the mandate’s income stream and the continuous improvement provided by the TFBMS.

How much is the initial investment?

We are not looking for a figure of ZAR9,900,000 and above. We are looking for ZAR 3,200,000 be it by one individual, or split between a couple or a few individuals. (Note that over 75% of this investment is spent on TFBMS & the ‘Villas in Camps Bay’ website development and CTLV and Villa Secrets Cape Town operations).

Why ZAR 3.2m not ZAR 10m plus?

Well firstly is that we want this model to be successfully at a start-up costs that is not prohibitive. Hence we are looking for the right investor for the business, someone who will get involved and grow the business. Villa Secrets intends to copy this model in many different countries, and the key ingredient in each location is the owner/CEO and his/her key staff.

Secondly, this model is closer to a franchise than the purchase of a business outright. In that there are a few necessary staffing appointments and a marketing and development contribution of about 4.5% of turnover.

However, unlike a typical franchise, the mother company ‘Villa Secrets Ltd’ acts as a marketing and development company. Turning that 4.5% of turnover into more than a 4.5% increase for the business owners.

The result of the above two points drops the estimated shareholder profit in the first year, down to not much more than that was made on the ‘shoestring’ budget approach on 2015/16. However, the investment pays off big in the years that follow.

In a forecast made recently, using what we call ‘Quantum Safe Forecasting,’ which uses the lowest probability applied to all income streams and multipliers we forecast:

Year 1, ZAR 1,000,000 shareholder profit
Year 2, ZAR 2,000,000 shareholder profit
Year 3, ZAR 4,000,000 shareholder profit

You can see the particulars, spreadsheets, and some videos here. However, this is a little out of date as the Villa Secrets income stream was set to be split with Villa Secrets Africa (who will deal with multi leg villa holidays, safaris and flights) 50/50, and now the split is 75/25 in favour of Villa Secrets Cape Town.

In addition, there was a limit on the amount of property mandates of 8 villas. This has now been changed to at least 16. The result, if Villa Secrets Cape Town can achieve 5 mandates by the end of 2017 and 16 by the end of 2019 is:

Year 1, ZAR 1,300,000 plus.
Year 3, ZAR 7,000,000 plus.

We have been asked how we can be so certain of these figures. However, for the answer one needs to look at the detail. In particular the spreadsheets which are complex and are actually a part of the design of the TFBMS software with over 4,000 different variables. All of which have been set to the lowest reasonable probability.

If one wishes to examine, the detail is found at Network.VillaSecrets.com and in particular within the ‘VS Cape Town’ Section.

Villa Secrets Network

One strong reason for not achieving such results but achieving more, lies in the concept that Villa Secrets is a network of businesses that work together, and within Cape Town there will be a number of different businesses.

This concept has been confusing for some. But consider ‘Villa Secrets’ like Hatton Garden, the street that attracts many customers to many jewellery businesses. Or Harley Street for doctors, or Wall Street for bankers…

There are many benefits to working within The S-World Villa Secrets network and few downsides. We are currently focusing on 3 Villa Secrets companies.

1. Villa Secrets – Luxury Villa Rentals – Cape Town
2. Villa Secrets – Real Estate – Cape Town
3. Villa Secrets Africa

One immediate advantage of the network is a large additional marketing and development pool, paying for luxuries from full page ads in Conde Nast Traveller to bidding at position 1 for generic (not in a specific locations) keywords such as ‘Luxury Villas’ in Google & Bing. Not to mention the TFBMS will be developed faster and as a result all profit centres will boosted.

The above points (and others) will increase the amount of bookings that are made on the Villa Secrets website, and so the profit of its rental company.

Where the ‘Hatton Garden Effect comes into play strongest is in Property Mandates. With the power to show clients villas on full page Conde Nast Ads and over ZAR 400,000 budget on other direct marketing, mandates will be easier to attain (a lot easier). In addition, when securing a mandate if one can present a network of companies working together as opposed to an individual, they become easier still.

As for the competition, well yes, there will be competition for mandates. But seeing the brand is ‘Villa Secrets,’ for rental mandates many would wish to be with the company that handles the Villa Secrets bookings, which is this company.

There is another component to mandates. And that is that in each case we only offer the max marketing budget if the owner also agrees the Villa Secrets Real Estate company be given the first shot at the ‘for sale’ mandate when they wish to sell. However, this is moving into the territory of the real estate presentation…

Market Share

What is important is market share, for which we use the symbol ‘ϻ’ within our equations. When including all Cape Town’s holiday villas, luxury villas, and apartments the total value of the market is about ZAR 957,885,420. Which leads to about 143,000,000 in commission. By the end of 2019, in part due to the global marketing Villa Secrets will perform, and the properties we wish to mandate, we expect the marketplace to be ZAR 1,475,560,019 and the commission kitty to be about ZAR 221,334,025

In 2015 CTLV’s gross profit was ZAR 1,400,000, which is close to 1% of the market. However, in year 3 we have a ‘Quantum Safe’ forecast between 14 and 19 million ZAR, a 6.4% to 8.7% share of the commission available.

Villa Secrets

Gross Profit

% of MS

Market (com)

Mandates

Mandates

Bookings

Bookings
VS CT Luxury Rentals

14,221,196

6%

221,334,025

20%

2,844,239

80%

11,376,957
VS CT Real Estate Co.

23,160,796

7%

221,334,025

34%

7,874,670

35%

8,106,279
Villa Secrets Africa

8,000,000

4%

221,334,025

20%

1,600,000

80%

6,400,000
Cape Villas.com

4,000,000

2%

221,334,025

15%

600,000

85%

3,400,000
 

49,381,992

19%

  

89%

12,918,910

280%

29,283,235

The way ‘ϻ’ works in our equation is limited to the growth forecast of any network to a maximum 10% of market share, and the Villa Secret network of companies to 50%. As we can see, currently projections are below this threshold.

There are other companies into consideration which focuses on mandates and other niches (such as apartments in the city, property development and architecture). However, the combined total is 34% of market share. And most of these companies are recruiting new villas which in itself is to increase the market share, as currently there is four or five times the demand for Villas in peak periods than are available, hence each new villa that chooses to let short term as opposed to long term increases the market share for vacation rentals.

Lastly, and whilst this is a complex system, seen here if VS CT Luxury Rentals were to underperform and others over performed, significant additional marketing will be used to boost the company back on target. Not only does the network create new opportunities it also guarantees the success of every company in it.

19 ways Villa Secrets will attract Sole Mandates

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19 ways Villa Secrets will attract Sole Mandates.

By Nick Ray Ball 1st September 2016

A sole mandate is when a villa or apartment owner, trusts one company, or in this case one group/network of companies to market their property and manage their bookings calendar.

cape-town-luxury-villa

The acquisition of property mandates is the biggest non-technical profit centre a Villa Secrets company can create.

In year three of the ‘Villa Secrets Cape Town Luxury Rentals – 2017 to 2020 Financial Roadmap’ income from 8 (mid to high-end) property mandates is the source of 39% of income ZAR 5,500,000 ($340,000).

It’s important to note that over half the income is created from enquiries to the mandated villas own websites or distribution channels which lead to bookings in other villas. As we include this income in our calculations we can afford to dedicate over ZAR 110,000 ($7,500) to each 5-star villa in start-up costs (website and subscriptions) and follow up with an additional marketing budget of over ZAR 150,000 per year ($10,000).

For villas that offer a 3 month ‘for sale’ mandate in addition to a rental mandate to the Villa Secrets Realtors when the client wishes to sell this direct marketing budget can be increased and in particular to include the creation of beautiful print broachers.

For a top end villa (six or seven-star) villa the direct marketing budget increases further, and will include the villa seen in large Ads in magazines such as ‘Conde Nast Vogue or Traveller.’

Compare this minimum of ZAR 110,000 in start-up costs and over ZAR 150,000 per year thereafter to the highest direct marketing contribution of any of our competitors being ZAR 0.00 ($0.00) and we can immediately see one clear Unique Selling Point of Villa Secrets.

Other unique selling points to villa owners follow in ’Many Reasons why a Villa Secrets Mandate is so profitable for a Villa Owner?’

For now, we will present ‘19 ways in which Villa Secrets will acquire mandates’

1. Villa Secrets Property Managers

Villa Secrets will not have its own property management division as such. As many of the local villas and most of the villas we wish to market internationally are in the hands of property managers. Who would not refer our service to the owner if we were offering a rival property management service.

Instead Villa Secrets is creating the CMS (Content Management Suite) for property managers to add their details to our websites in a section called ‘Property Managers.’ So long as we have not had a serious complaint and the managers either have good experience with references or seem very capable any property manager can join.
When Villa Secrets talks to an owner regarding a potential mandate they choose the manager they prefer.

Property managers can be contacted directly via Villa Secrets email addresses that are copied to the Villa Secrets ‘mandate recruiters.’ There is no fee to a property manager for the introduction. But the deal is that Villa Secrets gains the marketing & booking mandate.

Of the top property managers we have proposed this to, all have said yes.

2. Advertising on Google

One of the reasons for having a strong property management page/pages is that when searching for a company to market a villa, most owners first type in ‘Property Management’ into Google. Very few type in Property Marketing.

All our websites will advertise at the top of Google for property management related search terms, which in turn leads to property marketing mandate opportunities.

Adverting in positions 1, 2, 3 & 4 and in addition applying SEO to the property manager pages will see over 60% of people who use Google coming to Villa Secrets. And 75% of people who use Google will visit one or another Villa Secrets company before looking at others.

3. Dedicated Networker / Mandate Hunter

From the word go a dedicated ‘Networker / Mandate Hunter’ has been budgeted for in the Villa Secrets Cape Town Luxury Rentals division. With a salary that increases as the company grows.

Having a dedicated ‘Networker / Mandate Hunter’ will see success given the ammunition this valued staff member has to work with. Note that this staff member will also network with local and international villa agencies and in general look for not only sole mandates but also preferential deals.

4. Villa Secrets Property Database

The Villa Secrets property database was started in 2002 with www.CapeVillas.com, it was added in 2014 & 2015 by the previous managers of www.Cape-Town-Luxury-Villas.com and it contains the contact details for over 200 villa owner who use the Razor Booking System.

Of the 1,400 villas and apartments recoded it’s likely that 400 or more are still active. This collection of villas is a great starting point for the ‘Networker / Mandate Hunter’ to work from.

5. Prospecting

In addition to the Villa Secrets database comes a lot of other sources of villas. Cape Stay, HomeAway, Airbnb, Booking.com, Nightsbridge and Gum Tree to name some of the biggest.

6. Photoshoots, Blogs & Articles.

As soon as ‘Villa Secrets Cape Town Luxury Rentals’ is formed we are hiring a full time photographer and a second copywriter.

Their job is to photograph and create an article for about 150 villas each year. Each time creating an opportunity to show a villa owner or property manager how good we make them look. And each time a great point for the ‘Networker / Mandate Hunter’ to jump in and try to secure a mandate.

7. Enquiries to Villa Secrets Websites

As there will be a comprehensive property manager and ‘advantages of Villa Secrets property marketing’ pages on all our websites, we would expect to gain a few quality opportunities each year from visitors to the websites.

8. Local Press & Leaflet Drops

In 2002 Cape Villas.com started its life as a website and a quality leaflet drop. It will be to our advantage to repeat such leaflet drops and in addition for the ‘Networker / Mandate Hunter’ prospecting door to door.

9. Domestic Scouting

Another way to gain access to Villa Owners is domestically. We are currently working in an informal way with a previous Cape Villas domestic who is providing some very interesting leads, all at the very top end.

10. Villa Secrets Magazine

Following the success of the Cape Villas Magazine and the creation of the Magazine CMS, which will allow us to easily create magazines. Whilst there is a big plan for a mass distribution magazine, a small run of 3, 000 to 5,000 would not break the bank and would be a valuable asset for the ‘Networker / Mandate Hunter’ in two respects.
a. Prime placement in the magazine can be given as reward for an owner giving us a mandate.
b. Distribution of the magazine to all the mid to top end villas and in general to offices and hotels in Cape Town will see new owners coming to us.

11. Villas Cloud

Whilst plans for Villas Cloud (The Villa Secrets Booking System) are not currently expected to start until early 2018. Additional investment (made by others joining the network) will see the project begin sooner.
The Villas Cloud booking system is designed to connect to all distribution channels and provide a very simple and transparent booking platform. There are also plans to buy into or recruit some strategically important existing PMS (Property Management Systems).

This action will greatly improve the chances of securing a mandate for owners and property managers on the systems.

Other Villa Secrets Networks
The Following points are specific to other Villa Secrets Cape Town companies all of whom will also recruit Villa Mandates.

Please note villas are not recruited to an individual company, but instead to the collection of companies in the Network. Where after the company that recruited the mandate will receive 10% of each booking and the company that books the villa will receive 15%.

It is our position that only by working as a team/network, with more competition within that team for the recruitment of villas, can the Villa Secrets Network reach its target of 50 exclusive quality villas or luxury apartments by 2019.

12. Properties Sold by Villa Secrets Realtors

Currently (with the exception of Dogon Group) all Cape Town realtors have either small or no vacation rentals divisions. As a result, realtors who have sold quality properties do not offer a short term rental service, instead offering a long term rental service. This is suitable for some owners, but is not at all suitable for owners who live outside Cape Town and wishes to go on vacation at their holiday homes.

In my experience that has seen Denise Dogon CEO of Dogon Group, Ian Slott MD of Seeff and Senior Directors from Sotheby’s all ask me to create them vacation rental divisions (before I had a plan to do so). It is not the case that big estate agencies do not want or see merit in vacation rentals, but instead that as it’s a different business model for some reason in Cape Town and across the Globe, Estate Agencies do not capitalise on vacation rentals.

One only has to look at Dogon Group to see how an estate agent can capitalise
a. Mandates for Vacation Rentals will mostly turn into mandates for sale, when the seller wants to sell.
b. Some of the biggest properties sold are to clients that originally came to Cape Town on a villa holiday. If the villa rental company they booked their holiday with has a real estate offering, clients will often first look for properties to buy from the company they already know. Particularly of there are properties for sale on their website

Villa Secrets has firm plans to recruit one top local and one top international realtor to the Cape Town Network. The exact framework for this arrangement is fluid. However, the primary profit centres for the realtors is income from securing property mandates for short term rental and property sales made from all rental mandates created with an additional ‘for sale’ option from any Villa Secrets company.

It may be the case that the realtors run their own villa rentals department or the business may be run by Villa Secrets Cape Town Luxury Rentals on a profit share/referral basis.

In the case of mandates for sale that were recruited by ‘Villa Secrets Cape Town Luxury Rentals’ or any non-realtor in the network, the realtor will manage the sales process and pay a referral of typically 25%.

13. Properties Designed by Architects

There are a few architects in Cape Town that have consistently created exceptional homes. The most famous being the internationally known architect ‘Stefan Antoni’ See here or here.

In the same way it is profitable for real estate companies to recruit Villas. It is equally profitable for architectural companies. Albeit there is a lot more in it for architectural companies than simply collecting mandates as a part of M-Systems (as is described at the end of this document).

14. Properties Built by Developers

What works for realtors and architects also applies to property developers, and like the architectural companies M-Systems is a good additional point of interest.

15. Villa Secrets Africa – Villa Marketing Contracts

Moving out of Cape Town and into Africa ‘Villa Secrets Africa’ will attempt to secure marketing contracts for some of Africa’s finest homes, from exclusive use safari lodges to private islands.

Whilst it is early days for this line of enquiry, we are considering that in some or many cases Villa Secrets will work alongside traditional local marketing companies at a rate closer to 5%. And work in tandem with them to achieve the maximum occupancy for the owner.

As with Villa Secrets Cape Town Luxury Rentals mandates, each contract is not only a source of commission, it is a source of bookings, and as such Villa Secrets Africa could afford to be more competitive in this marketplace.

16. Villa Secrets Apartments – Block Contracts

Potentially accessed via developers and architects, but in addition via a dedicated apartments division ‘Villa Secrets Cape Town Apartments Rentals.’

Gaining the marketing rights for a big block of five star villas has the potential to make a lot of money, and as with all mandates exclusive to the Network, increases the stock for Villa Secrets companies to book or sell.

M-Systems

The Following systems are particular to our advanced system design ‘M Systems’ which we have not counted in our projections until 2020. However, that does not mean it will necessarily take so long to create. A lot comes down to how the world of theoretical physics views our business/economics interpretation/simulation of M Theory.

17. System 6 ‘The Theory of Every Business’

The Theory of Every Business is a massive idea, a gigantic real estate resort development from which the S-World Network expends into many other businesses. As many of those that supply and build. Then all of those that trade and work from the development join the network.

The Theory of Every Business was my first book written in 2012 framed around a macroeconomic network of all businesses.

Even a sniff of success in this field will impress villa owners, realtors and most everyone in property.

(See M-Systems & S-World ‘American Butterfly’)

18. System 7. S-World VBN (Virtual Business Network)

Continuing the ‘Theory of Every Business’ theme, S-World VBN, looks in the not too distant future to do a deal with ‘The SIMS’ to create a mass online game, that first creates a virtual world mapped around our real world. Then sees land owners, realtors, developers and even governments upload big and small plots of land. Where after the games use the SIM CITY gaming engine (or an adaptation of the same) to virtually build the different resort developments on the different plots.

As soon as we have enough for the deposit on the land, we will buy it, choose from the various deigns. And reward the designers/game players with a lot of cash. Where after we go into detail, using a combination of the SIMS property rendering engine, which we hope to convince Stefan Antoni and other eminent architects to create and add structure sections and add furniture and other fixtures.

And then alongside the other 16 Unique Selling points presented in ‘The Theory of Every Business,’ Chapter 3 ‘The Locations Butterfly’ and of course the growing Villa Secrets network we sell the houses off plan. This time with the gameplays designing the houses and architects who created the structure sections being paid… A lot.

This will be the first mass online game that will provide a living for many of its users.

Like ‘The Theory of Every Business,’ just a sniff of success in this field, will impress villa owners, realtors and most everyone in property.

19. System 8. S-World VSN (Virtual Social Network)

S-World VSN takes the framework created in S-World VBN and seeks to render the world in 3D. In a framework that can sit within all the social networks.

This idea is steeped in history, from the world first low bandwidth Virtual Tour which I created in 2002 to how S-World got its name in 2011.

From Sienna (my daughter) to the SIENNA ‘Super Intelligent Engine for New Network Access’ networking software to ‘Sienna’s World’ when the networking software was planned to submerge within a 3D Virtual World. Where after ‘Sienna’s World’ was shortened to ‘S-World.’

Technically all we need is to adapt Google (or another’s) cell phone cameras to create virtual tours. Then render the world, and let users jump in and out of each other’s locations via the GPS chips in their cell phones.

Commercial applications range from creating highly accurate (so one can see the view from every window) 3D renderings of villas and other accommodations, to having an e-commerce offering from each shop in S-World, which considering the plan in to map the whole world, is an ecommerce platform for every shop in the world.

Luxury Rentals 2017 to 2020 Financial Roadmap

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CTLV 2017 to 2020

Villa Secrets ‘Cape Town Luxury Villas.com’ 4-year financial road map

By Nick Ray Ball 27th August 2016

Financial-Forecast-2017-to-2020

Elevator Pitch

In 2015 we successfully tested the Villa Secrets Network Prototype ‘Cape Town Luxury Villas.’ Using the 2015 figures as a yardstick, the 2017 to 2020 business plan provides a roadmap to far greater success.

We are adding 3 extra profit centres, (2 additional websites and an initiative to recruit 8 exclusive villas) and developing a state of the art financial, business and marketing system, called the TFBMS.

Collectively creating an extremely profitable business model.

I like to think of this forecast in terms of ‘Good Economics,’ the exercise being to enter the lowest possible outcome for all variables (about 4000) and still come to a profitable conclusion.

In this document I present the 2017, 2018, 2019 & 2020 business plan for the first Villa Secrets Company ‘Cape Town Luxury Villas.com’ hereafter known simply as ‘CTLV.’ Also knows as ‘Villa Secrets Cape Town – Luxury Rentals’

This document is written around 6 spreadsheets and two documents that describe the TFBMS (Total Financial, Business & Marketing System).

TFBMS Part 1 – Total Marketing System
TFMBS Part 2 – Total Financial & Business System
CTLV 2017 Financial Forecast Spreadsheet (Download)
CTLV 2018 Financial Forecast Spreadsheet (Download)
CTLV 2019 Financial Forecast Spreadsheet (Download)
CTLV 2020 Financial Forecast Spreadsheet (Download)
CTLV 2017 to 2020 Financial Forecast Summary (Download)
Villa Secrets Projects ‘to do’ Calendar (Download)

For information about ‘CTLV’ in 2015 Click here

Please watch the following Videos

1. The Summary Spreadsheet (4.48 minutes)
https://youtu.be/cwGYzoBxaao

2. 2017 (First Year) Data Condensed (Tab 1) (8.53 minutes)
https://youtu.be/Y3Rqg6uKUNg

3. CTLV 2017 to 2020 Costs (8.45 minutes)
https://youtu.be/piSe4ofBnSM

4. 3 Villa Agency Websites Income (5.54 minutes)
https://youtu.be/dh99a7gNfKg

5. 8 Mandates and 12 HomeAway and other Subscriptions Income (7.27 minutes)
https://youtu.be/jH6m4nuswVs

6. TFBMS (Total Financial, Business and Marketing System) Multiplier (11.25 minutes)
https://youtu.be/ol2KIA42Q4Q

A written summary follows…

Please open the spreadsheet ‘CTLV Year 1 – 2017 Financial Forecast 3.01’, (Tab 1).

At the top we see the essential info, Turnover and Villa Payments are calculated as 85% of the gross profit, the gross profit being 15% of turnover.

Below turnover we see the Licence Fee which is 25% of turnover. Note that this is not a standard fee, rather a contribution to the collective operations, marketing and development pool. Which until gross profit reaches ZAR 4,000,000 is spent directly on marketing this business.

Next we see ‘Other Operational Expenses’ followed by shareholder discretionary income. However if the owner of the business takes the lead sales roll then this money is effectively shareholder discretionary income. In addition is the ‘Licence Spending Reserve’ which is money due to be spent on marketing that will most likely increase gross profit and shareholder discretionary income by more than the figure presented.

All told we find shareholder discretionary income is just over ZAR 1,00,000, which includes a lot of spending to increase gross profit in future years.

Below we see to see the 4 different profit centres

1. Row 34 ‘CTLV Bookings’ shows the income stream expected from the tried and tested www.Cape-Town-Luxury-Villas.com website.

2. Row 35 ‘Villa Secrets’ shows the income expected from 50% of the Cape Town enquiries from our flagship Villa Secrets website. (This may rise to 75%)

3. Row 36 ‘VillasInCampsBay shows the income expected from the new VillasInCampsBay.com website (Which will be very similar to the Villa Secrets Website, but focusing on Camps Bay and neighbouring areas.

4. Row 37 to 39 ‘Exclusive Mandate,’ ‘HomeAway Only’ & ‘Other Subscriptions’ account for the recruitment of 8 exclusive mandates (collated over 2 years).

5. Row 40 ‘Other Income / Sub Companies’ accounts from other income, such as referral commissions from selling properties. Or income created from sub companies, where CTLV has made a deal with a local specialist, for instance a specialist in Constantia, The Winelands, or the Cape Peninsular. Or a staff member or property manager, whereby ‘CTLV’ will receive between 12.5% to 50% of the sub companies Shareholder Discretionary Cash Flow (SHDCF).

Below the various income streams we find the standard expenses. Followed by the ‘Licence Fee Spending,’ an operations, development and marketing contribution equal to 25% of gross profit (+/-4.5% of turnover). Which for the first year and most of the second is spent directly on marketing ‘CTLV,’ in a way that is more effective that hiring a development or marketing company, as there is no profit made by Villa Secrets on these services.

Consider… the costs of creating a top of the line website for a single villa, the web framework, the website, over 20 pages of content, followed by at least one new page a month, media (at least 3 photos shots and a video), SEO (Search Engine Optimization) and SEM (Search Engine Marketing) and Inbound Marketing. Not to mention placing the villa on the homepage of various agency websites.

Paying agencies and individuals, will most likely result in about 50% of the cost paying for the manpower (the salary of staff) and 50% would be the expenses and profit of the company. However, in the case of Villa Secrets, due too various mechanisms our operational costs are lower and as mentioned there is no profit. As such contributing ZAR 75,000 towards a single villa website with Villa Secrets buys what would cost more like ZAR 150,000 from a commercial agency. And as for the quality, just look at the Villa Secrets website.

A breakdown of ‘Licence Fee Spending’ is provided at the bottom of the spreadsheet, as one can see not all first year spending is currently allocated.

First year un-allocated ‘Licence Fee Spending’ has been added to the first year shareholder discretionary income as ‘Shareholder Discretionary Cash Flow 2’ as seen below. This does not mean it will be paid to the Shareholder, rather that it is due to be spent on marketing or development (for instance if the company secured a 5th property mandate, or advertising of Bing, or content marketing) and that such spending will increase the gross profit by at least the value of the spending.

In addition to the un-allocated ‘Licence Fee Spending’ the salary for the ‘Sales Manager’ has also been added to ‘Shareholder Discretionary Cash Flow 2’ as seen below. (This would change if the owner wished to hire a sales manager, but would be replaced with the salary of one of the other key staff, if he/she wished to occupy that role instead).

Or alternatively if the owner of the business was an investor, the investor would deduct the ‘Sales Manager Salary’ from the ‘Shareholder Discretionary Cash Flow 2,’ note however an investor should be looking at years, 2, 3, & 4 not year one and in addition, the investor would need to distribute between 25% and 50% of their shares to the operations team.

Year 1 422,769 Shareholder Discretionary Cash Flow 1
Plus 385,059 Sales manager Salary
Plus 195,177 Licence Spending Reserve
Total 1,003,005 Shareholder Discretionary Cash Flow 2
Worst Case (-15%) 852,554 Shareholder Discretionary Cash Flow 2
Best Case (+15%) 1,153,455 Shareholder Discretionary Cash Flow 2
Year 2 1,615,894 Shareholder Discretionary Cash Flow
Plus 471,929 Sales manager Salary
Total 2,087,823 Shareholder Discretionary Cash Flow 2
Worst Case (-30%) 1,131,126 Shareholder Discretionary Cash Flow
Best Case +(30%) 2,100,662 Shareholder Discretionary Cash Flow
Year 3 4,034,201 Shareholder Discretionary Cash Flow
Year 3 After POP Investment 3,200,000 Shareholder Discretionary Cash Flow
Worst Case (-45%) 2,218,810 Shareholder Discretionary Cash Flow
Best Case (+45%) 5,849,591 Shareholder Discretionary Cash Flow
POP (SHDI Over 3,200,000) 834,201 Investment into New Companies
Special Projects 355,299 The Sienna Foundation (Charity)
Year 4 5,037,008 Shareholder Discretionary Cash Flow
Year 4 After POP Investment 3,200,000 Shareholder Discretionary Cash Flow
Worst Case (-60%) 2,014,803 Shareholder Discretionary Cash Flow
Best Case (+60%) 8,059,213 Shareholder Discretionary Cash Flow
POP (SHDI Over 3,200,000) 1,837,008 Investment into New Companies
Special Projects 1,372,606 The Sienna Foundation (Charity)

Note on the above, ‘best case’ and ‘worst case’ are based on ‘quantum forecasting’ detailed at the bottom of this document. In actual fact the ‘worst case scenario is the scenario we see in red, as in all (over 50 different) cases where we have made an estimate, we have done so from a ‘worst case’ scenario. For instance, the base of all Agency forecasts is the ZAR 1,431,000 gross profit created by ‘CTLV’ managers in 2015. However, the figure used to create the above figures was only ZAR 1,000,000.

Another clear example is the effects of the TFBMS (Total Financial, Business & marketing Systems) part 1 The TMS and part 2 The TFBS which present over 40 systems that boost profitability. The effects and percentages seen on the TFBMS pages are for the system as it will be in December 2019, each has a low and a high effectiveness and in each case we have used the low case, and lowered the effect further in line with the development schedule.

Going back to year 1…

All the workings for the first summary page on the spreadsheets are found on the second tab of each spreadsheet, for example ‘CTLV 1st Year 2017 Complex.’

Most details in these tabs are be explained via videos.

The Initial Data (Baseline figures)

The initial data is found at about column ‘AQ’ row ‘179’ in 4 sections.

1. ‘Low estimate for CTLV Gross Profit’ ZAR 1,000,000

This is the baseline figure for all agency website projections: The ZAR 1,000,000 is then broken into monthly segments. Please note that actual 2015 figures were over ZAR 1,400,000.

We have lowered the figures out of caution, but also in respect of
a. 2015 had some role over bookings included, bookings that were originally requested in late 2014 but only closed in January.
b. 2015 figures and has some goodwill factored in from the a few returning clients from April to December 2014.

Note in both cases we should by rights increase the baseline The ZAR 1,000,000 back to ZAR 1,400,000 in year 2 (2018). However, we have not done so, it remains at ZAR 1,000,000 and never moves above this point. This is specifically due to ‘Quantum Forecasting,’ which sounds complicated but it is not. Simply put ‘the best way to make sure one achieves a projected profit target, is simply to lower the projected profit target.’ Note that the original 3rd year profit forecast was for over ZAR 8,000,000 however due to always using low estimates it is now about half. That does not mean we expect to make half, rather that we are confident we will not make less that what has been projected.

2. ‘Villa Mandate.’ ZAR 213,304

For the actual working behind this please look at Tab 3 ‘1 Villa Mandate R7,500’ this tab shows the calculation of each mandate is based on a villa that charges R7,500 per night in low to mid-season (for instance March and November), which is pretty much the lowest priced villa we would wish to represent. To put this in context a Stefan Antoni Villa (as is what we desire for the mandated villas) have low to mid-season prices of R30,000 to R60,000. If CTLV’s portfolio of 8 villas were similar, the income forecast would increase by as much as 8 times.

Each year that passes we raise the low to mid-season rate by R2,500 a year.

Note also that the occupation is lower that would be expected and the commission is shared 50/50 with other companies in the network, affiliates and booking channels.

Lastly note the important ‘Additional bookings made from enquiries.’ This comes from enquires for the Villa that end up as bookings for other Villas. In our recent tests with HomeAway we found that most booking requests for Villa ’22 Geneva’ ended up as bookings for different villas.

3. Low estimate for 1 HomeAway.com Subscription ZAR 80,000

This figure is in respect of an experiment we are doing with HomeAway Platinum subscriptions that cost about ZAR25,000 per year per property. Cape Villas started in November 2015 and have so far generated ZAR 80,000 with 2 months left to go. We have used ZAR 80,000 as our baseline figure.

4. Estimate for 1 Cape Stay and Quintessentially Subscription ZAR 35,000

Same as above but for Cape Stay and Quintessentially or other subscriptions channels as we see fit, we do not have a baseline figure for these.
…

After the Cape Stay and Quintessentially section we come to Google AdWords costs for CTLV in 2015. Which I have increased by 15% for 2017, 35% for 2018, 50% for 2019 & 75% 2020.

Also note that within the working on the ‘Complex’ pages the budget for Villa Secrets Google AdWords is 50% higher still.

The TFBMS (Total Financial Business and Marketing Software)

Directly above the ‘Initial Data’ at column ‘AL’ row ‘116’ we find the TFBMS effects split into 3 sections.

1. The TMS (Total marketing System)
2. The TFBS (Total Financial & Business Systems)
3. M-Systems (16 Systems based on M Theory)
In row ‘AL’ we name the system, and in Row ‘AM’ we see the effect of that system applied to the ‘Initial Data.’ The percentage seen is the effect at the end of the year. This gain is then entered to the right, see rows ‘AQ,’ ‘AV’ and ‘BA’ etc… In January the first effect (row 116) ‘Bing PPC Advertising’ is at 50% which creates an effect of 1.8% to the baseline R1,000,000. Then in February in column ‘AV’ is at 100% which creates an effect of 3.5%.

In the rows below we see the effects of the TFBMS, the development order of the components are presented in ‘Villa Secrets Projects ‘to do’ Calendar.’

Each year the total power of the effect is increased, see columns AI (year 3), AJ (year2) & AK (Yaer1). The maximum effect being 100% in year 3.

In addition from Row 165 we see the effects of M-Systems. For the first 3 years we have only included the effect created from the other companies in the network. Such as that of real estate companies joining the network and recruiting mandates that ‘CTLV’ can exclusively offer to their clients without worry of the client finding the same villa from another source.

Year 3…

Please look on spreadsheet 3 ‘2019’ and scroll to the 12 month, column ‘CV’ row ‘116.’ Here we see the effect of the TFBMS in December 1999. Each effect is detailed at this point on the TFMBS documents. In each case, on the TFBMS docs we have a low and high effect. In all cases we have used the lowest forecast. It is expected that some or even most of the 44 components will fare a lot better than the low estimate.

Moving down to ‘CV’ ‘166’ we see the cumulative effect of the TFBMS and M-Systems. To increase the baseline figures by x 328.3%. Specifically, the ZAR 1,000,000 made via CTLV in 2015 via leads form Google would make ZAR 4,282,500 in Dec 2020 (x12).

In justification of the ‘328.3%’ please consider the following.

1. The CTLV 2015 gross profit was created using only Google AdWords (65% of GP) and a little SEO (25% of GP)

The TMS (Total Marketing System) in December 2019 also include:

a. Mountains of SEO (Search Engine Optimization)
b. Truckloads of SEM (Search Engine Marketing)
c. A near obscene amount of Content and Inbound Marketing
d. More than one Villa Secrets Magazine distributed globally
e. Monthly Villa Secrets Magazine Ads in publications such as Condé Nast Traveller
f. Billboard Ads
g. Hundreds of Videos
h. Bing Advertising
i. A huge amount of Re-Marketing
j. 25% of the contributions to Villa Secrets used to buy and send previous clients gifts, sometimes barters with brands like Bulgari for placement in the magazines, where the gifts are purchased by Villa Secrets Gifts from Villa Secret publishing for a quarter of their recommended retail price.
k. A ton of Social Networking
l. Significant Affiliate Marketing

To think that items ‘a’ to ‘l’ would only create as much an effect as the Google AdWords and the little SEO done in 2015 would be quite ridiculous, but let’s work at that low

So increase by 100% which we need to add to the original figure so making 200%

2. In 2015 for every 20 visitors we had to the website, we had one enquiry, one of the purposes of the TFBS is to decrease this ratio to one in 10 or fewer.

Hence another 100%, as the effect is cumulative (it effects all previous figures) this effect doubles the gross profit making 400%, this is already more that we have accounted for.

3. Next we consider that one enquiry in four creates a booking and that another role of the TFBMS is to improve this stat to one in two. This doubles gross profit again so making an 800% difference.

4. Lastly we should factor in non TFBMS income such the initial reduction from ZAR 1,4000,000 to ZAR 1,000,000. Plus, Inflation which in Cape Town is about 8% a year, and whilst we have more than factored this into the costs we have not included this within income. Plus, income from sales referrals and bookings outside Cape Town and lastly any income created by forming sub companies, which could be a lot.
All totalled we are looking at an expect gain of over 1600%, however due to ‘quantum safe forecasting’ we are reflecting an effect less than a quarter of the potential.

See the 2017, 2018, 2019 & 2020 summary spreadsheet for a breakdown of the above.

Considering the above we see that we are presenting a very safe forecast.

M-Systems ‘Quantum Safe Forecasting.’

M Systems are systems within the network based on inspirations from applied mathematics & theoretical physics.

In this forecast I have simulated four qualities of quantum mechanics, and please note that Professor Stephen Hawking says,

‘Quantum mechanics agrees with observation, it has never failed a test and it has been tested more than any other theory in Science.’

Quantum Mechanics is not a theory, it is the mathematics that powers everything digital, from cell phones and commuters to digital clocks.

Note; I am not working specifically in quantum mechanics rather looking to simulate/mimic the effect or benefit.

By working this way I have created a safer forecast. The original forecast was more than double in the 3rd year and whilst it seemed mathematically accurate, it did not account for worst case scenarios.

Fortunately, I have been working on a better forecasting method as a part of M-Systems Pt 4 ‘The Peet Tent & The MCQPS’ and I had the aid of Professor Stephen Hawking and Leonard Mlodinow’s 2010 book ‘The Grand Design.’

Quantum forecasting…

An extract from Professor Hawking’s & Leonard Mlodinow’s book follows (in regard to the Heisenberg uncertainty principle.)

Or stated simply: The more precisely you measure speed, the less precisely you can measure position and vice versa.

Point 1. Lower the baseline figures to create a greater chance of achieving a result equal to or higher than the forecast.

Converting this to business and economics I equated the position to time: 1 year, 2 years, 3 years (which is correct, as time is a position). Then I equated momentum to gross profit. (which is a generalization, but it seems to work). From this perspective to increase certainty I simply needed to decrease the gross profit forecast. Hence the ZAR 1,400,000 CTLV 2015 gross profit was lowered to ZAR 1,000,000 and all other initial input/ base math points were also lowered.

I appreciate that this is a very simple thing. However, I had not done this in the first instance and only by following the above math example did I arrive at the current projection.

Point 2. Again from Professors Hawking & Mlodinow:

‘If you half the uncertainty in position you have to double the uncertainty in velocity’

To accommodate this I considered that I would add an additional variable to the first year’s figures of 15%, then doubled the variable at 2 and 4 years. This is where we get the ‘Worst Case’ and ‘Best Case’ figures from in the spreadsheets Summary

Year 1 422,769 Shareholder Discretionary Cash Flow 1
Plus 385,059 Sales manager Salary
Plus 195,177 Licence Spending Reserve
Total 1,003,005 Shareholder Discretionary Cash Flow 2
Worst Case (-15%) 852,554 Shareholder Discretionary Cash Flow 2
Best Case (+15%) 1,153,455 Shareholder Discretionary Cash Flow 2
Year 2 1,615,894 Shareholder Discretionary Cash Flow
Plus 471,929 Sales manager Salary
  2,087,823 Shareholder Discretionary Cash Flow 2
Worst Case (-30%) 1,131,126 Shareholder Discretionary Cash Flow
Best Case (+30%) 2,100,662 Shareholder Discretionary Cash Flow
Year 3 4,034,201 Shareholder Discretionary Cash Flow
Year 3 After POP Investment 3,200,000 Shareholder Discretionary Cash Flow
Worst Case (-45%)  2,218,810 Shareholder Discretionary Cash Flow
Best Case (+45%) 5,849,591 Shareholder Discretionary Cash Flow
POP (SHDI Over 3,200,000) 834,201 Investment into New Companies
Special Projects  355,299  The Sienna Foundation (Charity) 
Year 4 5,037,008 Shareholder Discretionary Cash Flow
Year 4 After POP Investment 3,200,000 Shareholder Discretionary Cash Flow
Worst Case (-60%)  2,014,803 Shareholder Discretionary Cash Flow
Best Case (+60%) 8,059,213 Shareholder Discretionary Cash Flow
POP (SHDI Over 3,200,000) 1,837,008 Investment into New Companies
Special Projects  1,372,606 The Sienna Foundation (Charity) 

Point 3. Again from Professors Hawking & Mlodinow

One of the main difference between classical and modern physics is the Feynman Sum over histories, (M-Systems Part 14 ‘Angel Cities’). It’s a complex point in quantum mechanics but in M-Systems its simple. We start at the point we want to reach and work backwards.

As whilst the outline for these projection and the road map for the next three years was started in 2016 and written out to 2019. The version we are now working with starts in December 2019 and worked its way back to Jan 2017 (where after which we went forwards again to 2020).

One of the main advantages of working in this way is staffing and logistics. As we start with the staff & logistics model for 2019 and worked backwards. The result being that we really want to keep the main 3 key staff, and that we should look for smart people who can grow into the roll, (with little or no experience in the industry) where after we peg their salaries and commissions to gross profit so they can increase their salary year on year, which is essential if we are to keep them happy. An additional note on this point is the creation of sub companies by key staff as a further incentive to keep them.

Point 4. is from a part of the original M-Systems design, the ‘PQS’ (Predictive Quantum Software) circa 2012 and the MCQPS (Monte Carlo Effect Quantum Probability Software). Which is used to increase the power in nuclear reactions that by testing every possible outcome a reaction could follow, and keeping the reaction within parameters that worked.

This is the most useful of the quantum influences and is why the 43 different components in the TFBMS have a low and a high forecast and why we have worked on the low forecast for each effect in years one to three.

In year 4 we turn the dial up by 25%. This can be considered as another year’s work pushing the TFBMS minimum forecasts up by 25%. Alternatively, it can also be considered as an account of new systems we think of during the journey. In actuality it will be a combination of both. In addition, in year four we start to factor in the effects created via M Systems.

M-Systems POP (The Pressure of Profit Investment Principle)

‘Financial Gravity’

For a more detailed description of POP please look M-Systems points 5 ‘POP’ and 9 ‘High String Coupling.’

For now, we shall just discuss the effect POP has on the projections, please see below the sections ‘Year 3 After POP Investment’ and the sections in yellow.

POP is the founding mathematics of the network, simply put, when a shareholder reaches their POP point, which in this case is currently equal to the original financial contribution/investment of ZAR 3,200,000 once the shareholder is generating more than ZAR 3,200,000 the additional profit is used to invest per ‘POP’ method, typically a real estate development or new Villa Secrets companies in different locations or new S-World companies in the same location.

In theory, by working in this way the owners of the first hundred or so Villa Secrets companies will end up owning and receiving dividends from hundreds of other Villa Secrets companies and eventually thousands of S-World companies.

Year 3 4,034,201 Shareholder Discretionary Cash Flow
Year 3 After POP Investment 3,200,000 Shareholder Discretionary Cash Flow
Worst Case (-45%)  2,218,810 Shareholder Discretionary Cash Flow
Best Case (+45%) 5,849,591 Shareholder Discretionary Cash Flow
POP (SHDI Over 3,200,000) 834,201 Investment into New Companies
Special Projects  355,299 The Sienna Foundation (Charity) 
Year 4 5,037,008 Shareholder Discretionary Cash Flow
Year 4 After POP Investment 3,200,000 Shareholder Discretionary Cash Flow
Worst Case (-60%)  2,014,803 Shareholder Discretionary Cash Flow
Best Case (+60%) 8,059,213 Shareholder Discretionary Cash Flow
POP (SHDI Over 3,200,000) 1,837,008 Investment into New Companies
Special Projects  1,372,606 The Sienna Foundation (Charity) 

In addition, as seen in ‘Special Projects’ the 25% of turnover marketing and development contribution is used for ‘Special Projects’ of philanthropic, scientific, ecological or social intent.

Currently (and this could change soon) the POP investment for the owner of ‘CTLV’ is optional, but the ‘Special Projects’ funding is not, as it is this funding that I am most interested in. Consider S-World and Villa Secrets as a next generation ‘Bill & Melinda Gates Foundation’ as this was a big influence. And consider not one company but millions of companies contributing in the same way.

And further consider that had I made this contribution to myself not ‘for benefit’ no one would mind. Indeed, many would say it was a great way of showing investors that I believe in the product and the forecasts, as only after each company does very well do I get paid, albeit I then give this money away, but that’s beside the point. The point is it’s a fare levy for any business owner to pay. And it also incentivises myself and anyone else in S-World to make each company as profitable as possible.

Villa Secrets Global Network

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Best Internet Concept of global business from concepts series

Villa Secrets Global Network

by Nick Ray Ball 26th Aug 2016

Villa Secrets has always been a global plan, we have over 200 good web domain names and intend to first branch out and create local networks in LA, Hawaii, St Bart’s, St Tropez and Bali and later create networks in every single location that would sell or rent high end real estate.