Villa Secrets & CTLV V6.01 – Memo Summary

Villa Secrets & CTLV V6.01 – Memo Summary

By Nick Ray Ball 13th December 2016

cltv-villasecrets1

Welcome to Villa Secrets & CTLV, (Villa Secrets Cape Town Rentals)

I am looking for a team to run our CTLV www.Cape-Town-Luxury-Villas.com website and the Cape Town operations of our new flagship website www.VillaSecrets.com alongside other opportunities.

I have created a simple version of a complex business plan based on previous financial results from CTLV, expected results from CapeTown.VillaSecrets, and importantly winning four or five exclusive property mandates each year, for which we have a strong initiative.

1. Sole Mandates

sole-mandates1

We have a strong mandate recruiting plan presented in this video, Villa Secretes Magic Mandates (5.20 minutes) and this summary.

In the current mandate acquisition plan as applied to the financial forecast , we have allocated 10% of Gross Profit be paid to either a dedicated staff member, or shared between freelance recruiters. We have 19 different ways that we can attract sole mandates. And the cherry on the top is our development and marketing initiative for each property. Which sees us to spend as much as $75,000 (ZAR 1,000,000) over three years developing awesome websites and marketing them. And in so doing, we would likely double the amount of income generated as each website becomes a new source of enquires, great for the owner of the villa. But in addition, the website will create many enquires for popular dates. Which once the particular villa is booked, can be used to book other villas.

As each individual villa website has a strong content marketing plan (the only SEO Google approves) each villa website will act as a kind of gravity. Boosting the ranking of the parent agency, pushing its main websites up in the search engine rankings.

Over the years that the property is marketed. A special marketing pack for estate agents will be created for use if/when the owner wishes to sell. Wherever possible, we would try to secure the first option for sale mandate alongside the villa rental mandate. This would make a sense for villa owners, as the use of the ‘marketing pack’ created can only assist the sale process, and in some cases the right marketing could literally add 50% to the value of the home. If say it became an exclusive Villa Hotel, known to be frequented by celebrates and or prominent business persons. And on a lessor scale being seen in the right magazines like Conde Nast Vouge and Traveller, and having had exclusive brands shoot their adverted at the property. Villa Secrets will make this happen and create 100 packs of magazine and DVD’s showing designer adds and other TV coverage. Add to that a website way beyond any competitor, imagery to due for and our estate affiliated agents will have significant ammunition.

It is our desire to have one of Cape Town’s top 4 realtors within the network in early 2017. If so, all for-sale mandates created by any Villa Secrets network company would be in the name of the Villa Secrets realtor. Who would pay a 25% referral fee to the referrer (Note: currently between Cape Town estate agents the referral fee is usually 50%).

2. Three-year Financial Forecast

financial-forecast1

There are many variables to consider within any financial forecast, not least the quality and strength of the team running the business. The business requires a good sales person and a good networking sales person. It also needs a copywriter/sales person. And between these three directors/staff the property portfolio needs great attention.

Given we have the above staff and 12 sole mandates are won over 3 years’ the financial forecast is:

1. Year one: Shareholder Profit = $67,000 (R925,000) 4 mandates (TFBMS Boosting not included)
2. Year two: Shareholder Profit = $141,000 (R1,950,000) 8 mandates (TFBMS Boosting not included)
3. Year two: Shareholder Profit = $218,000 (R3,000,000) 12 mandate (TFBMS Boosting not included)

Note: Shareholder profit, or shareholder discretionary profit is the revenue after all costs except corporation tax and the owner’s salaries. Gross Profit is the revenue after the cost of the villa has been paid to the owner. Franchise fees/contributions are turnover, what registers in the tills and enters the bank account

The math is very simple. The more mandates one can sign, the great profit one will make. And in general, one should expect to make 25% of gross profit as shareholder profit.

Unlike the previous two projections: 3 year plan V4 & 3 year plan V5 we have not included the effects of the TFBMS software. As this added a layer of uncertainty for the licensee, now the only significant variable or point of uncertainty is in the acquisition of mandates. Which puts the fortunes of the company firmly in the hands of the operator.

Download the Spreadsheets…

CTLV 2017 | CTLV 2018 | CTLV 2019.

Click Here to watch a 15 minute video about the spreadsheets

Important points to note are:

1. 20% of gross profit has been allocated to running expenses, such as an office and support staff. This can either be the company spending this money directly, or a contribution to a collective, which is more efficient, but can only be actions when there is a collective.

2. 25% of gross profit is assigned to S-World Villa Secrets for mandate costs, guest gifts, print media, video production, web development, content marketing, print media, advertising, SEO, software, and systems development.

It is important to note that after three years this income becomes discretionary income to Villa Secrets, the equivalent of a +/-4.5% franchise fee.

3. 10% of gross profit is assigned to mandate recruitment.

4. Strong Google Awards and remarketing campaigns for the primary websites and all individual villa websites are included in the calculations.

3. Value & Cost of the CTLV & Villa Secrets Opportunity

value-cost1

Based on the 2015 figures, Alders Atlantic business brokers valued CTLV at $230,000 (ZAR 3,200,000). If CTLV is worth ZAR $230,000 with three years more work and a far more sophisticated look and better systems Villa Secrets Cape Town is worth more.

However, as we are keen to create a working model/prototype that we can show internationally we are very flexible on cost. Our first concern is not the price we receive, rather the commitment to staff and marketing and in general we are looking for individuals or a team who are enthusiastic and  excited by this project.

A lot depends on the individuals who would be directors and the team they would create. Here are some scenario’s

1. If Managed by one of Cape Town’s leading real estate companies

Most real estate companies do not have winning vacation rentals departments, and would welcome the opportunity to generate an income, and offer this service to their clients. However, it is the magic mandates initiative that will mostly excite the higher echelons of such companies.

Working with a real estate company is desirable. As the first phase of international opportunities is planned to roll out via real estate companies and we wish a working prototype. And in addition, we are on a different platform working on a big idea for a series of resort developments. We desire to create a network of top end estate agents who, given a good or great product have the contacts to sell such a development off plan.

The advantages of working with a real estate company are:

a. They already have quality staff skilled in securing mandates and a big pool of owner contacts.
b. As all Villa Secrets companies in Cape Town will seek to create ‘first right of sale’ extension to their rental mandates for the Villa Secrets Realtor. The Realtor will see all other Villa Secrets Cape Town Villa rental companies as contributors not competitors.
c. In addition to the rentals, we can create various ‘for sale’ website and connect to the realtor’s database to display their most expensive properties on Villa Secrets.
d. Access to clients who would be interested in investing into an attractive resort development prospect, if it was a good or great deal.
e. Real Estate companies already have offices in different locations in Cape Town. Which is very useful for Local SEO and in general having a place to kick off from.
Cost from $100,000 to $350,000 (R1,400,000 to R4,800,000) depending on the commitment in staff, adverting, the amount of Camps Bay and surrounds sales they made in 2016 and if their high profile sales staff and directors are motivated to recruit Villa Secrets magic mandates.

In addition, we would be looking at the opportunity for the realtor to expand out into South Africa, Africa and Beyond.

2. Managed by an existing small villa agency or set of individuals

Whilst the realtor option is desirable from an international model perspective, we are also keen to talk with individuals that are in the industry: property owners, property managers and/or small niche villa agencies.

In this plan we desire a merger of sorts with the current ‘bookings’ business of the small agency or individual to become a part of the new CTLV Villa Secrets company. A company that will be fully owned by the individual or small agency.

The value of the existing business will be considered as part or full payment for the Villa Secrets CTLV opportunity.

In this scenario profits increase as the business from the licensor’s original business are added to the profits made from Villa Secrets CTLV.

In some cases, it would make sense to split this opportunity between two individuals, an individual with strong sales skills and an individual with strong mandate recruiting and portfolio management skills.

Cost depends on the value or potential of the parties existing business, be it rental, property management or other

3. Managed by a big villa rental company

The one problem with this scenario is the conflict over villa rental mandates. If this conflict can be worked around, then there is good reason to work with a big villa rental company. As such a company, it would be well positioned to follow the Villa Secrets International growth model and create their own international villas network, maybe… www.VillasCafe.com.

The start-up costs in this scenario would depending on what staff are assigned to the venture and what agreement was made over mandates.

Cost from $150,000 to $350,000 (R2,000,000 to R4,800,000) depending on the commitment in staff, adverting and if their high profile sales staff and directors are motivated to recruit Villa Secrets magic mandates.

In addition, we would be looking at the opportunity for the company to expand out into South Africa, Africa and Beyond.

4. Managed by an existing Cape Town tour operator & safari specialist

The advantage in this scenario is that such an operator will already have a client base, and an affluent one. Plus, adequate office space and experienced management and admin.

One would need to add a mandate recruiter and assign at least one sales staff to the venture.

In addition, unless there is already a contact in place, we would like to see whatever villa rental division the company already has integrated into their new Villa Secrets venture.

As well as the CTLV and Villa Secrets opportunities, such a company could attain the rights for Villa Secrets Africa bookings. So long as they were willing to do the desired advertising.

Cost depends on the value or potential of the parties existing villa trade, and if the Tour Operator would be keen to be more proactive in presenting villas to their current clients, after we contract.

Important to consider is that we would be talking about Villa Secrets Africa bookings as well as Cape Town, and in terms of Villa Secrets Africa we desire a $250,000 (R3,400,000) budget, ring fenced for Google Ads (for keywords not in Cape Town ) spent over 24 month. A budget that we are confident will lead to a good amount of big bookings.

5. Manged by an individual with strong sales or networking skills who does not knows the industry

Cost from $150,000 to $350,000 (R2,000,000 to R4,800,000)depending on the commitment in staff, adverting and if their directors are motivated to recruit Villa Secrets magic mandates. 

6. Bought by an investor

The investor option is for 50% of the company, where after the other 50% is assigned to management.

This option costsstart at $250,000

4. Other Opportunities

other-oppurtunities1

1. 50% of Kapstadtvillas.com

One has the opportunity to invest into and own 50% of Kapstadtvillas.com, the balance being owned by the operations staff and management, who will deal with enquiries.
This website and the addition of a German speaking department who can also deal with German speaking clients from CTLV and Villa Secrets has the potential to make a far greater income than CTLV. Plus, it’s another great way to attract mandates as a German property owner would much prefer a German property manager.

For 50% of this opportunity, we are only looking to cover the costs. Being staff/directors salary for 6 months, the website development cost and the translating. $55,000 (R 750,000) buys 50% of this opportunity and one would expect to recoup all to this investment in the forecast 2017/2018 season.

2. 25% of Cape Villas.com

Cape Villas.com was created by myself between 2000 and 2002. From 2005 to 2010 under my leadership it was the market leader and it is still well respected today. 25% is available for $150,000 (R 2,000,000).

This cost includes upgrading the Cape Villas.com website to our new Villa Secrets web framework.

3. 50% to 100% of VillasInCampsBay.com

Currently this website is online, but its only there to show a presence to Google. The actual website will be very similar to Villa Secrets.

Like Kapstadtvillas.com, there are strategic reasons why this particular website will do well. And in particular, we expect this website to do well on Google, Bing organic and local search results.

This opportunity is negotiable, depending on what staff and team becomes available. But in general we would accept 50% for $36,500 (ZAR 500,000) or 100% for $90,000 (R 1,250,000)

Note: this website was featured in version 4 of this business plan

4. South African and International websites

We are preparing templates for many international villa websites in 2017. It makes a lot of sense for someone who knows the Villa Secrets systems to invest the start-up costs and own 25% of several international websites. If one has Villa Secrets websites in 8 different locations, one qualifies for an international master website, a lucrative opportunity.

5. The Villa Secrets TFBMS

Total Financial Business & Marketing Software

the-tfbms-software1

The TFBMS is an advanced software design currently presented in two parts:
The TMS Total Marketing System
The TFBS Total Financial Business System

The TFBMS becomes a powerful profit multiplier, increasing enquires, increasing conversion rates, and saving money on administration. In the previous two financial forecasts, the effects were included into the forecast and profits nearly doubled, See Plan 4 and Plan 5

However, in this forecast we have not included its effects. They are to be considered a bonus. But if the effects are as predicted, a larger Google AdWords spend is required

6. SWOT Analyses

(Strengths, Weaknesses, Opportunities & Threats)

swot-analysis

1. Strengths

a. Beautiful Villa Secrets: Villa Secrets is a notch above its competitors, from the homepage to the search pages, and in particular the induvial villas pages. In an industry where in 99% of cases the client purchases from the look and description as presented on a website, looks count.

b. Super Simple CMS pages: The advanced pages you see in the links above can be made by any staff, intern, or if one happens to have a bored seven-year-old at home…

c. Expert Google AdWords campaigns: In general, for every dollar we spend on Google AdWords we return three or four dollars. I have 14 years’ experience with Google AdWords and will personally make each campaign.

d. SEO: Whilst it’s been a long time coming, we are now starting to see some good SEO results. Nowadays in the UK, local results show before organic results. By my recent efforts, Cape Villas has recently climbed to number 2 in Google UK for the keyword ‘Cape Town Villas.’ And CTLV has done the same for the keyword Cape Town Luxury Villas. Plus, it is at number 2 in organic results.
Given an intern to follow my general SEO instructions, we could do a lot more.

e. Years of Experience: I have been creating winning websites and mentoring sales staff in the Cape Town Villa industry for over 16 years.

f. Online booking and live availability: In 2014 we connected to Cape Town’s largest villas database ‘Razor’. We are currently doing some maintenance, as currently we can’t search by date. But in the not too distant future this system will be working
and will be a great asset. We have also just started to integrate into the Nox Rentals Nitro System and plan to integrate to Nightsbridge in 2017.

2. Weaknesses

a. Poorly Organised Property Portfolio: Whilst there is a wealth of villas on the site, the portfolio is not well managed. However, this weakness can be turned into a strength given a dedicated portfolio manager.

We recently appointed a great photographer who is going through the contacts list. We need to add a copywriter and a villa networker.

b. No Villa Mandates: There are currently no exclusive mandates, as the current team have not applied themselves in this area.
However, as we have read above we have a strong mandate initiative ready for the new team. In addition, we have the 10% of gross profit incentive for recruiting mandates. In further addition is the strong desire for Villa Secrets to have a networking mandate recruiter as one of the key players in the new company.

c. Poor Financial System. Currently we work on Pastel accounting and spreadsheets, which is not a great system. However, a tailor-made financial system is in the development que and can be prioritised, which would again turn this weakness into a strength.

d. No Office:
This weakness is easily address and the money for same is included within the start-up funding and the 20% of Gross Profit assigned for such expenses.

3. Opportunities

a. State of the Art Mobile Website: Whilst it will not be ready before the end of January 2017, one can already see the mobile site of Villa Secrets and appreciate that its well on its way. Mobile is not only the future, it is the right now, with over half of all users looking via portable devices.

The opportunities are two-fold: Firstly, we can advertise on Google Mobile. Secondly, our clients will likely look at our site on mobile at some point and where most others fall flat on their face, we shall excel

b. The TFBMS: As presented earlier this software in development can double the profit.

c. International Opportunities: No matter which type of business owner comes on board, after he/she has settled and become comfortable with our systems; they have the opportunity to create international companies and eventually run their own international villa rental agency.

d. The Villas Cloud: The Villas Cloud is the name for our second generation booking system. We created one in 2005 and it served us well. However now, in the days of many different property managers and property management databases, a more sophisticated system is required. Including linking with many (and in time all) other bookings systems. Plus, it will assist in the recruitment and management of mandates as well as connect villas we manage to booking channels.

e. The Property Managers and other Networks:
We are developing a S-CMS (Simple Content Management Suite) for property managers to add their services, which will create a great landing page for anyone searching for property managers. The deal with property managers is that we will not change a referral fee if they get a property manager’s contract. But we will manage the bookings calendar and marketing.
Alongside property managers we shall be creating another CMS for other syngeneic companies and individuals, from architects to concierge companies.

4. Threats

In general, we like to turn each treat we find into an opportunity by careful planning…

a. Airbnb: Everyone is talking about the threat of AirBnb, and rightly so…
However, on our current network VillaSecrets.com homepage, which will soon be moved to the ‘S-Web’ menu, we present good reasons for Airbnb being an opportunity. In particular, as it is introducing many new villa owners to short term letting.

b. Other companies like Airbnb: One can never rule out other new companies in any web based industry coming into play and disrupting the market. Indeed, you are reading the business plan of a company that intends to do just that. However, this threat applies to every online industry, and to decide not to do business for this reason would be to decide not to do any business that is internet driven.

As for the current market players, HomeAway, Booking.com and others; whatever damage there is to do has already been done. And like Airbnb, used it the right way, such competitors can become opportunities. We are talking to HomeAway about integration and will be creating Villas Cloud in a compatible language and in time we shall also talk with Booking.com and most others.

c. Market Share 1. Local competition: Given that CTLV and Cape Villas only have about 3% of market share, whatever threat there is from local competitors has already manifested. The big company Nox Rentals who we estimate has about 40% of the market will of course continue to develop and continue to prosper, and we wish them well, indeed they are invited to this opportunity. However, the rest of the competition have few plans and use old technology. As such there is a lot of room in the market for CTLV Cape Villas and Villa Secrets to grow.

 

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Villa Secrets & CTLV V6.02 – Quick Summary

Villa Secrets & CTLV V6.02 – Quick Summary

By Nick Ray Ball 13th December 2016

cltv-villasecrets1

This ‘quick summary’ is an edit of this full article.

Welcome to Villa Secrets & CTLV.

I am looking for a team to run our CTLV www.Cape-Town-Luxury-Villas.com website, and the Cape Town operations of our new flagship website www.VillaSecrets.com alongside other opportunities.

In this document I have created a simple business plan based on previous financial results from CTLV, expected results from CapeTown.VillaSecrets, and importantly the acquisition of four or five exclusive property mandates each year for which we have a strong initiative.

1. Sole Mandates

sole-mandates1

We have a strong mandate recruiting plan presented in this video, Villa Secretes Magic Mandates (5.20 minutes) and this summary presents four further articles.

From assigning 10% of Gross Profit to mandate recruiters to our ZAR 1,000,000 development and marketing contribution for villa owners, including our 19 different ways to attract sole mandates and our special marketing pack for estate agents, created for use when the owner wishes to sell.

2. Three-year Financial Forecast

financial-forecast1

There are many variables to consider within any financial forecast, not least the quality and strength of the team running the business. The business requires a good sales person and a good networking mandate recruiter plus, a copywriter/live chat operator. Given we have the above staff, and 12 sole mandates are won over 3 years’ the financial forecast is:

1. Year one: Shareholder Profit = ZAR 1,250,000 (4 mandates)
2. Year two: Shareholder Profit = ZAR 2,200,000 (8 mandates)
3. Year two: Shareholder Profit = ZAR 3,000,000 (12 mandates)

3. Value & Cost of the CTLV & Villa Secrets Opportunity.

value-cost1

Based on the 2015 figures, Alders Atlantic business brokers valued CTLV at ZAR 3,200,000. And with 3 years more development, one only needs to look at Villa Secrets to see it is worth more.

But as we are eager to create an advanced prototype model to assist the setup of our international network we only require what we need. Which is the directors and staff as previously stated and start-up funding to fund the development side of the mandate initiative, plus office space.

4. Other Opportunities

other-oppurtunities1

1. 50% of Kapstadtvillas.com
2. 25% of Cape Villas.com
3. 50% of VillasInCampsBay.com
4. South African and International websites

 

5. The Villa Secrets TFBMS

Total Financial Business & Marketing Software

the-tfbms-software1

The TFBMS is an advanced software design currently presented in two parts:
The TMS Total Marketing System
The TFBS Total Financial Business System

The TFBMS becomes a powerful profit multiplier, increasing enquires, increasing conversion rates, and saving money on administration. In the previous two financial forecasts, the effects were included into the forecast and profits nearly doubled. See Plan 4 and Plan 5

However, in this forecast, as the development of the TFBMS is not in the hands of the new company owner, we have not included its effects. They are to be considered a bonus.

6. SWOT Analyses

swot-analysis

1. Strengths

a. Beautiful Villa Secrets
b. Super Simple CMS pages
c. Expert Google AdWords campaigns
d. SEO
e. Years of Experience:
f. Online booking and live availability

Please note that all current weaknesses and most threats are tuned into opportunities and strengths by following the business plan and development strategy.

2. Weaknesses

a. Poorly Organised Property Portfolio
b. No Villa Mandates
c. Old Financial System
d. No Office

3. Opportunities

a. State of the Art Mobile Website
b. The TFBMS
c. International Opportunities
d. The Villas Cloud Booking System
e. The Property Managers and other Networks

4. Threats

a. Airbnb
b. Other Companies like Airbnb
c. Local Competition

Read the full article here

3 Year Business Plan & Forecast

CTLV – Villa Secrets Cape Town Rentals

3 Year Business Plan

By Nick Ray Ball 16th October 2016

ctlv-villa-secrets-cape-town-rentals

In this edition of the Villa Secrets Cape Town Rentals business plan, a R1,500,000 investment buys www.Cape-Town-Luxury-Villas.com which in 2015 made a gross profit of ZAR 1,400,000 and R700,000 in shareholder profit. We add to this, a share of enquires from CapeTown.VillaSecrets.com and inclusion in the Villa Secrets mandate initiatives.

Index

In year one (2017) we see a lot of re-investment in the future, but still achieve R700,000 in shareholder profit. In year two we forecast R1,200,000 and in year three
the internal investment from years one and two pay of and R5,100,000 in shareholder profit is forecast.

One of the main ingredients in year 3 figures are the 12 exclusive mandates attained. For a long time, the acquisition of mandates was uncertain, however with our ZAR 1,000,000 in marketing commitment for each qualifying mandate, it is now far more likely than not, that this target be met or beaten.

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.

Download Spreadsheets: 2017 | 2018 | 2019

This is the 5th version of this business plan, version 4 is presented in the following link Villa Secrets Cape Town Rentals 3 year plan. In both cases we present what we call a ‘Quantum Safe Forecast’ in which we use safe initial inputs. For example, in March 2014 we first launched Cape Town Luxury Villas.com website and in 2015 the team made ZAR1,400,000 in gross profit, but for the sake of caution when estimating 2017 figures we have lowered this figure to ZAR1,000,000. There are hundreds more examples of this principle found within the three spreadsheets.

One step at a time, from January 2017 to December 2019 this figure of ZAR1,000,000 increases due to the development of the TFBMS. In addition we add a percentage of the income from CapeTown.VillaSecrets.com. Lastly we add the income derived from the acquisition of 4 or 5 exclusive rental mandates each year. Each mandate acquired is part of our ZAR1,000,000 mandate marketing initiative. Which is in short Villa Secrets commitment to spend ZAR,1000,000 (or USD 100,000 if in the US, Caribbean or Europe) on web development, advertising, marketing and PR on the villa we represent, over a 3-year period.

This forecast assumes…

1. 2017 – 4 Mandates at average day rate of ZAR12,500 per night
2. 2018 – 5 Mandates at average day rate of ZAR15,000 per night
3. 2019 – 5 Mandates at average day rate of ZAR17,500 per night

Note; we work under the assumption that 1 villa is sold in 2018, and one is sold in 2019 and one mandate is lost. (For instance the owners wish to live in the house themselves).But one of the two properties sold continues to do rentals, as such we account for 4 mandates each year.

Inner network profit share…

lastly is the initiative for all Villa Secrets Cape Town Rental companies to share 25% of their shareholder profit. So if there were three companies, all would contribute 25% of their shareholder profit to a communal fund that would be divided into three and shared equally between the three.

This exercise is included to boost comradery, to make each booking or mandate acquired by any network company a bonus and in addition it becomes a safety net in the case of a poor run, plus for smaller companies that have essential services, such as concierge companies this revenue could become their main profit center.

This is a late entry to this forecast and has not been factored within the forecasts. To factor it in consider a potential 5% to 10% loss in shareholder profit in year 3.

 

Year 1. ‘2017’ Business Plan and Financial Forecast

In Year 1 we forecast a gross profit of ZAR 3,300,000, with costs of ZAR 2,600,000 and Shareholder profit of ZAR 700,000

Year one is a year of building for the future, websites, software, stock and mandates. One of the main differences between this plan and version 4, is that most operational costs including an office and all office related costs (except telephone bills), office management, admin and financial management. Plus content marketing costs such as a media manager, a photographer a video cameraman/editor, copywriters/live chat operators, local SEO and general SEO, a social networks manager, an awards managers and various staff working on print media. These costs are now absorbed by ‘Villa Secrets Africa,’ too which this franchisee (CTLV) contributes 20% of gross profit.

Note that in year 1 ZAR 500,000 of the ZAR 1,500,000 initial franchise commitment is allocated to this cost center.

Further note an initiative to employ all content marketing staff under the join role of hospitality reps & directors. To this end a lot of the staff will come from a film background.

As before ‘S-World Villa Secrets’ receives a 25% of gross profit contribution for the first three years which is allocated to mandate costs, software development, web development and more content marketing and SEO.

New in this edition is a 12.5% of rental commission + 25% of sales referrals commission for the recruitment of mandates in one of three ways…

1. A full time company director dedicated to getting more villas online and the acquisition of sole mandates.
2. An incentive presented to a limited group of individuals who earn passive income acquiring some mandates in exchange for 12.5% of rental commission & 25% of sales referrals.
In year 3 this adds up too over R2,000,000 in incentives
3. Recruiting one of Cape Town’s premier estate agents who have the rights too present and quire exclusive rental and sale mandates for one or more Villa Secrets Cape Town Rentals websites

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
    • Cape-Town-Luxury-Villas.com ZAR 1,375,000
    • CapeTown.VillaSecrets.com ZAR 530,000
  • Income derived from Rental Mandates
    • Exclusive Mandate Direct ZAR 750,000
    • Exclusive Mandate Residual ZAR 480,000
      (This is bookings made from enquiries for a mandated villa, that end up making bookings for other villas.)
    • HomeAway Subscriptions ZAR 90,000
    • Other Subscriptions ZAR 100,000

Expenses are broken into 7 categories

  • General Expenses ZAR 240,000
  • Staff & Office ZAR 0
  • Cape-Town-Luxury-Villas.com marketing ZAR 380,000
  • CapeTown.VillaSecrets.com marketing ZAR 110,000
  • Mandate Google Ads and Remarketing ZAR 295,000
  • Mandate Recruitment Commission/Salary ZAR 150,000
  • S-World Development and Marketing ZAR 833,000

Note that this expense is the S-World Villa Secrets development contribution: 25% of gross profit.

An alternate version of these results that adapts the forecast to zero mandates is found on the spreadsheet tab ‘No Mandates,’ in this scenario shareholder profit is reduced from R 700,000 to R 500,000

Note on the other additional tabs on the year 1 spreadsheet…

  • ‘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.
  • ‘No Mandates’ – Offers a forecast that has no mandates
  • ‘Spending Allocations’ looks at the spending of ‘VS Africa’ and ‘S-World Villa Secrets.’ (Note for all sheets we currently only see the 2nd year allocations)
  • ‘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

In Year 2 we forecast a gross profit of ZAR 7,400,000, with costs of ZAR 6,200,000 and Shareholder profit of ZAR 1,200,000

In year 2, income is divided into three categories…

  • Web Agency Income
    • Cape-Town-Luxury-Villas.com ZAR 2,000,000
    • CapeTown.VillaSecrets.com ZAR 800,000
  • Income derived from Rental Mandates
    • Exclusive Mandate Direct ZAR 2,250,000
    • Exclusive Mandate Residual ZAR 1,780,000
    • HomeAway Subscriptions ZAR 104,000
    • Other Subscriptions ZAR 121,000
  • Other Income
    • Sales Referrals ZAR 350,000

Expenses are broken into 7 categories

  • General Expenses ZAR 390,000
  • Staff & Office ZAR
  • Villa Secrets Africa ZAR 1,480,000
  • Cape-Town-Luxury-Villas.com marketing ZAR 490,000
  • CapeTown.VillaSecrets.com marketing ZAR 115,000
  • Mandate Google Ads and Remarketing ZAR 1,355,000
  • Mandate Recruitment Commission/Salary ZAR 591,000
  • S-World Development and Marketing ZAR 1,850,000

An alternate version of these results that adapts the forecast to zero mandates is found on the tab ‘No Mandates’ in this scenario shareholder profit is reduced from R 1,200,000 to R 990,000

 

Year 3. ‘2019’ Business Plan and Financial Forecast

In Year 1 we forecast a gross profit of ZAR 20,100,000, with costs of ZAR 16,250,000 and Shareholder profit of ZAR 5,100,000

Note on shareholder profit. This has been added to in ‘row 17’ by ZAR 1,280,000. This is the 2,560,000. of ‘S-World Villa Secrets’ (Additional Marketing & Development) which will generate at least an addition 50% (being ZAR 1,280,000) in shareholder profit. (It may well generate twice as much, indeed it should, however for simplicity and caution we work on a 1.1 ROI, with 45% of ROI destined for Villa Secrets Africa and S-World Villa Secrets and 5% destined for mandate recruitment costs.)

Note in the following year this bonus will not apply, however due to the TFBMS and an increasing property portfolio 2020 will still increase it shareholder profit, even without this profit centre.

In year 3, income is divided into three categories…

  • Web Agency Income
    • Cape-Town-Luxury-Villas.com ZAR 2,900,000
    • CapeTown.VillaSecrets.com ZAR 1,400,000
  • Income derived from Rental Mandates
    • Exclusive Mandate Direct ZAR 5,800,000
    • Exclusive Mandate Residual ZAR 8,870,000
    • HomeAway Subscriptions ZAR 128,000
    • Other Subscriptions ZAR 150,000
  • Other Income
    • Sales Referrals ZAR 800,000

Expenses are broken into 7 categories

  • General Expenses ZAR 540,000
  • Staff & Office
      ZAR
  • Villa Secrets Africa ZAR 4,000,000
  • Cape-Town-Luxury-Villas.com marketing ZAR 741,000
  • CapeTown.VillaSecrets.com marketing ZAR 185,000
  • Mandate Ads and Remarketing ZAR 3,830,000
  • Mandate Recruitment Commission/Salary ZAR 2,000,000
  • S-World Development and Marketing ZAR 5,000,000

 

Villa Secrets Cape Town Rentals – 3 Year Business Plan

Villa Secrets Cape Town Rentals – 3 Year Business Plan

Network.VillaSecrets.com

Go to Index

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

Luxury rentals 2017 to 2020 financial roadmap

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.