From CEO to Systems Architect

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Nick Ray Ball - From CEO to Systems Architect

Nick Ray Ball – From CEO to System Architect.

By Krissy Cabrera 11th March 2016

Born in Belgravia, London in 1971, worked as a programmer and web designer until 2002, when he became CEO and marketer of Cape Villas.com. In 2011 Nick Ray retired to focus full time on the design for Software & Systems that would improve the business.

The combination of his experiences make him uniquely qualified to build a next generation software system for the Vacation Rental industry.

Nick Ray Ball was Born in Belgravia, London in 1971, worked as a Cubase  programmer until 1999 when he swooped to Web Design & Development. Nick Ray has Experience in: System Architecture, Villa Rentals & Marketing, alongside creating a stellar network hypothesis.

Introduction and Summary

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Cape Town Luxury Villas.com

By Nick Ray Ball 16th March 2016

Development stared in February 2013, at first, a complete copy of Cape Villas.com was created. After which every line of code was re written according to Googles SEO guide, which included making the software ‘Magic Keywords’  a new Content Management System and a much improved product display.

After a year of work, including a API link to the Razor Property Management System, an up to date and more attractive version of the website was created, which became an instant success when launched in March 2014 and in 2015 Cape Town Luxury Villas.com (CTLV) generated  a turnover of over $600,000 (ZAR 9,115,000) with gross profits of $105,000 (ZAR 1,434,000).

The marketing for Cape Town Luxury Villas.com (CTLV) was primarily Google AdWords, which due to Nick Ray’s 11-year experience with AdWords on CapeVillas.com meat he succeeded where others did not. To Date the AdWords cost is $18,500 (ZAR 280,000) which generated about $73,000 (ZAR 1,004,000) of  CTLV’s gross profit.

An additional $32,000 (ZAR 430,000)  has been made from the SOE software ‘Magic Keywords’ and a high Google placement for ‘luxury’ keywords. In 2016 we started a content marketing strategy and have added a blog. Which presents villas in a magazine format, often with beautiful HTML5 animated slideshows at the top. See…

With a turnover of over $600,000 (ZAR 9,115,000) Cape Town Luxury Villas has done well, and surprised all the big players in the industry. However, it is the future of CTLV that is most exciting.

CTLV is owned by Villa Secrets ltd. But is independently managed. In 2015 by ‘Cape Luxury Accommodation’ and in 2016 by ‘Cape Villas.com’ who pay 25% of gross profit, which is (about a 4.5% of income) to Villa Secrets. Which gets used for development.

Villa Secrets is for all intents and purposes a non-profit company, that invests all income into creating better software and marketing opportunities for its partners. The more money Villa Secrets make the better the software and opportunities are for its network.

Villa Secrets are embarking on a software development project that will take three years and cost at least $3 Million. Some of which will be generate by the sale of Cape Town Luxury Villas.com, and the rest from creating new Villa websites internationally and in Cape Town create a network of in complimentary niches. Such as Safari Bookings, Real Estate Sales, Property Management, Film and Resorts.

Cape Town Luxury Villas will be sold, as a member of Villa Secrets, in a similar method as franchise, but instead of a franchise fee, the contribution of 15% of GP rising to 25% of GP will be spent on improving the profitably of Cape Town Luxury Villas.com and the greater network.

We call the business methodology: ‘Boost it!’ and it is underpinned by some fiendishly complex mathematics. Initially, the contribution will be spent directly on boosting the GP of CTLV, by different direct marketing methods. Then after a set GP point is reached, the contribution will be spent on a combination of boosting factors: The development of software, staffing for media and content marketing, guests gifts and various network expansion exercises.

To assist us to ‘Boost it,’ we are developing custom software that we call TFBMS (Total, Financial, Business & Marketing software). Which adds the ‘Boost it’ algorithm to our current software Magic Keywords,  Magic Menus, VS Mobile and our plan for The Divergent CRM

 

This software is really awesome, it has over 93 different components and its currently forecast to improve profitability by just under 400%. We are proud to be tested on this forecast and present over 4 hours of video on the specifications, see: The Divergent CRM

However, the software and direct marketing is not the only way we ‘Boost it!’

Another method, which becomes available to a team that contains a good sales person, is that CTLV, as the principle villa rental agency in the Cape Town Villa Secrets network will receive the enquiries form the Villa Secrets website, this alone could immediately increase revenue by 100% and more and increase the likelihood of gaining property mandates.

Then comes the Cape Town network, which is currently being considered as: An Architect, a Villa Hotel management company, a Real Estate agent, a Safari specialist an Apartments specialist, an International Luxury Villas company and an internationality recognised Brand. At the last count this union creates 31 distinct reasons why CTLV will increase profit.

All together ‘Boost it!’ has a portfolio of opportunities that can boost a company by up to 6400%

And here’s how we do it: Ŝ = (Ḡ x § x Ѳ x Ś x Ś2 x ᶆ x ʧ ) x ϻ

Note the ‘ϻ’ at end, that stands for ‘Available Market share’ this tells us is that boosting a single company continuously is not always the best way to higher profits, instead in some or many cases its better to use the most economic boosting methods in one location then expend to a new location.

This brings us to what, for me, is by far the most interesting part of the plan. Its called ‘POP,’ which stands for ‘The Pressure of Profit Investment System’ Their is an accompanying article and spreadsheet for this, but its simple enough to explain:

At a set point of Gross Profit of between ZAR 5,700,000 & ZAR 7,600,000. (a 400% to 530% improvement on 2015). All additional profit, and all of the 25% contribution to Villa Secrets is used to create either a second Villa Rental company in a different location, a company is a different niche  in the same location or as has had thousands of hours of consideration, create a resort development.

This ecologically friendly venture was  macro economically (in a big way) described in 2012, within the book ‘The Theory of Every Business‘. And as is now micro economically (in a small way) described as a  collection of 8 beach front super-villas and a 7 star hotel designed by Stefan Antoni in Koh Samui, Thailand.

No matter where we build or how small or large the development, our ace in the hole, will be the ability for the Villa Secrets network, to boost and market the villas. Achieving excellent rental returns and selling at a premium due to the position and quality of the architecture, the rental return and the collection of realtors in the network.

The exact path we take will be decided based upon after much research and the application of this algorithm: P x gs x (Ŝ x ϻ) = Ѫ

Don’t hate the maths, this math shines the way for every owner of a Villa Secrets company to own their own mansion within 10 years. Plus it has the capacity to do great good as it is modelled on physics of  ‘Theory of Everything.’

Lastly it worth mentionaing that as the Villa Secrets network prototype, I have a a great desire to see Cape Town Luxury Villas.com do as well as possible, as it sets a president for all other Villa Secrets ventures.

Thanks you for reading
Nick Ray Ball

 

Villa-Secrets-Software-Framework-&-Marketing-Systems

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Villa Secrets Systems & Software Framework

By Nick Ray Ball 13th March 2016

Pictured above, we see the system architecture for S-World Networks System Core.

We are currently working on the first component, the Villa Secrets Software Framework.

Presented as four separate components. Magic Keywords, VS Mobile, Magic Menus & The Divergent CRM

For more on the PQS see ‘Nick Ray Ball – String Theory, Networks and Networking.’
‘We build the products that we want to use ourselves’, Bill gates see: Bill Gates and Steve Jobs interview.

After 8 years struggling with systems not compatible with the villa rental industry, and in particular financial systems Nick ray Ball created a development plan for software that would revolutionise the industry.

It started in 2011 with a networking plan for Virgin Group that included, a multi website system, interlinked to GDS’s and PMS to provide inventory, a customer orientated CRM, that went as far as sending presents to previous clients. All tied together with automated financial software that was error free and provided perfect management accounts and forecasts for managers and CEO’s.

Nick Ray Ball – String Theory, Networks and Networking

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Nick Ray Ball – String Theory, Networks and Networking

Nick Ray Ball – String Theory, Networks and Networking

By Nick Ray Ball 13th March 2016

The elasticity of String Theory & The Theory of Everything explained as never before, ‘a network of companies, within a next generation Software Framework’

String Theory, Chaos Theory, The Higgs Boson and The Theory of Everything, explained as ‘strings of companies, given power by the S-World/Villa Secrets Network.’

But before the particle physics, some network history. Which in a way started in 1991 and ran till 1999 as a part of Nick Ray’s job as a Cubase programmer was to create Midi networks. However the first, almost global network was nearly created in 2004.

Lux Guides – Virtual Travel Network – 2004

S-World and Villa Secrets stem from a global networking project called Lux Guides.com in 2004, which was the global title for the CapeTownGuide.com & the SouthAfricanGuide.com which were the first working virtual tour websites created using Flash and JavaScript.

Having already made a deal with SA’s only satellite TV network to present the tours on their digital channels, the objective was to connect to Galileo GDS to bring online booking of hotels onto the website.

Quite a lot of work was put in and interesting partners were made along the way, but in the end, the project did not get off the ground, and worse the website domains were not extended and all the work was lost, except for an adaptation that is seen on CapeVillas.com/CTG

Nick Ray Ball – Marketing & Branding

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Nick Ray Ball – Marketing & Branding

By Krissy Cabrera 12th March 2016

First mastered SEO in 2001,  PPC Advertising in 2002, Affiliate Marketing in 2005, Content Marketing in 2008 & Branding in 2009. Now all are used collectively.

To date the most financially successful marketing endeavour undertaken has been the creation on Cape Town Luxury Villas.com. Cape Villas made a greater income, but this was created over time within a high service cost model. On the Other Hand, Cape Town Luxury Villas.com (on its second release) was instantly successful and had a far more economic model.

Since 2009 Nick Ray Ball has focused on complex marketing strategies, entangling such strategies into the design of the S-World and Villa Secrets Network.

The marketing behind Cape Town Luxury Villas.com was SEO (Search Engine Optimization) & SEM (Search Engine Marketing) and PPC Marketing in the form of Google AdWords. Of which SEO & SEM accounts for 25% of enquiries and PPC accounts for 65%

Cost of VSF Software and Updates for Cape Town Luxury Villas

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Cost of VSF Software and Updates

for Cape Town Luxury Villas

By Nick Ray Ball 9th March 2016

‘For Cape Town Luxury Villas.com the cost of the Villa Secrets Frameworks Software: Magic Menus, VS Mobile & the Divergent CRM will cost $229,000, which is less than 8% of its development cost.’

This software is as unique as it is awesome and is being developed over three years at an estimated development cost of ZAR 45,500,000 (£3,000,000) ($2,900,000). Cape Town Luxury Villaas.com will only pay for software after it is installed, working and training videos have been created.

However, for Cape Town Luxury Villas.com the cost less than 8% of development being ZAR 3,499,000 (£162,000) ($229,000)

The Software is as much about improving efficiency as it is about marketing, so far 93 different ways to improve conversions and increase one’s market are considered. And in so doing Cape Town Luxury Villas.com is expected to increase turnover by 450% in three years for only a 60% increase in costs.

It is further expected that during the three years of development many more profit enhancing factors will be included within the Villa Secrets Software Framework design, leading to maybe 200 different individual profit components.

Here is a quick video that summarises:

The spreadsheet can be seen by following this link, or you can download it here

It starts with six items that are currently in development, from the addition of ASTA & PRS Memberships presented nicely in the footer of the website and emails of a cost of only R316 (£15) ($20) which is expected to increase turnover by 3% and costs by 1%

To the awesome VS Mobile, soon to be one of the world’s leading property / travel mobile websites for R136,955. (£6,350) ($9,020). $8,765. Including a new AdWords campaign VS Mobile is predicated to increase turnover by 34% and costs by 10% marketing cost.

However, most VS Software updates have a very low or no cost, for instance Magic Menus is desired to increase turnover by 11% and has no associated ongoing cost. Just the initial ZAR 95,888 ($4,444) ($6,313) fee to Villa Secrets for development and instillation. Paid for only after completion, testing and training.

Most software specified will have additional components added, such as VS Mobile showing the Divergent CRM. All new upgrades not mentioned on this list will be available for free, unless there is a general licence fee applicable to all Villa Secrets franchises.

Pricing and Valuations for Cape Town Luxury Villas.com

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Pricing and Valuations

for Cape Town Luxury Villas.com

Updated Article by Nick Ray Ball 29th March 2016

On this page we consider different valuation methods. Which range from $117,000 to $791,000.

We consider selling the business as a Villa Secrets franchise, including all software updates for $117,000. Or as an independent business without updates for $260,000

 

Of all the different valuation methods there are for valuating a business, be it for sale or franchise, the most consistent is simply that a business is worth what someone is willing to pay for it.

Assuming the purchaser or franchisee was looking for the best deal, then we will first consider the lowest valuation possible of all methods.

This would be the discretionary cash flow to a single owner, including costs for marketing, a small office, manager replacement, and smaller expenses like fuel, and telephone bills, which equals ZAR600,000. ($39,000) (£27,300) Which over 3 years’ equals. ZAR1,800,000. ($117,000) (£81,200)

It is not in our interest to sell this business for such a sum, we would however consider this type of figure for a franchise. (with a Franchise fee of +/-4.5% on income)

Why would one wish to pay the lowest valuation of a business for a franchise? Due to free upgrades to all software Magic Menus, VS Mobile and most importantly the 92 profit increasing features of the Divergent CRM. In addition is the growth in general of the Villa Secrets Network.

Villa Secrets does not rent, buy or sell, it is a development company that exists to better the fortunes of its franchises. All Franchise fees are in effect development contributions, Villa Secrets acts in a non-profit capacity, interested only in becoming the best software and marketing platform it can be. Villa Secrets is the prototype for this complex Marco Economic Network: ‘The Theory of Every Business’
In our original valuation and pricing, (as seen below) we created a Normalised Shareholder Profit forecast (Adjusted for expected future income based on technology advances) of = ZAR 9,268,000 (plus ZAR 2,900,000 for current asset replacement). Making a Total of ZAR 12,168,000 ($791,000) (£554,000)

Given Villa Secrets commitment to creating the software and systems for our franchises to flourish, and an additional V2 website thrown into the package. We feel this is a fair price.

And as such then the lowest valuation price of ZAR1,800,000. ($117,000) (£81,200)
seems like a reasonable franchise cost. (A cost that can be made up by a commitment to marketing & staffing the business in the way desire).

It terms of an outright sale, (no franchisee fees), an offer of ZAR 3,500,000 for the current business (including its ZAR2,900,000 asset replacement value). With the same paid again over three years for software updates would be accepted. Total ZAR 7,000,000 ($455,000) (£319,000)

If considered without future software updates, as a completely independent business, we would consider offers over R4,000,000 ($260,000) (£182,000) (depending on the ‘restraint of trade (or lack thereof) conditions applied to Villa Secrets’

 

Original Article by Nick Ray Ball 10th March 2016

Using 4 different methods, the average valuation including assets is $700,000. The for-sale price is offers over $230,000.

With future software updates, that are costed at $3,000,000 available for an additional $230,000. All Itemised and paid for over 3 years’ item by item, once developed installed and working.

By applying the four most credible valuation methods from Entrepreneur.com, SmallBusiness.co.uk & EasyAccountancy.co.uk to Cape Town Luxury Villas.com the average valuation for the company including assets is ZAR 10,635,126 (£485,000) ($700,000)

The software being developed over the next three years for Villa Secrets network is set to increase profitability four fold. The current estimated development costs for this software is ZAR 65,000,000 (£3,000,000) ($4,270,000)

However, we will consider offers over ZAR 3,500,000 (£162,000) ($230,000) for the website and business. And the same again for membership in Villa Secrets and all software updates. The later paid for component by component over three years after instillation, testing and training.

For instance: Villa Secrets Mobile will soon to be one of the best mobile websites for property on the planet. We can add this to Cape Town Luxury Villas.com for R136,955. (£6,350) ($9,020). We are confident that any web development company capable of producing same would charge an awful lot more, for this technology.

On the page Cost of VSF Software and Updates and we present prices for all other software items and upgrades adding up to R3,500,000 (£162,000) ($230,000) which is under 8% of the estimated development cost.

When complete this software framework will be in way in advance of any system available for vacation rentals. The Divergent CRM is shown to already generate 92 different ways to improve profit and increase the profit of Cape Town Luxury Villas by a factor of four within three years. See part 2 of the Strategic Growth Plan for Cape Town Luxury Villas

The Magic of Cape Town Luxury Villas.com is not just in its current website and business, but as much again in the software that will be developed in the following years. Only available to Villa Secrets franchises or members.

Valuation methods

Referring once again to Aldes Atlantics 10 Points on Selling a business and this time point 3 ‘Value your business’. We are advised that the International Valuation Standards Council, suggest one should value a business by a few different methods and then create an average. However, we could not find specific example in their website, so we looked at top Google results SmallBusiness.co.uk, EasyAccountancy.co.uk & the well-respected Entrepreneur.com,  which collectively presented five different ways to value a business.

1. Multiples of shareholder Profit.

In this valuation method, one multipoles shareholder profit between 3 and five times, or eight for business with considerable assets or brand awareness. In addition, it is stated that businesses that have a lot of potential to increase profit, including business with new profit increasing technologies in development, would be seen at the higher end of the scale.

In terms of new technologies Cape Town Luxury Villas is just at the beginning of a serious investment into improved technologies as is discussed in the Strategic Growth Plan for Cape Town Luxury Villas. And Illustrated in the following pages dedicated to software upgrades that are applicable to Cape Town Luxury Villas.

a. Magic Keywords
b. Villa Secrets Mobile
c. Magic Menus
d. Divergent CRM & Marketing Platform
e. Development Cost of Divergent CRM & Other Software
Please note the development of the above, will take three years and is estimated to cost ZAR 45,000,000 (£2,000,050) ($2,900,000) to develop.

For a pre negotiated price, paid component by component only after software is working for Cape Town Luxury Villas staff. Cape Town Luxury Villas.com have access to all software updates which suggest a 400% increase in profits in year three. Hence in terms of evaluation of how many years of shareholder profit one should use we have worked on four years.

By the time a serious buyer has read through all software pages above, watched the six plus hours of video explaining what the software does, how it increases profit and how much it will cost to make. Any future owner will agree Cape Town Luxury Villas.com has a lot of potential to increase profit, and there for should use a higher multiplier when assessing the value of the business in multiples of shareholder profit.

The scale of multiples is stated to be between 3 and 5 or 8 for business with potential to increase profit. So a multiple of 5 or even 6 may be considered reasonable. However for the sake of caution we shall use a multiple of 4.

Hence the multiples of shareholder profit valuation is just over:

Value of Cape Town Luxury Villas = ZAR 4,000,000
(£185,000) ($263,000)

2. Normalised Shareholder Profits

The second form of valuation is called ‘Normalised Profits’ which is the same as the last method, but one includes and future losses or gains that are expected. We have gone into great details on this point, starting with section 2 in the Strategic Growth Plan for Cape Town Luxury Villas and in particular this Video ‘Cape Town Luxury Villas Normalised Profit’ on how our software in development creates 92 different improvements which will positively affect Cape Town Luxury Villas in its first three years. Further information is found ‘Development Cost of Divergent CRM and other Software Updates.’

The result is currently seen as

2015 Shareholder Profit = ZAR 1,018,950
Year 1 Shareholder Profit = ZAR 1,258,905
Year 2 Shareholder Profit = ZAR 2,764,743
Year 3 Shareholder Profit = ZAR 4,225,409

4 years Average of Normalized Profit = ZAR 9,268,007

Value of Cape Town Luxury Villas = ZAR 9,268,007
(£420,000) ($610,000)

3. Multiples of Revenue

The next valuation method is Multiples of revenue, where it is suggesting a business is worth between one and two years it’s revenue. For this we split the difference and worked on 18 months.
2015 Revenue = 9,155,291 (Multiplied by 1.5 for 18 months =)

Value of Cape Town Luxury Villas = ZAR 13,672,500
(£633,000) ($9,000,000)

4. Warren Buffett’s discounted cash-flow analysis

This method of valuing a business is the sort of accounting that sunk Enron, but as it has been presented by two sources we will include it for posterity, but do not include it within our calculations.

It is called ‘Warren Buffett’s discounted cash-flow analysis.’ Which in-short, links the value of a business to the interest made from investing in T-Bills at an interest rate of 3%

You can see the calculations for this and the above mentioned method in point 3 on the ‘10 Points to consider when valuing a business’ page. The result is:

Value of Cape Town Luxury Villas = ZAR 34,000,000
(£1,570,000) ($2,230,000)

5. Valuation based on Clients

It has been mentioned that a company can be valued by its clientele, which in the case of Cape Town Luxury Villas we consider as the quality of its enquiries.

No official method of valuation is mentioned, however it should be noted that 75% of the enquiries since 2014 have been stored into Cape Town Luxury Villas CRM and an analysis of the enquiries by someone who knew the industry, would likely agree with the ‘multiples of shareholder profit evaluation.’

Value of Cape Town Luxury Villas = ZAR 4,000,000
(£185,000) ($263,000)

6. Asset Replacement Value

We have spent a lot of time preparing due diligence for the value of the Cape Town Luxury Villas website, portfolio and supporting Systems. You can see the detail here: ‘Asset Value of Cape Town Luxury Villas website and Supporting Systems’

Working at an agency rate of R900 (£41) and hour we have put a value to the Cape Town Luxury Villas website, portfolio and software of R2,900,000 if one were to start from scratch, build the website, build the SEO software which generates 25% of enquiries from free searches, make the winning AdWords Campaign and recruit the largest portfolio of Cape Town villas available any ware.

Note the Cape Town Luxury Villas was created from www.CapeVillas.com who have been recruiting properties since 2002. CTLV is in effect the new version of the Cape Vilas.com website and has access to the entire cape Villas property database alongside Razor properties and 150 new properties added since 2014. Soon it will also link and provide online bookings for Nox Rentals, Village and Lifer and Nightsbridge PMS.

Asset Replacement Value of Cape Town Luxury Villas = ZAR 2,900,000
(£134,000) ($190,000)

Now to make a final valuation, we pick all valuations except Warren Buffets and make an average then add the value of the company’s assets.

Multiples of shareholder Profit. = ZAR 4,000,000
Normalised Shareholder Profits = ZAR 9,268,000
Multiples of Revenue = ZAR 13,672,500
Valuation based on Clients = ZAR 4,000,000

Average Valuation of CTLV = ZAR 7,735,126
(£358,000) ($510,000)
Plus Asset replacement cost = ZAR 10,635,126
(£493,000) ($700,200)

Note, ZAR to £ & D conversions vary slightly between Feb 2016 (used on spreadsheet) and March 2016 (used to compile this page)
ZAR = $0.066
ZAR = £0.046