10 advantages of the Villa Secrets Network


10 Advantages for Members of the Villa Secrets Network

By Nick Ray Ball 24th February 2016

During the creation of the Strategic Growth Plan, it became clear that most profitable path for Cape Town Luxury Villas was to remain a part of the Villa Secrets Network. As a franchise receiving software updates for free, or a non-fee paying member, paying a pre arranged cost for all software updates.

However their are more advantages to membership of Villas Secrets that software, 10 are presented on this page, to be elaborated upon at a later date.

Before reading its necessary to understand what Villa Secrets is, or maybe better explained, what it is not. It is not a villa rental agency, it is a software framework and integrated marketing platform applied to the luxury villa industry globally.

Villa Secrets does not rent villas, it does not sign mandates and it does not manage properties.

Villa Secrets creates web franchises and does everything in its power to make sure those franchises succeed, by superior technology, network structures and hospitality initiatives.

In terms of Cape Town Luxury Villas, if it were to be sold as a ‘non fee paying’ member of Villa Secrets, it would enjoy all the benefits of membership. Hence any advantage to the Villa Secrets network is an advantage to Cape Town Luxury Villas.

1. Recruit mandates to the network

Much work has been put into creating a package that will temp villa owners and property managers into offering a sole mandate for their property.

For new owners who approach Cape Town Luxury Villas, the process is relatively simple. However, trying to temp owners who are already represented or self-represented, one needs something special.

So we are working towards the 25% mandate, (competitors charge 40%) with intent on seeing good occupancy for the owner and only the exclusive quality websites representing the villa. Over four years we are looking to create a network of 16 of the most well respected companies and only present the villa within that network, backed up by mass subscriptions and a prime placement on HomeAway and AirBnb.
The system would work with the agency that owns the mandate receiving 10% and the referring agency receiving 15%.

We are looking for only world class international agencies and tour operators, the top SA agencies, such as Rhino Africa, and a few select villa and estate agencies in Cape Town.

The bigger this network gets the more firepower the network has. The more market share it will contain and so the more impressed a villa owner will be.

One will be able to guarantee placement on the homepage of half of the agencies.

Currently given an opportunity, the owner of Cape Town Luxury Villas will find it easier to recruit a mandate shared with Cape Villas, Villa Secrets and Esperance Africa that it would be working solo. Add more quality agencies and the network becomes more appealing.

There is actually a lot more to this point. The creation of websites for villas mandated to us for one, and various marketing options for owners including representation in Villa Secrets magazines and videos.

In addition we are developing a custom property management system which is made unique by its easy price estimation tool.

2. Free Software Licences

By late 2017 the Villa Secrets software framework’s current plans shows us paying about $10,000 a month in software licensing.

By being a part of the Villa Secrets network, Cape Town Luxury Villas would have access to all the non ‘per user’ software for free.

That’s millions of rand a year in and a truck load of awesome software.

3. Free use of the software developed by Villa Secrets

There is a lot more to the use of available software than just buying the licence. Villa Secrets need to interface with the software company’s API to create a unique dataset which all software components connect. Only then can a system be created that is tailored specifically to the villa rental industry.

The software created will far exceed any non-Villa Secrets network rival. As a Villa Secrets network partner, one would benefit from all the advances that happen and all software created.

Villa Secrets Custom Software

a. Already Included Software – Magic Keywords – White Hat SEO Software
b. Software in Development – VS Mobile App – Dedicated JQuery Mobile Website
c. Software in development – Magic Menus – Intelligent XML Sitemaps – CMS Logic
d. Software to be developed – Divergent CRM & Marketing Platform

4. SEO, links from within the network

This is something we do, very lightly, and only in such a way that is of genuine benefit to the page.

However as we are creating the network in such a way as each website has a different owner and different address. And we use a set of different servers, IP’s and subnets. Links from one website to another will count.

We made a link to Cape Town Luxury Villas from Cape Villas Homepage in 2014 and it made a big difference, but it was removed after a few months.

Now we are at a point where we are going to link it again to Cape Town Luxury Villas, and we hope for the same positive result.

In addition, we are going to be making some targeted links from individual pages on Cape Villas, to blogs on the same or similar property, found on Cape Town Luxury Villas and from their link to Villa Secrets.

Making links from web pages to blogs on the same or similar page is perfectly reasonable. In fact, it is improving the client experience as the blogs offer more information and is well presented.

As the network grows there will be more sites linking to each other for relevant search terms. This is often started by a link from Cape Villas or other high authority websites that join the network.

The bigger the network, the more links and the higher Cape Town Luxury Villas will climb in Google and Bing organic searches.

We will create an even amount of inbound and outbound links that will be to the great benefit of Cape Town Luxury Villas. As it will also link to other selected Villa Secrets sites, it is in our interest to create the highest domain authority we can for Cape Town Luxury Villas.

5. Content marketing

Content Marketing (sometimes called inbound marketing) is the only link building technique Google approves of and as such is central to the Villa Secrets network.

Currently we have a team of three. Including a copywriter, a programmer who created the blogs in WordPress and a designer who creates advanced templates and navigation.

In Cape Town we intent to hire more content writers and add a photographer, cameraman and presenter. Producing blogs and videos for the network and guest blogging on high domain authority luxury travel blogs across the world, so bringing in valuable inbound links.

In addition, we auto syndicate blogs to over 20 social networks, which if used by staff from time to time would create links back that counts and provide clients directly.

Many other syndication options are available, for instance buying a directory entry from Best of the Web for $75 not $300. Which offers 8 links to pages and social networks

Cape town Luxury Villas can either contribute one staff member (who can double as hospitality) and have a share of the output. Or make a deal for a fixed rate for one or two blogs per week.

6. 24/7 Live Chat

While at work, our content writers will be manning the live chat as they blog all day about villas. They will have great product knowledge. As they are copywriters they will write to clients in a sophisticated manner, attune to the subject matter.

The advantages of 24/7 live chat are significant, one may receive 100% more enquiries, which enter the funnel with better information, from a client who has spoken with someone and as such is less likely to search for competitors.

Clients will see the 24/7 live chat as a great customer service tool, and be assured. Live Chat is said to decrease the amount of emails hospitality reps have to deal with by over 50%.

It’s a win-win scenario.

But expensive, too expensive for one agency. But not for a network of agencies covering the costs between them. The staff will communally make blogs for all contributors and be on hand to deal with enquiries from a variety of websites along with hospitality and concierge matters.

If Cape Town Luxury Villa were to contribute to one staff salary, they could use the 24/7 live chat service and greatly increase their content marketing and media output.

7. Safari and Hotel Bookings

For Cape Town and Africa agencies, access to safari availability, recommended choices and logistics catered for can lead to significant residual income. As a client that books a villa and safari often generates good income.

For villa rental agencies across the world, having the option to book a hotel for short stay clients that cannot book a villa, is another good source of residual income.

We have exchange NDA’s with Amadeus Hotels which offer BAR rates on most luxury resort hotels, many boutique hotels and luxury guest houses.

Villa Secrets is launching safari and luxury hotel products in 2016/17. Particularly putting a lot of effort into African Safari’s and Resorts.

Cape Town Luxury Villas can benefit from these updates.

8. Shared hospitality department

Villa Secrets is creating a combined hospitality/content marketing/media company, with a staff that is hospitable, employing content marketing and with a media department working in hospitality and concierge when required, assisted by the Divergent CRM.

The current consideration is that each company that has a Villa Secrets website pays the salary of one of the hospitality/content marketing and media department. In doing so, it collectively creates a full and vibrant media department which serves clients when in Cape Town.

Note this department also mans the 24/7 live chat.

There is an option for Cape Town Luxury Villas to contribute to this department, to relive their hospitality needs and at the same time increase their content marketing and media, and in addition receive 24/7 live chat.

9. Shared media department

Following on from the previous point. The creation of professional videos has long been thought of as a worthwhile endeavour. Video is liked on websites, and has the potential to go viral on social media. Videos will not just be about villas, but Cape Town in general, from surfing to paragliding, from Camps Bay to the Winelands.

Technically it’s not hard to master, with programs like Adobe Premier we will make videos in HD fit for airing on television. And we will try to syndicate the footage on TV.

Villas that have videos created, will feel better about Villa Secrets for making the effort and so the media department becomes a recruiting tool, in the hunt for exclusive property mandates.

In addition to creating videos we are working on creating the Villa Secrets magazine (from recycled paper). In 2009 Nick Ray Ball produced the ‘Cape Villas’ magazine. This was distributed with Conde Nast Traveller and had ‘Bulgari’ calling offering a good deal of money in barter for placement in the next magazine.

As soon as the Villa Secrets V2 site is live (expected at the end of March 2016) we will again approach Bulgari about Villa Secrets Magazine suggesting we use their villa in Bali for a Bulgari product placement shoot. We hope they say yes. When they do we will also approach leading fashion brands for product placements and include their couture products within the villa shoots.

This is going to be a very exciting magazine, one way or the other and it will raise the profile of Villa Secrets network to great heights, and it will become a recruiting tool globally.

10. American Butterfly advances and links.

Currently the American Butterfly website if far from complete, it has a nice slideshow on the homepage that attempts to present a million works of business plan in 45 seconds. In the footer is a link to the first book ‘The Theory of Every Business’. But most of the work is still in on Word docs on Nick Ray Ball’s laptop. Their just has not been the time to proof-read the books and add them to the website, Cape Town Luxury Villas and Villa Secrets have been priorities.

However at one point this website and set of books will be uploaded, and if one though that the Divergent CRM was in any way complex, hold on. American Butterfly is the story of the network development in all industries and is considered into Chaos Theory that presents a thought provoking piece of economics.

In books two and three American Butterfly explores some basic principles of particle physics including string theory, super symmetry and quantum theory and finds ways to create the global network according to their rules.

At the very least, when populated with the content and syndicated to universities we expect the American Butterfly website to become an authority, which for Cape Town Luxury Villas is awesome, as being the prototype it will be mentioned and linked to often. The more powerful the American Butterfly websites becomes the more powerful Cape Town Luxury Villas will become.

At the very least, we will be creating about 250 different hi scoring links from the many different relevant categories of ‘Best of the Web blog directory. ’However as American Butterfly is Nick Ray Ball’s favourite project one can expect a whole lot more from American Butterfly.

10 points to Consider when Selling a Business


10 points to consider when selling a business

By Nick Ray Ball 20th Feb 2016

Be it as a franchise or outright, Villa Secrets is considering selling Cape Town Luxury Villas. This page looks at 10 considerations by Aldes Atlantic Cape Town. Aldes.co.za are the leading business brokers in South Africa.

1. Get your company “fit” for sale

Many buyers will assess a company according to how well the books of the company are kept. You should have the following documents easily at hand and up-to-date: up-to-date management accounts, financial statements for the previous financial year (better last 2 years), Asset list with credible valuation, VAT returns for the last 12 months, signed lease agreements, signed employee contracts, Copy of Lease / HP agreements with settlement figures and any contract of significance.


Management Accounts: The Cape Town Luxury Villas management accounts have been created to become a part of an automated financial system that we are developing. When presented to accountants Williams and Co, senior accountant Paul M Smith (BSc Honours FCA) mentioned that the management accounts were far superior to what is usually presented. And as a result it took only two billable hours to create the company’s UK tax return for Villa Secretes Ltd., the parent company of Cape Town Luxury Villas.

Financial Statements: Cape Town Luxury Villas operated as a franchise to Villa Secrets paying about 25% of turnover as a franchise fee (this equates to just over 4% of income). The financial statements for Villa Secrets are readily available. To verify total turnover one multiplies the franchise fee of £19,300 (R386,000) by four to create 100% and £77,200 (R1,544,000).

(Note: Pound to Rand conversion is set at 20 Rand to the Pound as this was the average over 2015)

However actual turnover was £71,726 (1,434,000) why the difference? This was due to some booking deposits between May and September being paid for, but not recorded on the Cape Town Luxury Villas ‘Budget Master’ spreadsheet. The Budget Master spreadsheet is used to record each booking and create monthly management accounts.

We have the statements for Villa Secrets receiving 26.9% of turnover which when added the additional 73.1% creates 100% turnover. We have the ‘Budget Master’ spreadsheet created by Cape Town Luxury Villas previous management recording bookings creating a similar figure.

In addition to the above, we have the new team from Cape Villas that are now answering enquiries for Cape Town Luxury Villas. Who generated R262,000 in their first full trading month February 2016. An excellent result up over 100% on the previous managements 2016 average.

Cape Villas’ results is particularly interesting as it will show again how new management can make money from the website instantly. Impressive if selling a franchise and Impressive if selling the business.

Asset list with credible valuation: The assets for Cape Town Luxury Villas are the website, property database and supporting systems. Valued at R2,900,000 presented within a series of Videos: Asset Value of the Cape Town Luxury Villas Website and Supporting Systems
The videos present due diligence on the above valuation designed to be validated as a credible valuation by any quality web development company.

VAT returns for the last 12 months: Villa Secrets is not required to be VAT registered in the UK at its current turnover. The previous management of Cape Town Luxury Villas were not VAT registered, however VAT has been accounted for at a cost of 14% within the accounts that provide the owner discretionary cash flow statements.

Signed Lease Agreements: Cape Town Luxury Villas was run from a home office

Signed Employee Contracts: Cape Town Luxury Villas was previously run by the two owner operators. They did not have staff.

Copy of Lease / HP agreements with settlement figures and any contract of significance: There are no such contracts.

2.Establish the true income of the owner

This number, often also referred to as the discretionary cash flow to owner, is usually established the following way:

Profit/Loss from Income statements

1. Plus, total compensation of a single owner-operator.
2. Plus, adjustment of all other working owners’ compensation to market rate (manager replacement).
3. Plus, annual depreciation and amortization expense.
4. Plus, interest expense.
5. Plus, non-recurring expenses.
6. Minus non-recurring income
7. Plus, expenses not related to the business operations.

Every buyer will need to see what the true yield of your company is. Any experienced business broker will be able to give you a recasted income statement before you start marketing your business.


Cape Town Luxury Villas was manned by a two-person team; both being paid as owner operators from discretionary cash flow. If the business were to be sold to a partnership, and point 1 was amended to reflect this. Then according to the accountants the true income for the owners would be R1,018,000.

If one goes strictly by the formula presented above with only one owner and we need to account for the second owner’s replacement as a paid manager. Then a figure of about R25,000 a month would need to be deducted (R300,000 per year). So lowering the true income for the owner to R700,018.

Later on the valuations page, we deduct R100,000 for the hire of a small office and contibutions to pertol and phone bills.

3. Value your business

It takes an experienced Business Broker to help you establish the right value to market your business. Remember, the market value of your business is the estimated amount for which a business should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently, and without compulsion.

Do not accept the simple rule of thumb valuations that inexperienced brokers will try to explain to you. Valuations like straight multipliers of earnings, revenues or gross profits are not acceptable. According to the International Valuation Standards (IVS) published by the International Valuation Standards Council, an accepted method of valuing a business would be an average of at least 3 methods.


This section will need to be re written after discussions with Aldes, as a brief look at the website for International Valuation Standards Council and a look at their reports did not present any ways to value a business. We will need to be guided to the section within the report that presents the different ways to value the business.

For now, we have looked at the top results in a search from Google UK.

Entrepreneur.com presents a number of methods

1. The value of the business’s assets: What does the business own? What equipment? What inventory? After all, you’d have to buy all the same stuff if you were starting a teashop from scratch, so the business is worth at least the replacement cost.


The assets for Cape Town Luxury Villas is its website, software, database of direct to owner contacts for villas and its supporting systems such as AdWords and AdRoll.

For the website and software we have valued for the replacement cost, not the actual cost. The website and software actually took 4,500 hours. However we have only presented 1750 hours, a figure that will not be argued as a replacement cost by any quality web development team.

Including all of the above, Cape Town Luxury Villas SEO which sees 25% of bookings comes from Google free searches. It sees all the 500 pages on the website seen in Google searches and Cape Town’s largest property portfolio, (including all villas from CapeVillas.com and Razor databases) and lastly the ‘secret source’ the AdWords campaign. The asset replacement value of Cape Town Luxury Villas is well considered and accurately valued at R2,900,000

For more information look the series of the videos at: Asset Value of the Cape Town Luxury Villas Website and Supporting Systems (This section still requires a balance sheet.)

2. Revenue is the crudest approximation of a business’s worth. If the business sells $100,000 per year, you can think of it as a $100,000 revenue stream. Often, businesses are valued at a multiple of their revenue. The multiple depends on the industry. For instance, a business might typically sell for “two times sales” or “one times sales.”


Revenue in 2015 was R9,155,000 hence by following the above example the Revenue business value is between R9,115,000 and R18,230,000. The average being R13,672,500

3. Warren Buffett’s discounted cash-flow analysis. Which looks at how much cash the business generates each year, projects it into the future and then calculates the worth of that cash flow stream “discounted” using the long-term Treasury bill interest rate.

One quick and dirty technique is to divide the current yearly earnings by the long-term Treasury bill rate. For example, if the shop earns $10,000/year and T-bills are returning 3 percent interest, the business is equivalent to $333,333 worth of T-bills ($10,000/3 percent=$333,333, so $333,333 invested in T-Bills would return the same $10,000 income).


Presuming in the above ‘current yearly earnings’ are the discretionary cash flow to owner (shareholder profit.) which equal R1,018,000, which in turn (on 28th Feb 2016) = $63,000.

Then we use $2,100,000 x 3% = $63,000, so $2,100,000 invested in T-Bills would return the $63,000 of income.

$2,100,000 = R34,000,000

This seems like a very inaccurate way to estimate the value of a business!

Continuing with a valuation method from smallbusiness.co.uk

4. Multiples of Net Profit. Most sectors of business have a formula for valuing the business based on a multiple of net profits. Accountants can usually provide the multiple for your sector. If the multiple is, for example, five times net profit, then the value calculation is simple.

However, the following factors can increase the multiple used

a. An owner-run business can ask for a higher multiple when there are staff who are able to run the business when the owner is not there. When the business is not dependent on the owner, it is more valuable.
b. If the business has a unique system that sets it apart from the competition, that increases the multiplier further.
c. The next level of increase comes by having the business be capable of bringing substantial new product ranges to market.
d. After that comes the ability to create new distribution channels that bring new clients to the business.
e. Then, if the business creates a strong brand that affects everything about the business, the multiplier increases still further.
f. The multiplier peaks when the business proves that it is scalable and could be rolled out nationally, for example.

In all cases above Cape Town Luxury Villas scores: The business traded without the assistance of the owner. The business has many unique systems. The business has the potential to gain sole mandates on villas and so create new product ranges to the market. Villa Secrets are creating the ‘Villa Cloud’ and other systems to bring new clients to the business. Villa Secrets is intent on creating a strong brand, that effect everting about the business including internationally distributed magazines, intense content marketing and the creation of video.

Note, the future owners of Cape Town Luxury Villas are advised to purchase the company as a non-fee paying business that is a member of Villa Secrets. Note Villa Secrets does not rent villas or contract mandates. Villa Secrets promotes members of its network.

In looking at various sources the multipliers of net profit are between 2.5% and 8%, considering Cape Town Luxury Villas scores highly on all points mentioned above then at the least the multiplier should be 4.

As such If we consider the shareholder profit (discretionary owner cash flow) for a partnership is R1,018,000 and multiply by for we see just over R4,000,000.

Continuing with valuation methods from Easy Accountancy.co.uk

5. Multiple of ‘Normalised’ Profits. Average monthly/annual profits are adjusted to not include one-off factors like exceptional costs, one-off purchase. This will give you a good indication of immediate future profits. You’ll then need to add on any additional costs or gains that the company may make after being sold or invested in. This final profit figure is generally called ‘normalised’ profits.

To find a suitable valuation for your company, multiply this figure by anything between 3 and 5 times (this is the norm). Be careful not to overvalue your company at this point – smaller businesses should be at the lower end of this scale whilst most larger companies with a strong reputation can be towards 8 times.

This method is generally used by businesses with a track record of profitability.


This figure is complex, as there are competent strategies which will increase the profitability of the company that are considered on their own merit.

See the Strategic Growth Plan for Cape Town Luxury Villas and its accompany Spreadsheet which details 92 different points that will increase profit or save money mostly from using the systems described within ‘Software in development – ‘VS Mobile,’ ‘Magic Menus’ and ‘Software to be developed – ‘Divergent CRM’.

The spreadsheet (which has been made cautiously) suggests the following profit

2015: R1,019,000
Year 1: R1,407,000
Year 2: R2,944,000
Year 3: R4,497,000

Total for 4 years ‘Normalised Profits’ = R9,867,000 ($610,000)

as such ‘normalised’ profits including upgrades are at the very least R8,000,000 (+/- $500,000).

6. Lastly if the buyer or franchisee was already in the industry, the value can be valued by its customers, the amount of enquiries it generates.

Cape Town Luxury Villas generates about the same amount of enquiries that Cape Villas.com produces, despite not having a 14-year track record of previous clients.

Currently we have about 500 enquiries within a system that can be assessed. An experience agency would likely value these enquiries consistently with the R4,000,000 discretionary owner cash flow valuation seen above. If working on the 4 year multiple.
In conclusion

Alders Atlantic have suggested an accepted method of valuing a business would be an average of at least 3 methods.

This we presume does not include the company assets valuation which should be added to the average methods for business valuation per current and future performance.

So far we have 5 valuations and the asset value

1. Asset value = R2,900,000

Plus an average of

2. Revenue = 13,600,000
3. Warren Buffets discounted cash-flow = R34,000,000
4. Multiples of Net Profit = R4,075,000 (multiplier = 4)
5. Multiple of ‘Normalised’ Profits (4 Year) = R9,268,000

Ignoring the Warren Buffets valuation, and using methods 2, 4 & 5 we reach
R25,600,000, which divided by three equals R8,981,000 ($560,000 on 29th Feb 2016)

Plus the asset value of the assets of the company of R2,900,000

Total: R11,881,000 ($741,000 on 29th Feb 2016)
However, we await word from Alders Atlantic to guide us to the section with the International Valuation Standards Council which presents valuation methods.

4. Choose an experienced business broker to sell your business

Why choose Aldes?

What my broker should have

1. Valid Fidelity Fund Certificate
It is illegal to charge commission if the broker is not in possession of a valid FFC.
2. Valuation tool
Most sophisticated tool available in South Africa
3. Maximum exposure for my business (however confidential)
Through Aldes network exposure to 50 offices throughout Southern Africa
4. National/international network
Allows for optimal marketing to a broad audience of potential buyers.
5. Thousands of potential buyers
Aldes has accumulated over 9000 registered qualified buyers in just the last 18 months


Aldes is the most respected business broker in South Africa, staffed by persons with real life experience in business.

5. Contract with a broker

There are usually two standard ways of contracting with a business broker.

Open Mandate
An open mandate has no set time period and can be given notice any time. The fact that the mandate is open means that there can be more than one party working on the mandate at the same time. This has disadvantages, the most obvious being a possible breach of confidentiality when you have too many people punting your confidential information around.

Exclusive Mandate
This is a mandate whereby you contract with a single Broker or (as with Aldes) group of Brokers for the sale of your business on an exclusive basis. The mandate usually has a time period of 6 to 12 months. It goes without saying that you need to select your Broker very carefully if you contract with him exclusively. If you have convinced yourself that the selected Broker can offer you the best exposure and service, there are a number of advantages to an exclusive mandate.


Being in the industry where exclusive mandates are precious, we are fully aware of the advantages of an exclusive mandate.

However, we need to consider the Villa Secrets franchise plan as a part of sale process of Cape Town Luxury Villas.

It is mentioned that the mandate time is usually between 6 and 12 months. However, within two or three months Villa Secrets intends to approach (or have Alders approach) one of the big South African estate agents with intent on creating a ‘super franchise’ a collection of websites which if not sold may include Cape Town Luxury Villas.

In this case Villa Secrets are not looking for a large franchisee fee, rather a commitment to staffing the Cape Town office, and positive discussions regarding the creating of new Villa Secrets offices in the Seychelles, Mauritius and other prime African locations.

Following on from this ‘super franchise’ or as we say ‘Primary Network’ Villa Secrets has identified over 90 other locations that require franchises.

It would likely be more profitable in the long term for Alders to broker the franchises, not the single sale.

However, as they say, ‘cash is king’ a good sale price would guarantee funding to hire additional programmers and create the ‘Divergent CRM’ and place us on 4 continents by the end of the year.

If a sole mandate is agreed upon it needs to include the flexibility and will to assist Villa Secrets in selling franchises. There is no text on franchises that we could find on the Aldes website. However we believe that the right broker could assist greatly in the selling of franchises.

In particular, we have identified Andrew Hubbard as ‘the right broker’ due to his experience in software companies and Hotel chains. It is hoped that Andrew Hubbard will be uniquely qualified to assess and sell franchise for a travel company that is at its heart a software framework. That intends to succeed where others do not, due to the software it is creating and the web framework that it supports.

6. Discreetly place your business in the market at agreed price

Your Broker should have a number of potential buyers in his buyer’s database, which would be the first port of call for new listings. At the same time the business should be marketed on various websites and/or other mediums, while at the same time keeping the fact that your business is ‘for sale’ totally confidential


In addition to the brokers buyers list we have a list of about 30 potential buyers, and a list of favourites from within that list.

Local Villa Rental companies, local tour operators, international villa rental companies and international travel companies will all appreciate the enquiries and shareholder profit. International companies and local tour operators would also see great benefit from the portfolio of villas. Note Cape Town Luxury Villas has the database of Cape Villas, Razor and its own selection of villas, which collectively make the largest database available on any website.

In many cases the Google AdWords account, the long tail keyword SEO success and the software development in place and in creation will be desirable to both local and international buyers.

7. Don’t rule out seller finance

Statistic show that sellers offering seller finance for between 10% and 40% of the purchase price will achieve an up to 18% higher purchase price for the business. The simple reason for this is that the buyer that really wants your business, but can’t really afford to pay the purchase price in cash, will be guided by a good broker to rather offer a higher price for a structured deal, than compromise on the choice of business.

On the other hand, if you do not need all of the cash immediately, you could charge the buyer an interest rate that is substantially higher than the rate that you would achieve if you had to invest the money at the risk-free interest rate. The interest plus capital could be a very nice source of income for the next period of time, and can be structured to be very tax effective.

The business effectively remains yours until full payment of the purchase price, so that the risk is fairly limited. Another advantage is that you are clearly showing your confidence in the business by accepting this kind of deal.


We are not opposed to seller finance, making a sale over two or three years with stage payments is an option we would consider.

The money generated from the sale will be reinvested mainly in software development and content marketing staff. In a two-year development project, so long as we have the finance for our development, we are happy to be paid in stages.

8. VERY IMPORTANT: Qualify the potential buyers

One of the most important aspects of selling your business is to restrict your focus to buyers that are willing to sign a confidentiality agreement, while at the same time providing a clear indication of the ability to finance the transaction. You are providing potential buyers with the most intimate details of your operation, so it is only fair to expect the same from the buyer.


In our limited experience (1 test) potential buyers from other agencies are happy to sign a confidentiality agreement. It is par for the course in the technical side of the industry.

In terms of qualifying the buyer, as Cape Town Luxury Villas is the prototype for Villa Secrets its success, as a franchise or as a not franchised member of Villa Secrets is important to Villa Secrets.

The better Cape Town Luxury Villas does in Cape Town, the more attractive a website created from the Villa Secrets framework in international locations. For both franchise and member deals. For instants St Bart’s, where villas are more expensive and there are more of them, but advertising on Google is cheaper. In terms of selling a Villa Secrets website (one we had acquired a good level of inventory) one could imagine a figure of $1 million. Or more if Villa Secrets magazine was created or in the pipeline.

As such, when considering buyers if all else is even we would sell to the buyer who was likely to have the most success.

That buyer would certainly take the option for the software upgrades and membership in Villa Secrets Network

9. Negotiate the deal

With the assistance of the broker this is the most important aspect of the whole process from your perspective. The broker will act as an intermediary during this process until such time as an agreement has been reached between the parties. It is important to focus on all important aspects of the deal, including, but not limited to: Payment of Deposit, effective date of the transaction, due diligence period and process, Take-over period with involvement of seller, payment of full purchase price, possible interest and security.



General Note, Nick Ray Ball does not enjoy the actual selling process, he is happy to prepare material and work with the sales person on perfecting the material. However, he is keen to work on the software and international development.

Nick of course appreciated that any purchaser of Cape Town Luxury Villas or international franchise partner would need to discuss this matter CEO to CEO. So long as the sale price is not a part of this conversation Nick Ray Ball is keen to help and discuss and CEO in regards to the effectiveness of the system. And indeed give individual advise of the path and CEO should take.

10. Be prepared for the due diligence

The Due diligence process is without doubt the most painful period of the whole process. You as the seller really want to bank the money and move on with your life now that you have the deal.

The buyer’s biggest fear on the other hand is to pay across his hard earned money, only to find that he has been ripped off.

You should be totally proactive during this period to show the buyer that he has bought a good business, and that there are no ‘skeletons in the closet’.

Your broker will act as an intermediary between the parties and should be able to manage any issues that may come up and advise both parties accordingly. Beware of the broker that is never to be seen again as soon as the signatures are on the contract.


In terms of elevating the fears of the buyer of being ripped off, we represent Nick Ray Ball’s commitment to a polygraph on this point or any related point.

We are prepared for Due Diligence. however, the buyer should be aware of what we have and what we do not have before the Due Diligence process starts.

We have banking data that shows we were paid 26.9% of actual turnover by the 2015 Cape Town Luxury Villas management. These financial data have been submitted by Williams & Co accountants to HMG revenue and customs UK. As such one can assess the total turnover as the money recoded by Villa Secrets plus the additional 73.1%.

This data matches with the individual booking data (the Budget Master) presented by the previous management. The previous management may well have not included some bookings on this spreadsheet. However, there is no way the previous management would have mistakenly added bookings to the ‘Budget Master’ as they would have had to pay out money that they did not have to. And this was checked by them on a number of occasions.

We do not have the bank statements from the client to owner bookings made by the 2015 team. We could probably compel them. We approached Bowman Gilfillan regarding this, however they asked for a R100,000 deposit before looking at the case, so we decided to wait and see what lawyers Aldes recommended instead. If this is a necessary action.

On the 7th March 2016 we will have access to the first month and a half trading figures from the new managers of the site in a separate accessible bank account.

Each month that goes by we will provide more data, and we expect to do well after March, as currently the management team are run off their feet with too many enquiries, as they are also manning www.CapeVillas.com. Indeed, there are so many enquiries they have asked Villa Secrets to stop new marketing for the next 6 weeks.

Lastly, in Due Diligence we represent our willingness to accept a two or three-year payment plan as we are confident in the future success of Cape Town Luxury Villas. In this regard it has been a very useful exercise seeing how well the new management team performed. there was no fluke, no surprises. The site generates enquiries and has the stock. It’s just a matter of converting them.

And to improve we have the Strategic Growth Plan for Cape Town Luxury Villas and the systems described within ‘Software in development – ‘VS Mobile,’ ‘Magic Menus’ and ‘Software to be developed – ‘Divergent CRM’.

The software options will be sold as ‘additional items’ to be paid for one by one, or in the case of the Divergent CRM as different components are created and working on or for the Cape Town Luxury Villas.com website. These ‘additional items’ will be paid for after instillation is complete, tutorials are created and the management has used or benefited from the systems.

Strategic Growth Plan for Cape Town Luxury Villas


Strategic Growth Plan for Cape Town Luxury Villas

By Nick Ray Ball 29th Feb 2016

Considers content marketing, mandates, networking and the benefits of using the future Villa Secrets software, which can increase profit by 400% in three years

Point nine of ‘10 Ways to maximize the value of your business’ asks for a Strategic Plan: ‘A written strategic growth plan that clearly documents the areas the company can grow can be an asset to buyer.’

In this document we present such a plan in 2 parts. First is a strategic growth plan that considers the current business and includes Villa Secrets membership & Content Marketing.

And second is a plan that considers the effect of using the Villa Secrets software in the development queue: VS Mobile, Magic Menus & the Divergent CRM.

Part 1. Current Business

In this strategic plan we consider the Cape Town Luxury Villas website as it is now including membership in Villa Secrets. See ’10 Advantages for membership of the Villa Secrets Network

Content marketing – (Blog/Magazine)

First for growth we advise that the future managers either hire their own content writer or purchase one ‘fresh’ article/blog like: Bond House Villa or Pentagon Villa every 2 weeks for R3,500 each. Posts will appear in the Cape Town Luxury Villas blog, which we shall be rebranding as Cape Town Luxury Villas Magazine.

Alongside some local SEO that we are currently performing and guest blogging on hi domain authority luxury travel sites, over a year with good content marketing one could expect to double free traffic from Google and Bing. Which currently makes up about 25% of enquiries generating R350,000. For a pay out of R91,000 one could reasonably expect a return of R350,000 and further gains year on year.

In addition, the great looking magazine pages such as: Oceana Villa & Maison Noir Villa really impress clients, and improve conversion rates in general.

Property Mandates

If we go back to the 2014 Cape Town Luxury Villas strategic growth plan www.cape-town-luxury-villas.com/info/ElevatorPitch.html, we see how the recruitment of villa mandates accounted for 64% of the projected turnover.

However despite a database of over 400 active villa owners, who may be interested in signing a mandate, the previous management did not make any approaches.

We strongly advise the new management to approach and recruit villas to exclusive or part exclusive mandates. This avenue should be a fundamental pillar of any strategic growth plan.

Being a member of Villa Secrets, the new management team will be able to offer a Villa Secrets mandate to owners. See updates in the Villa Secrets business blog soon for more on this.

Agency Networking

As Cape Town Luxury Villas has the largest database of villas, the previous management received enquiries from Agency/Property Management companies such as Cape Portfolios and Sea Sky Villas. This was when they had an enquiry for a villa but had no availability within their own portfolio.

If the new management were of a social disposition, one can create growth simply by networking within the Camps Bay villa community. Which is done by attending new villa presentations by agencies and when one has villa mandates signed to create ‘show days’ with drinks and canapés.

Use A CRM (Consumer Relationship Management)

Another strategic growth option is simply to get more organised and use a CRM, HubSpot at $10 a month per user would improve growth. Salesforce at $130 a month would improve more.

However, Villa Secrets is creating a suite of additional functionalities for the above CRM’s that will greatly improve efficiency.

Part 2. Future Business

In this, the second part of the Cape Town Luxury Villas strategic growth plan, we consider the benefits of using the Villa Secrets software in the development queue.

This is unlike part one which considers only the current Cape Town Luxury Villas website and systems plus an annual R91,000 content marketing cost. There is a cost for installation of the software. Albeit paid in stages, per item, only after successful installation and training is provided.

However the software plans are years ahead of their time!

This section is very detailed. To start we have descriptions and over 5 hours of video on the software: VS Mobile, Magic Menus & the Divergent CRM.

To assist we have created a spreadsheet that plots 92 different increases in turnover or saving of costs. You can download it by clicking the following link: Additional CTLV Profit Streams-3 Year Normalised Profit Projection

The spreadsheet its summarised on this video. Which also presents a 4 year ‘normalised profit’ projection.

As we can see the 92 different actions applied to Cape Town Luxury Villas in the video increase profit from R1,018,950 to R4,225,409 in year three. This includes generous expenses and low estimates.

The majority of the increase comes from improving the efficiency of Cape Town Luxury Villas. Currently, about 1 in 30 clients that come to the website make a booking. VS Mobile, Magic Menus & the ‘Divergent CRM’ in its many parts greatly increase efficiency.

This added to the recruiting of mandates and additional content marketing and 24/7 live chat is set to increase profitability by a factor of 4.

Asset Value of the CTLV Website and Systems


Asset Value of the Cape Town Luxury Villas Website and Supporting Systems

By Nick Ray Ball 11th Feb 2016

Web development took 1,673 hours which is valued at $95,000.

The portfolio of villas in Cape Town, (which is now the largest of any agency), the supporting technologies, organic search engine position and the use of Cape Villas.com as a staring point is valued at $94,000

On this page we see a series of videos that performs due diligence on the $189,000 estimate of the asset value of the Cape Town Luxury Villas website. We assess the value in two sections, first web development which took 1,673 hours and is valued at $95,000 and secondly the supporting technologies and organic search engine position which is valued at $94,000

(Note the value of the website and supporting systems changes during the series of videos, in particular the value attributed to free Google searches which rose after seeing that 28% of enquiries were free from google searches)

As a prequel we present a blog page about the history of the projects web designer and system architect Nick Ray Ball entitled Nick Ray Ball – 34 years of code.


1. Introduction to the cost for development of Cape Town Luxury Villas

In this introduction we talk mention our senior programmer is Zend certified and we look at 47 different aspects of the design and asset value of the Cape Town Luxury Villas website.

Seen within 6 sections: The (UI) User Interface, The (CMS) Content Management System, Web Technology & Software Framework, Other Items including, system architecture, design and project management. New developments developed in 2015 deployed in 2016 & Items that add value to the Cape Town Luxury Villas website

(Note one mistake, Google AdWords costs is 15% of turnover not income)

2. The UI (User interface), what clients and Google see.


In this video we look at the User Interface, sometimes called the front end. Specifically, we look at: The logo, header and footer, then the home and search pages, galleries within the navigation, the navigation and more options dropdown, the villa/product pages, the villas nearby display, the XML sitemap and the about us pages.

3. The CMS – Content Management System


In this video we look at the CMS, the Content Management Suite which includes options for: Villa search’s, adding villas general details, photos, prices, Google maps positioning, availability, sub menu creation, navigation system creation, the key word phrase organiser & an address book for safaris.

4. Web Technology – Software – Software Framework


In this video we look at additional CMS applications that go further that standard CMS’s. Software systems built into the fabric of Cape Town Luxury Villas.com

Including: A API connection to Razor/MyBookingPal, an enquiry system with CRM (Customer Relationship management) functionality, an attractive and fun favourites system, SEO (Search Engine Optimization) auto generated meta title, description and H1 headers which interacts with an attributes system that assigns points and preferred position rules to each villa. We see how this places Cape Town Luxury Villas in positions 1 and 2 in Google Organic for long keyword phrases such as: ‘Villa, Cape Town, seven bedrooms, six star luxury, Camps Bay’

5. Other Items including, system architecture, design and project management


This section details: Stabilization& bug fixing, experiments, systems architecture, web & graphic design, project management, client liaison, info pages & the expandable framework

6. New developments developed in 2015 deployed in 2016


New development for Cape Town Luxury Villas, created in 2015 added in 2016. Includes: AdRoll ads, WordPress blogsite integrated into Cape Town Luxury Villas as the start of a significant content marketing strategy to increase links and visitors. Blogs, the creation of many social networks that automatically add posts each time a new blog is created. We are also in the process of adding a new footer including membership of ASTA and PRS, an addition to the home page and new about us pages.

7. Items that add value to the Cape Town Luxury Villas website


In this the last video we present the supporting technologies and organic search engine position seen through Google Analytics. We look specifically at the value of starting with the CapeVillas.com website, which had 11 years of development and consider the advantages of the system architect/webmaster knowing the industry first hand.
We put a value to the database of villas including 950 from CapeVillas.com over 400 from Razor by MyBookingPal and a further 165 villas added by the 2014/2015 management team. We place a value to the Google AdWords campaign which manages to place Cape Town Luxury Villas in the all-important top three positions for a far lower price than is paid by competitors, we consider brand awareness & data inputting. (Note Cape Town is the world’s most expensive location to advertise the word ‘villas,’ and yet for just 15% of turnover Cape Town Luxury Villas is prominent in all relevant searches.)

We also consider the Google Organic search placement and enquiries which Google Analytics shows to be 28% of enquiries and we consider some new SEO applications we are currently deploying.

Cape Town Luxury Villas – Financials 2015


Financials and Management Accounts

for Cape Town Luxury Villas.com

By Nick Ray Ball 19th Feb 2016

This page presents Cape Town Luxury Villas 2015 financials and 2016 management accounts.

In 2015 Cape Town Luxury Villas recorded an income of $650,000, with Share Holder profit for 2 directors of $72,000. So far in 2016 figures are greater.


Cape Town Luxury Villas Team 1

Financials for Villa Secrets UK tax return in 2015

2015 Financials for Cape Town Luxury Villas.com

Click here to Download the Spreadsheet

Income: ZAR 9,155,291
Villa Owner Payments ZAR 7,720,760
Turnover: ZAR 1,434,531
Marketing & VAT: ZAR 415,680

Shareholder Profit*: ZAR 1,018,851 ($72,000) (£50,942)


Cape Town Luxury Villas Team 2

2016 Management Accounts

From 18th January 2016 to 1st March 2016

2016 Managemen

Click here to Download the Spreadsheet

After a long running dispute over marketing, in mid-December 2015, Villa Secrets changed the Cape Town Luxury Villas management, this transition took up to the 18th January 2016. At which point the we restarted the Google Ads campaigns and the management team from Cape Villas.com starting receiving the enquiries from Cape Town Luxury Villas.

This exercise proved very useful, as in February 2015, in their first full month the new team made double the average profit of the old team, showing to any potential new owner or franchisee, that the business model is a success and will show results immediately.

In its first full month, February 2016 the new team from CapeVillas.com made 140% more turnover than the old teams 2015 yearly average.

Income: ZAR 1,336,041
Villa Owner Payments ZAR 1,104,371
Turnover: ZAR 262,620
Marketing & VAT: ZAR 33,100
Balance: ZAR 203,396 (Shareholder Profit*)
Balance in USD: $12,780
Balance in GBP: £9,034

2016 Average Shareholder Profit so far = ZAR 2,440,748 (£112,274) ($159,000)

* A note on Shareholder profit

Williams and Co accountants, who create the Villa Secrets tax return valued the 2015 shareholder profit as seen above. If a like for like management structure, with a pair of directors contributing their full time to the venture, working from a home or pre-existing office. Or an existing travel company took over directorship.
However, in point 2 of Aldes Atlantics 10 Points on Selling a business it suggests one should calculate shareholder income on a single director. With manager replacement compensation for a second director. If so then 2015 shareholder profit would be about R300,000 less at R700,000.

However as the desired purchaser or franchise or Cape Town Luxury Villas would not be a single owner/director instead a partnership, in valuations, we have used the Williams and Co Shareholder profit.

Index: The Sale or Franchise of Cape Town Luxury Villas

Index for the Sale or Franchise of Cape Town Luxury Villas


Index for the Sale or Franchise of Cape Town Luxury Villas

On this page consider the questions asked by value for Aldes Atlantic, regarding the value of Cape Town Luxury Villas. www.aldesatlantic.co.za/10-ways-to-maximize-the-value-of-your-business

Questions and answers follow

1. Cash Flow

Cash flow is the single largest value driver for most businesses. Think of ways to improve your income on a sustainable basis. Buyers are suspicious of short term jumps in cash flow. Try to make the cash flow as consistent and predictable as possible.