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 Start-up risks countered with research and planning

 

 After a lifetime's worth of intense  organisational and managerial experience, you would think that starting a  straight-forward lifestyle-type enterprise would be breeze. It certainly is  not, says Willie Naude, 59-year-old owner of Big Sky Cottages, a brand-new  mountain resort with ten self-catering chalets near Wolseley in the Western  Cape.

Naude has no problem planning and executing a project. As a technical director of television productions he has been organising and managing complicated sets and shoots for the past three decades. He also has no trouble learning the intricacies of the hospitality industry. As the son of hoteliers, he grew up in hotels and has absorbed a deep knowledge of the trade.

Rather, says Naude, the difficulty of starting a new business with his amount of experience lies in knowing that any number of things could go wrong, even with a relatively straight-forward business venture. “When you’re young, you’re too inexperienced to understand the risks involved, so you just go for it. But at my age you are aware of the risks, and it’s scary,” he says.

Naude has set out on his own before, but as a young man. In the early eighties, he had been working as a television lighting technician of SABC TV for only four years before deciding to become a freelancer, and has worked for himself ever since.

About ten years ago he bought a 67ha farm on the slopes of the Mostertshoek Mountain. With its beautiful views of the Wolseley valley, Naude saw its potential as a tourism project, and as the ideal venture for his retirement one day from the intense toil of the film industry one day. The problem was that he had to raise substantial finance to build a resort.

Naude assuaged any anxieties he had about risking everything on such a venture by doing thorough research and planning. He carefully looked at other similar offerings in the valley so as to design a better offering and to make sure that the market was lively enough to sustain the cottages he planned to build.

Situated just an hour’s drive from Cape Town and with three popular wedding venues close by, there was definitely enough demand for more tourist accommodation, and Naude set about designing ten self-catering units with a communal boma and swimming pool. His financial projections showed that the project would work with an occupation rate of only 30%.

Such excellent prospects were not good enough for the banks, however. Naude tried every one of the big banks, but they declined because the project was too new and unproven for their risk-averse temperament, and the finance he needed to build the cottages exceeded the value of the property at that stage.

Fortunately, he sent his plan to Business Partners Limited (BUSINESS/PARTNERS), who based their approval of the finance application not only on the value of the property, but on the potential of the business and Naude’s entrepreneurial attributes. When BUSINESS/PARTNERS officials drove out to inspect the undeveloped mountain slope, “they saw what I saw”, says Naude. His business was given a R5.5m loan, repayable over ten years.

For the past six months, Naude has been overseeing the building of the resort himself. It has been a painful process, but for an experienced project manager like him, not unexpectedly so. He has had to hire and fire no fewer than four contractors before the earthworks were up to standard. “It is always more difficult than you plan for,” he says.

A tricky part of starting Big Sky Cottages was that he had to scale down his television work for the duration of the building project, as well as for the next few months to ensure that the business starts up smoothly. As freelancer, it is always risky and difficult to turn down work, but Naude has managed to save enough to bridge him over the start-up months of his new business, and he has taken on one or two television productions to keep the pot boiling. He also has the support of his wife Nelia Retief, a local estate agent who takes care of the marketing and administration of Big Sky Cottages.

With the worst of starting up the venture behind him, things are looking up for Big Sky Cottages. The first bookings are already trickling in even as the finishing touches are being put on the farm, which also boasts a tame herd of springbok and a boegoe plantation. Naude, who plans to be an “unobtrusive manager” by allowing the guests to come and go on their own, hopes to return to his television work for a few years before tapering off to settle down on the farm.

He knows that there is always the risk that things could won’t work out that way, but it has never stopped him from finding a way to fulfil his vision. 

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