Written by Robert Kuckhoff, iXperience '15 (Finance), University of Virginia
After spending the past four weeks learning the ins and outs of finance, my three iX teammates – Braden, Aryan, Kennedy, and I – were ready to get out of the classroom and dive into our private equity internship. Within minutes of finding our desks, we were given the responsibility of turning a luxury villa into a profitable business. Considering my background in the hospitality industry consisted of family vacations and upsetting the staff of a hotel in Cancun, I felt wildly unqualified to be trusted with the future of a multi-million dollar villa.
Although four weeks of intensive classroom sessions honed our technical financial skills, it became apparent that we would need to think like business owners to successfully implement our financial knowledge.
As the affected owners of the business, we entered into the amelioration process with the objective of increasing expected returns to the highest degree possible. Through our business mindset, we were prompted with the question, “What is best for the business?”.
So what is best for a luxury villa? In order to understand our villa, we utilized a SWOT analysis to peg our villa’s position in the hospitality sector. On the grounds that many of the villa’s features were most frequently found in the upper end of the hospitality industry, we decided the best way to understand our luxury villa was to do an analysis of other comparable properties in the upper end of the hospitality industry. From our competitor analysis, we found that the best of the best were able to succeed through remarkable feats of branding. For example, one villa partnered with several luxury perfume brands and vineyards to host a high-end wine and perfume pairing which resulted in many articles and blog posts.
Considering the best villas had the best brands, we sought to find ways to promote our villa’s brand that would optimize expected returns. For starters, we formulated a strategy to bring our villa up to speed with the competition. The villas website was taken into the crosshairs, but execution became increasingly difficult for the reason that each team member seemed to have different ideas on how to improve the website. Calamity ensued as each member of the team sought ways to promote his idea over others. It wasn’t until we took a step back and had a moment to reflect that we were able to realize our error. After regaining composure, we realized that there could be several solutions to a problem. In fact, through careful financial modeling, we found that a combination of several ideas were the most effective to the problem. Riding the momentum of our momentary victory, we created other marketing and implementation strategies to promote our villa better than the competition.
After several late nights and an amount of coffee that would offend the public’s sense of decency, we presented a financial model and marketing strategy for the villa to management. Fortunately, our boss loved it, and in less than an hour after our presentation, I was on the phone with a travel consultant in London pitching him a partnership between his agency and the company’s villa. Our weeklong project culminated in presenting our marketing strategy to the partners of the firm and generating over 30,000 Rand in revenue. Not bad for a group of unpaid interns.
I left our first project with three lessons that were only possible to realize after thinking like a business owner:
- In order to go forward, sometimes you need take a step back. It wasn’t until we took a step back to analyze the market that we were able to move forward to find a solution.
- There can be several solutions to a problem. However, in case of the business owner, the best solution is also best for the business.
- The best way to invest in a business is to invest with respect to the long-term. As we found, the best way to ensure higher returns were to invest in a long-term branding strategy.
Through combining classroom knowledge and internship experience, I believe that I can begin to further develop my entrepreneurial mindset in order to be effective in finance. I couldn’t imagine finding an opportunity that combines these two aspects as well as iXperience, and in the end, I am thankful for the iX staff making it all possible.