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Cape Agulhas is a small coastal town situated at the southern tip of Africa. It is a popular holiday area with several holiday homes and beach houses. The camping/caravan park, situated close to the sea (about 20 metres from the highwater mark), belongs to the local municipality. It has been neglected and has therefore failed to attract holidaymakers, so it is currently not a successful business enterprise. Mr Khoza, a local entrepreneur, negotiated with the municipality to hire the camping/caravan park so that he could upgrade the facilities and manage them as a profitable business. The municipality agreed to rent the park to Mr Khoza for R30 000 per month. This amount includes the supply of fresh water but excludes electricity usage. An analysis of the business revealed the following:
- The camping ground is divided into 100 stands, with a water tap and an electrical box on each stand.
- There is one ablution block suitable for 100 people at a time (50 males and 50 females).
- There is one laundry area with ten heavy-duty washing machines and ten wash basins with washing lines.
- There is one access gate. The fencing around the park is not secure,
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