They wanted half a million. It sounded like fun. But my golf dream ended up in a bunker

Nigel Swabey, 47, is chief executive of Scotts of Stow, the mail order company. In 1980 he founded his own consultancy practice, NSP Group, and built a series of specialist mail order and retail businesses including Innovations and the Leading Edge retail chain. In 1988, the company went public, becoming Innovations plc. Then his problems began.

"In 1988, my family trusts sold most of their original equity stake in the Innovations group and found themselves quite a few million pounds richer. It was around that time that I was approached by a golf promoter who was looking for two additional investors prepared to put in pounds 500,000 each to purchase a plot of land for the construction of a tournament-standard golf course.

'This sounds like fun,' I thought. What attracted me was the potential for capital growth, coupled with the fact that I would enjoy participating in the management of the project. I am a golfer - though I rarely have time to play - and I considered that my direct marketing skills could be useful in terms of promoting the club.

The land was in an area of outstanding natural beauty within the M25, and it already had outline planning permission for an 18-hole golf course. We had Neil Coles, Bernard Gallacher, Tony Jacklin and Greg Norman take a look, and they all agreed that the site was perfect for tournaments.

Meanwhile, the golf authorities had published a report which indicated that there was a massive shortfall in the number of courses relative to the number of people wishing to play. It looked like an extremely good investment, so I roped in a friend, he put in pounds 500,000 - as did my trust - and within two weeks we had purchased the land.

Unfortunately, what was supposed to be a one-off investment rapidly turned into a constant drain on our capital. First we had to pay the PGA to design the course, along with its choice of architect, Neil Coles. Then there were town planners' fees and so on.

Next we had to drill for water to see if we could irrigate the course without using the mains, and that alone cost pounds 25,000. Within a very short time we had spent more than pounds 200,000.

However, once we had done all this, we started getting approaches from more than a dozen intermediaries representing mostly Japanese companies who were interested in buying the land, and within l2 months of acquiring it we were offered pounds 4.5m.

I said to my partners, 'Hey chaps, this is an interesting turn of events ... maybe we should think about accepting'. But they said 'No, let's go back and see if we can get a little bit more.'

While the first potential purchaser was deliberating, a second offer came in for pounds 5.5m. Again we decided to see if we could get a little bit more. Very soon afterwards we received an offer of pounds 5.8m, so I went back to my colleagues a third time, saying it was a very generous offer and I thought we should accept. And they said, 'Let's just ask them to go the extra mile'. So I did, and the purchaser went silent.

Shortly after, the Tokyo stock market crashed. Somewhat concerned, I went back to each of the intermediaries in turn, only to be told that these companies were reviewing the status of their investments and were disinclined to invest further.

So there we were, with full planning permission for an 18-hole tournament players' course and a massive 1,800 square metre club house, but no buyers.

My colleagues suggested we should start building. I pointed out that this would mean building with debt finance. It was around this time that a number of other developments which had been built with prospective members' debenture money had started to experience financial difficulty, and I wasn't prepared to go that route so I vetoed the idea. It was probably the only thing I did right.

By this time I was very much aware that I hadn't thought ahead before putting money into this project. I'd been too busy thinking about the pro shop and the merchandising.

I had grand designs for the development of the ultimate catalogue for all products related to golf and considered that this would be a good way of making the general promotion of the club self-liquidating by virtue of the profits, but I hadn't given enough consideration to the fundamental task, which was the development of the course itself.

I had been carried along with the euphoria of this being a no-risk, real- estate based business. What I should have done, before recommending it to my family trust, was to consult an impartial expert in the golf sector who could have advised us of the pitfalls.

In the end, my partners and I simply had to acknowledge that we had neither the experience nor the time to develop this course, and that the best solution was to sell our investment. The hard part was accepting that whoever buys it will be able to profit from our mistakes.

If only we hadn't been greedy, we could have sold at a huge profit. Instead, we have 190 acres of land which is currently generating an income of precisely pounds 3,800 a year for the harvesting of the hay.

It will probably go for about pounds 1.4m, which is less than we have put in. We'd have been much better off letting that money earn interest for the last eight years."

Corinne Simcock would be interested to hear from readers who have cautionary tales of their own to tell.