"We almost did it several times. We were just about to build the resort when the economy went down the tubes and so we had to pull back again. So now, it was just the right time. But it's always a risk, you never know what the economy's going to be but you can't live in fear," she said.
The legendary country singer and entertainer is reported to be worth between $450 million-$500 million during her career which spans 50 years covering singing, acting, writing and business launches including the theme park.
The songwriter joined forces with Herschend Family Entertainment group in 1986 to rebrand their existing "Silver Dollar City" theme park into the Dolly-inspired "Dollywood".
Parton said the lawyers and accountants that were advising her at the time thought she had "lost her mind".
"I had such a burning desire to do it, I thought -- I'm doing it I don't care how smart you think you are. I know you're my Hollywood lawyers and accountants and all that, but I think I know a little bit more about me than you do. And so I went ahead and done it. Got rid of them. And it proved that I was right to go ahead with my plans," she said.
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Dollywood is now Tennessee's most visited tourist attraction, drawing more than two million visitors every year.
Part of the singer's vision for the complex was to provide employment for local people, but she puts her success partly down to her faith.
"I pray every day that God will put all the right things, all the right people and the right projects in my life and to take all the wrong things and the wrong people out, and I really pray and believe that he does so I have to swallow my pride and take those things as answers," she added.
CNBC Meets: Dolly Parton is coming soon.