Money to burn! Francesca Eastwood and boyfriend Tyler Shields set a $100,000 Hermes Birkin bag on fire in new shoot - Daily Mail Money to burn! Francesca Eastwood and boyfriend Tyler Shields set a $100,000 Hermes Birkin bag on fire in new shoot - Daily Mail

Sunday, May 27, 2012

Money to burn! Francesca Eastwood and boyfriend Tyler Shields set a $100,000 Hermes Birkin bag on fire in new shoot - Daily Mail

Money to burn! Francesca Eastwood and boyfriend Tyler Shields set a $100,000 Hermes Birkin bag on fire in new shoot - Daily Mail

By Jade Watkins

|


It is one of the most sort after handbags in the world and customers are often required to go on a very long waiting list in order to obtain one.

But the fashion world is without one less Hermes Birkin bag after Francesca Eastwood and her boyfriend Tyler Shields set one on fire in a new photo shoot.

The 18-year-old daughter of legendary actor Clint Eastwood and her photographer beau burnt the $100,000 crocodile skin version of the bag in the name of art.

Hot stuff: Francesca Eastwood and her boyfriend Tyler Shields set a $100,000 Hermes Birkin Bag on fire in a new photo shoot

Hot stuff: Francesca Eastwood and her boyfriend Tyler Shields set a $100,000 Hermes Birkin Bag on fire in a new photo shoot

In one snap, Francesca is also seen fanning the flames even further by blowing on it with her red-painted pout.

As well as engulfing the leathergood in flames, the teenager also put the handles of the bag in her mouth in order to play a game of tug of war.

The pair finish off the tote by slicing it in half with a chainsaw.

Destroyed: The pair finish off the tote by slicing it in half with a chainsaw

Destroyed: The pair finish off the tote by slicing it in half with a chainsaw

This isn't the first luxury item that has been destroyed for one of Shields's shoot.

A pair of Christian Louboutin shoes were also wrecked in the name of photographic art.

The new pictures come after Shields‘ recently opened his Mouthful exhibit in support of Love is Louder in Los Angeles.

Opening night was last weekend and actress Emma Roberts was one of the guests-of-honour.

It's mine! As well as engulfing the leathergood in flames, the teenager also put the handles of the bag in her mouth in order to play a game of tug of war

It's mine! As well as engulfing the leathergood in flames, the teenager also put the handles of the bag in her mouth in order to play a game of tug of war

The event, held at a private studio, was the most exclusive ticket in town as guests clamoured to get close to the cult photographer.

Also in attendance at the exhibit, presented by A/X Armani Exchange were Tyler‘s girlfriend Francesca, Harry Shum, Jr., and Modern Family‘s Sarah Hyland - who was with boyfriend Matt Prokop - and beauties, Christa B. Allen and Brittany Snow.

The cult snapper posed happily with Eastwood's beautiful daughter and Roberts at the wonderfully surreal event.

Two for the price of one: The Hermes bag is one of the most sort after accessories in the world

Two for the price of one: The Hermes bag is one of the most sought after accessories in the world

Roberts, 21, looked stunning in a black Dolce & Gabbana dress with matching bag with Christian Louboutin shoes.

And the niece of superstar Julia Roberts seemed to enjoy the event, mingling with the giant rabbits and panda wandering around the studio playing chess.

Roberts and Eastwood have often teamed up for a series of stylish photoshoots with Shields.

In love: Shields recently opened his Mouthful exhibit in support of Love is Louder in Los Angeles with Francesca at his side

In love: Shields‘ recently opened his Mouthful exhibit in support of Love is Louder in Los Angeles with Francesca at his side

The photographer is famous for his provocative snaps of stars like Demi Lovato, Lindsay Lohan and Mischa Barton.

At the event, guests were greeted by human pandas and rabbits donning black A|X suits and 'viewed the out-of-the-box photography before signing special edition A|X Armani Exchange tee shirts in support of Love is Louder and Tyler Shields.

The tees will be auctioned off, with all proceeds going towards the foundation, created to support anti-bullying efforts.

Famous friends: Emma Roberts was also in attendance at the event

Famous friends: Emma Roberts was also in attendance at the event

According to the press release: 'The fashion-forward crowd received a sneak-peak of the one-day-only gallery exhibition which fuses photography, video, and art installation.

Shattering all the rules, Shields leads the way at the helm of an entirely new breed of art.'

Shields also stars in his girlfriend's new reality show Eastwood & Company, which airs tomorrow night on E!.

Here's what other readers have said. Why not add your thoughts, or debate this issue live on our message boards.

The comments below have been moderated in advance.

DM...you idiots. The bag is $10,000 not $100,000. Get your reporting facts straight. Either way, I would never spend that much on a bag and I'm sure this idiot guy didn't either...he probably bought a replica from Chinatown for $50.

Oh grow up!

he takes terrible photographs. If you're going to burn a 100,000 bag you could at least set up the shot properly

There are a lot of rich idiots around then.

"The cage opens wide, and the fools rush inside". Sad and pathetic that anyone would pay $100K for a handbag.....utterly foolish.

Hey...I have an idea. Instead of destroying those over-priced bags and shoes, how about auctioning them off and giving the proceeds to someone less fortunate? Makes sense and makes a statement that the price of vanity(and stupidity) could feed, clothe and otherwise improve someone's life. No purse or shoe is worth those ridiculous prices, even if the were crafted by magical fairies from materials spun from gold.

This show has only been on 2 weeks and Francesca already comes off as a Kardashian-worthy ditz.

I feel so sorry for Clint Eastwood, a fairly rare somewhat intelligent person. This is the trouble with having teenage daughters in this day and age, especially if you as a parent made some money. Your child usually turns out a braindead bimbo, very much the kind of person you would completely be disgusted by.

literally burning $100,000.... why do celebrities let their children get this way?

Meanwhile a student in Texas got thrown in jail and fined for working 2 jobs trying to support her family and we have people on the other side burning $100,000 because they were that bored. That's sad. With that kind of money burned they could have sent it to Diane Tran who is going through a very hard time right now. *sigh* But then again this is the same moron that made Tamara Ecclestone roll around in one million British pounds so this does not surprise me at all. It's not art it's vulgar.

The views expressed in the contents above are those of our users and do not necessarily reflect the views of MailOnline.



China's 'Hollywood' shines in business - China Daily


Sprinkling of stardust pulls in the tourists, making service sector grow

Entertainment celebrities attract not only huge crowds of fans but bring about opportunities for the development of the service sector. This has been perfectly demonstrated by Hengdian, a town in East China's Zhejiang province.

Many Chinese people know of the Hengdian World Studios. However, its parent, Hengdian Group, was originally established as an industrial enterprise and its business mainly deals with industries including electronics, pharmaceuticals and chemicals.

Launched in 1996, Hengdian World Studios was founded by Xu Wenrong, a primary school dropout who became a legendary entrepreneur and the owner of Hengdian Group.

The company formed a relationship with the film and TV industry by chance when director Xie Jin called for the building of shooting sets for the film The Opium War in 1996. With Xu's approval and support, Hengdian Group created a 19th-century Guangzhou street scene covering 319 mu (21.3 hectares) in just more than four months, which has developed into the world's largest film studio.

Hengdian Group invested more than 7 billion yuan ($111 million) in the construction of the set. It boasts 28 large-scale scenic spots and 11 indoor studios. The outdoor scenic spots include buildings featuring the architecture of the Ming and Qing dynasties (1368-1911), an imitation of the Palace of the Qin Dynasty (221-206 BC), a Guangzhou street scene, a Hong Kong street scene and a riverside scene featuring Tomb Sweeping Day (Ching Ming Festival).

A move that distinguished Hengdian World Studios from other studios in the country came in 2000, when Hengdian World Studios Co, the operator of the studios, made it free to shoot outdoor scenes there. This attracted a significantly growing number of cast and crew to China's "Hollywood".

Over the past eight years, a total of more than 900 crew have visited Hengdian studios to make movies and TV dramas, including some from foreign countries. The number of extras recommended to crew through the extras union under the company's control exceeded 4 million in recent years, according to the Hengdian Chinese Film Industrial Park, a national organization founded in 2004 to promote the development of the film and TV drama industries.

The teams that visit Hengdian for the variety of shooting locations created a huge demand for the service sector in the town, boosting its growth. The tertiary industry in the town of Hengdian generated more than 6 billion yuan in revenues last year, accounting for one third of the town's gross domestic product. The job opportunities created in the service sector exceeded 36,000, said Zhu Guoqiang, deputy director of the administration committee at Hengdian Chinese Film Industrial Park.

Tourism, catering and hotel services, costume-making and rental for film equipment and props constitute the majority of the service sector in the town.

What these industries share in common is that they are all driven by the TV and movie business in Hengdian.

"Initially tourists visited Hengdian studios primarily out of curiosity about how TV plays or films are made. Now they choose to come here because we offer performances," said Zeng Yulin, spokesman for Hengdian World Studios Co.

The live performances at the studios acted as the development engine of its tourism industry. For example, a show that demonstrates the beauty and power of tai chi was introduced in 2007 and has blossomed into a must-watch experience for tourists. The improvement was guided by Chen Weiya, the deputy chief director of the opening and closing ceremonies of the Beijing Olympics in 2008.

By the end of March 2011, the show had been performed more than 1,800 times, entertaining 4 million people. Statistics from the industrial park showed ticket sales of the show generated more than 100 million yuan in 2010, and additional purchases driven by it amounted to several hundred million yuan.

There are 14 featured shows scattered at different scenic locations around the studios. They derive from the characteristics of the location or are inspired by the films or TV dramas shot there.

"All the shows at Hengdian studios are performed for limited periods. We are continuously creating something new," Zeng said.

That's why every time a tourist comes to Hengdian, he or she will have a different experience, he added.

In order to promote its travel business, Hengdian World Studios Co established its own marketing company for tourism in 2003. So far 46 branches that focus on marketing have entered a large number of cities nationwide.

These branches build partnerships with local travel agencies and provide them with the latest tourism policy and products in Hengdian to increase the number of visitors.

Advertising on buses is another way to reach potential clients. From 2004 to 2009, the studios invested more than 50 million yuan in commercial advertisements on 1,000 buses in cities including Shanghai, Nanjing, and Fuzhou.

The number of tourists over the past few years witnessed an almost continuous rise. They climbed from 4.78 million in 2007 to 8.41 million in 2010 with a decline to 5.84 million in 2009 because of the global financial crisis that year. As many as 10.8 million tourists at home and abroad visited the studios last year, creating a year-on-year growth of 28 percent. The revenue and profit of the company saw a 51 percent and 68 percent growth respectively from a year earlier.

"A small grocer once sold more than 170 boxes of mineral water on May 1," said Zeng of Hengdian World Studios Co. Zeng is also the editor in chief of Hengdian Tourism Magazine.



CBA Analytical Report: Bahamas Financial Services Industry Begs Reform - thebahamasweekly.com

The Bahamas finds itself in some debate over the actions of its securities commission assisting the Canadian province of British Columbia in preventing the violation of its securities provisions, and perhaps other laws. The situation is instructive and should clarify an age old problem which many Bahamians seem not to understand. The securities Commission of the Bahamas should be commended on doing the kind of job it should do more often, if the Bahamas wants to build its economy, international reputation, and develop a Capital Market Driven Economy (CMDE), as advanced by the Council for Concerned Bahamians Abroad (CBA) in several of its previous reports at www.ourbahamas.org .

The Bahamas must base its future on productive legitimate enterprise, and be a cooperative and collaborative player in world financial affairs, rather than a small “Black Hole” outlier whose primary claim to fame in Financial Services is viewed from the outside by powerful international forces as assisting in the violation of the laws of other countries. The Country must avoid acts seen as encouraging and promoting the international movement and disappearance of monies down a virtual “Black Hole” never to be further traced by anti-terrorist, anti-money laundering, and taxing authorities and agencies.

In brief, it has been reported that Gibraltar Global Securities a Bahamian based and apparently owned financial service company has been declared “Unsuitable” to do business in the Province of British Columbia by the Securities Commission of British Columbia (BCSC). The company and its Canadian affiliate “Global Securities” also faces other sanctions and fines in a hearing scheduled for June 12, 2012. The principals of the Bahamian company have publicly complained that it is a sovereignty issue and that the Securities Commission of the Bahamas (SCB) was wrong in providing the BCSC with information it involuntarily retrieved from Gibraltar in a 2010 “surprise” visit to Gibraltar’s offices. The SCB seized documents containing information which the British Columbia government claimed existed, and which Gibraltar had reportedly refused prior requests for discovery, claiming protection from “Fishing Expeditions” not allowed by Bahamian “Financial Secrecy Law”. Also, Gibraltar now claims that the SCB should be investigated in the matter, as its actions will hurt the Bahamian industry, and reverberate internationally among clientele seeking offshore services and protections.

The SCB has admitted to sending the seized documents to the Provincial government thus giving them evidence needed for their subsequent ruling and actions. Generally, this is how a competent securities Commission is expected to operate, and based on current law and regulations, the SCB seems to have been justified considering the prior discovery requests and resultant refusals by Gibraltar. The BCSC in its ruling also offered evidence that Gibraltar and Global had previously proffered formal statements specifically denying their engagement in the activities the retrieved documents later evidenced they were involved in. More on the specifics of the case can be viewed at www.ourbahamas.org .

While the CBA can only opine as to the actual facts as reported in the BCSC ruling and elsewhere, an evaluation based on what has been reported, reveals a situation which is highly instructive. Notably, this is not the first incident the Bahamas Securities Commission has had with Canadian based and affiliated financial service operations. There have been several prominent examples. Due to the lack of a federal securities commission, oversight regulations, and enforcement capabilities, the Canadian securities system which is Provincially based, has come under much scrutiny and criticism. Some observers have gone as far as to state that parties hurt by Canadian related financial services must often depend on transactional connections to the long and powerful arm of the U.S. Securities operations and laws for enforcement solutions. Ironically, this is also one reason the more prudent Financial Services operations in the Bahamas have traditionally and facially steered away from U.S. based transactions whenever they can. The situation in Canada has led to disparate enforcement of securities matters, and internal and international forum shopping by questionable Investment practices and promoters. The Bahamas has unfortunately become a forum shopped by some of these entities due its history as an offshore center with laws touting financial secrecy, and with local actors amenable to lucrative, less enforceable Canadian, as compared to highly scrutinized U.S., based transactions.

The view from outside is extremely important in this area. The Bahamas cannot build and maintain a financial services industry or any industry for that matter, which is viewed from the outside as assisting in the violation of the laws of other countries. This is particularly so when the laws being violated are those of world leading countries, and where our actions may be seen as contravening international norms of financial practice. Simply because we are a sovereign nation with our own laws, does not mean we can do any and everything to make money.

A simple rule that actors within the Bahamian Financial Services industry must remember is that within International Law and Relations, “Might Is Almost Always Right”. This may be a sobering realization for the less well heeled nations, but it is one to take important notice of. While International law and treaties may be interpreted by international bodies with some token representation from smaller nations, such laws are generally established by the larger more powerful forces, and always unilaterally self interpreted and enforced by them in protecting their interests. Unresolved international disputes only exist when two behemoths disagree, but generally when a behemoth confronts a small actor in an international dispute, most knowledgeable observers realize who will ultimately win. Numerous examples of this can be cited but is unnecessary in the context of this report, and may be covered in a follow up report on www.ourbahamas.org .

Large powerful countries and international organizations in attempting to protect their interests will strive to do so, particularly when the moral and ethical situation, and international law is arguably on their side.

The new Minster of Financial Services Ryan Pinder, a highly trained and U.S. experienced Tax and Business Transactional lawyer has his work cut out in reigning in unrealistic actors and expectations in the Bahamas Financial Service community. His appointment breeds hope that financial services can now be focused on bringing foreign income and jobs from legitimate foreign business setup and financial services, rather than from the assistance of “Black Hole” financial services couched in terms like “sovereign protected”, “wealth management”, “high net worth offshore asset protection” et al.

The writing has been on the wall for some time now for any objective observer to see. Large important production based world economies will not allow small non-production related economies like the Bahamas to assist foreign violations and abuse of their laws. The recent BCSC ruling, FATCA, OECD, The Patriot Act, and several others now in the pipeline are clear examples that the problem for countries like The Bahamas is not going away.

Both Prime Ministers Ingraham and Christie recognized the problem, and Ingraham though criticized for giving in to the OECD during his first terms in office should be applauded for doing what was morally and ethically right, even if he may have been forced to do so. It is important to note that Christie in his first term did not try to repeal Ingraham’s decision, apparently recognizing the futility of attempting to do so in face of the clear writings upon the international wall of financial compliance. In addition, he appears to have an obvious inclination and predisposition to make the Bahamas a more important and respected player on the world stage. Members of the Bahamas Financial Services Community who do not follow the views espoused in this CBA report, should not be surprised, or expect Prime Minister Christie to take any steps which will put the international reputation of the Bahamas at risk.



Dell Reports First Quarter Financial Results - Yahoo Finance

ROUND ROCK, Texas--(BUSINESS WIRE)--

Dell announced its fiscal 2013 first quarter results today, continuing to show progress in its move to being a total enterprise services and solutions provider. Revenue for the quarter was $14.4 billion, with GAAP operating income of $824 million, and earnings of $0.36 per share.

“We’re committed to continuing our strategy to re-shape Dell’s business as an end-to-end IT provider,” said Michael Dell, chairman and CEO. “We saw continued progress in our first quarter with the innovative IT solutions we’re providing – notably our latest Dell servers, storage, networking and services that deliver customers enhanced productivity.”

“We continued to shift the mix of our business during a challenging environment,” said Brian Gladden, Dell chief financial officer. “Our enterprise solutions and services businesses now account for 50 percent of our gross margin, and we’ll continue to make the necessary investments to maintain our progress.”

Results

  • Revenue in the quarter was $14.4 billion, a 4 percent decrease from the previous year.
  • GAAP earnings per share in the quarter was 36 cents, down 27 percent from the previous year; non-GAAP EPS was 43 cents, down 22 percent.
  • GAAP operating income for the quarter was $824 million, or 5.7 percent of revenue. Non-GAAP operating income was $1 billion, or 7 percent of revenue.
  • Cash used in operations in the quarter was $138 million. For the past four quarters, Dell has generated $4.9 billion in cash flow. Dell ended the quarter with $17.2 billion in cash and investments.

Fiscal-Year 2013 First Quarter Highlights

      First Quarter
(in millions) FY13       FY12       Change
Revenue $   14,422       $   15,017       (4 )%
 
Operating Income (GAAP) $ 824 $ 1,212 (32 )%
Net Income (GAAP) $ 635 $ 945 (33 )%
EPS (GAAP) $ 0.36 $ 0.49 (27 )%
 
Operating Income (non-GAAP) $ 1,010 $ 1,376 (27 )%
Net Income (non-GAAP) $ 761 $ 1,050 (28 )%
EPS (non-GAAP) $ 0.43 $ 0.55 (22 )%

Information about Dell’s use of non-GAAP financial information is provided under “Non-GAAP Financial Measures” below. Non-GAAP financial information excludes costs related primarily to the amortization of purchased intangibles, severance and facility-action costs, and acquisition-related charges. All comparisons in this press release are year over year unless otherwise noted.

Strategic Highlights:

  • Dell Enterprise Solutions and Services revenue grew 2 percent year over year to $4.5 billion and contributed half of Dell’s gross margin. The ESS revenue grew 5 percent excluding third-party storage.
  • Dell Services revenue was $2.1 billion, up 4 percent. Services backlog increased 9 percent to $15.4 billion.
  • Dell-owned storage grew 24 percent to $423 million.
  • Server and networking revenue grew 2 percent.

Business Units and Regions:

  • Large Enterprise revenue was $4.4 billion in the quarter, a 3 percent decline. Operating income for the quarter was $402 million, or 9.1 percent of revenue.
  • Public revenue was $3.5 billion, a 4 percent decrease. Operating income for the quarter was $271 million, or 7.8 percent of revenue.
  • Small and Medium Business revenue grew 4 percent to $3.5 billion. Enterprise Solutions and Services revenue increased 17 percent, led by services revenue growth of 23 percent and servers and networking of 16 percent. SMB had $389 million in operating income, or 11.2 percent of revenue.
  • Consumer revenue was $3 billion, a 12 percent decline. Operating income was $32 million or 1.1 percent of revenue.
  • Asia-Pacific and Japan revenue was flat but China increased 9 percent. EMEA revenue was down 1 percent in the quarter. Americas was down 7 percent. Revenue in the BRIC countries increased 4 percent.

Company Outlook:

The company expects second quarter revenue to be in line with historical seasonal trends and be up 2-4 percent from first-quarter levels.

About Dell

Dell Inc. (NASDAQ:DELL - News) listens to customers and delivers worldwide innovative technology, business solutions and services they trust and value. For more information, visit www.dell.com. As previously announced, the first-quarter analyst call with Michael Dell, chairman and CEO; Brian Gladden, CFO; and, Steve Felice, Chief Commercial Officer, will be webcast live today at 4:00 CDT and archived at www.dell.com/investor. To monitor highlighted facts from the analyst call, follow on the Dell Investor Relations Twitter account at: http://twitter.com/dellshares or hashtag #DellEarnings. To communicate directly with Dell, go to www.dell.com/dellshares.

Segment Realignment:

In the first quarter of Fiscal 2013, Dell made certain segment realignments in order to conform to the way Dell internally manages segment performance. These realignments affected all of Dell's operating segments, but primarily consisted of the transfer of small office business customers from the Small and Medium Business segment to the Consumer Segment. Dell has recast prior period amounts to provide visibility and comparability. None of these changes impacts Dell's previously reported consolidated net revenue, gross margin, operating income, net income, or earnings per share.

Non-GAAP Financial Measures:

This press release includes information about non-GAAP operating income, non-GAAP net income, and non-GAAP earnings per share (collectively with non-GAAP gross margin and non-GAAP operating expenses, the “non-GAAP financial measures”), which are not measurements of financial performance prepared in accordance with U.S. generally accepted accounting principles. In the following tables, Dell has provided a reconciliation of each historical non-GAAP financial measure to the most directly comparable GAAP financial measure under the heading “Reconciliation of Non-GAAP Financial Measures” and has presented a detailed discussion of its reasons for including the non-GAAP financial measures and the limitations associated with those measures under the heading “Use of Non-GAAP Financial Measures.” Dell encourages investors to review the reconciliation and the non-GAAP discussion in conjunction with Dell’s presentation of these non-GAAP financial measures.

Special Note on Forward Looking Statements:

Statements in this press release that relate to future results and events (including statements about Dell’s future financial and operating performance, trends relating to mix shift, macroeconomic uncertainty, organic and inorganic investments and success relating to strategic transformation, as well as the financial guidance with respect to cash flow from operations, net income and non-GAAP earnings per share) are forward-looking statements and are based on Dell's current expectations. In some cases, you can identify these statements by such forward-looking words as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “confidence,” “may,” “plan,” “potential,” “should,” “will” and “would,” or similar expressions. Actual results and events in future periods may differ materially from those expressed or implied by these forward-looking statements because of a number of risks, uncertainties and other factors, including: intense competition; Dell’s reliance on third-party suppliers for product components, including reliance on several single-sourced or limited-sourced suppliers; Dell’s ability to achieve favorable pricing from its vendors; weak global economic conditions and instability in financial markets; Dell’s ability to manage effectively the change involved in implementing strategic initiatives; successful implementation of Dell’s acquisition strategy; Dell’s cost-efficiency measures; Dell’s ability to effectively manage periodic product and services transitions; Dell’s ability to deliver consistent quality products and services; Dell’s ability to generate substantial non-U.S. net revenue; Dell’s product, customer, and geographic sales mix, and seasonal sales trends; the performance of Dell’s sales channel partners; access to the capital markets by Dell or its customers; weak economic conditions and additional regulation affecting our financial services activities; counterparty default; customer terminations of or pricing changes in services contracts, or Dell’s failure to perform as it anticipates at the time it enters into services contracts; loss of government contracts; Dell’s ability to obtain licenses to intellectual property developed by others on commercially reasonable and competitive terms; infrastructure disruptions; cyber attacks or other data security breaches; Dell’s ability to hedge effectively its exposure to fluctuations in foreign currency exchange rates and interest rates; expiration of tax holidays or favorable tax rate structures, or unfavorable outcomes in tax audits and other compliance matters; impairment of portfolio investments; unfavorable results of legal proceedings; Dell’s ability to attract, retain, and motivate key personnel; Dell’s ability to maintain strong internal controls; changing environmental and safety laws; the effect of armed hostilities, terrorism, natural disasters, and public health issues; and other risks and uncertainties discussed in Dell’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for its fiscal year ended February 3, 2012. In particular, Dell’s expectations with regard to cash flow from operations, net income and non-GAAP earnings per share for the full fiscal year ending Feb. 1, 2013 assume, among other matters, that there is no significant decline in economic conditions generally or demand growth specifically, that macroeconomic uncertainties do not materialize into significant economic difficulties, no significant change in product mix patterns, and continued geographic customer demand trends. In particular, Dell’s expectations with regard to second quarter revenue amounts assume, among other matters, that there is no significant decline in economic conditions generally or demand growth specifically, that macroeconomic uncertainties do not materialize into significant economic difficulties, no significant change in product mix patterns, and continued geographic customer demand trends. Dell assumes no obligation to update its forward-looking statements.

Consolidated statements of income, financial position and cash flows and other financial data follow.

Dell is a trademark of Dell Inc. Dell disclaims any proprietary interest in the marks and names of others.

               
 
DELL INC.
Condensed Consolidated Statement of Income and Related Financial Highlights
(in millions, except per share data and percentages)
(unaudited)
 
Three Months Ended % Growth Rates
May 4, February 3, April 29,
  2012     2012     2011   Sequential Yr. to Yr.
 
Net revenue
Products $ 11,423 $ 12,925 $ 12,059 (12 %) (5 %)
Services, including software related   2,999     3,106     2,958   (3 %) 1 %
  14,422     16,031     15,017   (10 %) (4 %)
 
Cost of net revenue
Products 9,330 10,521 9,436 (11 %) (1 %)
Services, including software related   2,025     2,125     2,149   (5 %) (6 %)
Total cost of net revenue   11,355     12,646     11,585   (10 %) (2 %)
 
Gross margin 3,067 3,385 3,432 (9 %) (11 %)
 
Operating expenses
Selling, general and administrative 2,009 2,218 2,025 (9 %) (1 %)
Research, development and engineering   234     236     195   (1 %) 20 %
Total operating expenses   2,243     2,454     2,220   (9 %) 1 %
 
Operating income 824 931 1,212 (11 %) (32 %)
 
Interest and other, net   (32 )   (24 )   (42 ) (32 %) 25 %
Income before income taxes 792 907 1,170 (13 %) (32 %)
Income tax provision   157     143     225   9 % (30 %)
Net income $ 635   $ 764   $ 945   (17 %) (33 %)
 
Earnings per share:
Basic $ 0.36   $ 0.43   $ 0.50   (16 %) (28 %)
Diluted $ 0.36   $ 0.43   $ 0.49   (16 %) (27 %)
 
Weighted average shares outstanding:
Basic 1,759 1,778 1,908 (1 %) (8 %)
Diluted 1,774 1,796 1,923 (1 %) (8 %)
 
Gross margin 21.3 % 21.1 % 22.9 %
Selling, general and administrative 13.9 % 13.8 % 13.5 %
Research and development 1.7 % 1.5 % 1.3 %
Operating expenses 15.6 % 15.3 % 14.8 %
Operating income 5.7 % 5.8 % 8.1 %
Income before income taxes 5.5 % 5.7 % 7.8 %
Net income 4.4 % 4.8 % 6.3 %
Income tax rate 19.8 % 15.8 % 19.2 %
 
Servers and Networking $ 2,017 $ 2,220 $ 1,973 (9 %) 2 %
Storage 444 500 481 (11 %) (8 %)
Services 2,071 2,179 1,984 (5 %) 4 %
Software and Peripherals 2,386 2,558 2,567 (7 %) (7 %)
Mobility 4,236 4,877 4,716 (13 %) (10 %)
Desktop PCs   3,268     3,697     3,296   (12 %) (1 %)
Consolidated net revenue $ 14,422   $ 16,031   $ 15,017   (10 %) (4 %)
 
Servers and Networking 14 % 14 % 13 %
Storage 3 % 3 % 3 %
Services 14 % 14 % 13 %
Software and Peripherals 17 % 16 % 17 %
Mobility 29 % 30 % 32 %
Desktop PCs 23 % 23 % 22 %
 
Large Enterprise $ 4,436 $ 4,982 $ 4,587 (11 %) (3 %)
Public 3,466 3,833 3,621 (10 %) (4 %)
Small and Medium Business 3,477 3,560 3,355 (2 %) 4 %
Consumer   3,043     3,656     3,454   (17 %) (12 %)
Consolidated net revenue $ 14,422   $ 16,031   $ 15,017   (10 %) (4 %)
 
Large Enterprise 31 % 31 % 31 %
Public 24 % 24 % 24 %
Small and Medium Business 24 % 22 % 22 %
Consumer 21 % 23 % 23 %
 
Large Enterprise $ 402 $ 467 $ 516
Public 271 312 352
Small and Medium Business 389 399 435
Consumer   32     61     170  
Segment operating income 1,094 1,239 1,473
Broad based long-term incentives (84 ) (96 ) (97 )
Amortization of intangible assets (110 ) (104 ) (92 )
Severance and facility actions and acquisition-related   (76 )   (108 )   (72 )
Consolidated operating income $ 824   $ 931   $ 1,212  
 
 
Note: Percentage growth rates and ratios are calculated based on underlying data in thousands.
 

(1) Segment Results for Fiscal 2012 have been recast to conform to segment realignments that were completed during the first quarter of Fiscal 2013. See Supplemental Segment Information at the end of these financial tables for more information.

       
 
DELL INC.
Condensed Consolidated Statement of Financial Position and Related Financial Highlights
(in millions, except for "Ratios")
(unaudited)
 
May 4, February 3, April 29,
  2012     2012     2011  
Current assets:
Cash and cash equivalents $ 12,814 $ 13,852 $ 14,061
Short-term investments 901 966 418
Accounts receivable, net 6,289 6,476 6,196
Short-term financing receivables, net 3,200 3,327 3,205
Inventories, net 1,472 1,404 1,276
Other current assets   3,369     3,423     3,217  
Total current assets 28,045 29,448 28,373
Property, plant and equipment, net 2,119 2,124 1,987
Long-term investments 3,501 3,404 762
Long-term financing receivables, net 1,342 1,372 1,123
Goodwill 6,005 5,838 5,406
Purchased intangible assets, net 1,801 1,857 1,941
Other non-current assets   476     490     196  
Total assets $ 43,289   $ 44,533   $ 39,788  
 
Current liabilities:
Short-term debt $ 3,186 $ 2,867 $ 816
Accounts payable 10,970 11,656 10,442
Accrued and other 3,076 3,934 3,590
Short-term deferred services revenue   3,582     3,544     3,282  
Total current liabilities 20,814 22,001 18,130
Long-term debt 5,813 6,387 6,794
Long-term deferred services revenue 3,837 3,836 3,608
Other non-current liabilities   3,468     3,392     2,886  
Total liabilities 33,932 35,616 31,418
Total stockholders' equity   9,357     8,917     8,370  
Total liabilities and equity $ 43,289   $ 44,533   $ 39,788  
 
 
Days of sales outstanding (1) 43 42 40
Days supply in inventory 12 11 10
Days in accounts payable   (87 )   (89 )   (81 )
Cash conversion cycle   (32 )   (36 )   (31 )
 
Average total revenue/unit (approximate) $ 1,360 $ 1,330 $ 1,380
 
Note: Ratios are calculated based on underlying data in thousands.
 

(1) Days of sales outstanding (“DSO”) is based on the ending net trade receivables and most recent quarterly revenue for each period. DSO includes the effect of product costs related to customer shipments not yet recognized as revenue that are classified in other current assets. At May 4, 2012, February 3, 2012, and April 29, 2011, DSO and days of customer shipments not yet recognized were 39 and 4 days, 39 and 3 days, 37 and 3 days, respectively.

         
 
DELL INC.
Condensed Consolidated Statements of Cash Flows
(in millions, unaudited)
 
Three Months Ended
May 4, April 29,
  2012     2011  
Cash flows from operating activities:
Net income $ 635 $ 945
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 248 216
Stock-based compensation 95 99
Effects of exchange rate changes on monetary assets and
liabilities denominated in foreign currencies (10 ) -
Deferred Income Taxes 47 (63 )
Provision for doubtful accounts - including financing receivables 63 47
Other (5 ) (5 )
Changes in assets and liabilities, net of effects from acquisitions:
Accounts receivable 161 471
Financing receivables 71 21
Inventories (68 ) 38
Other assets 48 110
Accounts payable (671 ) (925 )
Deferred services revenue 33 191
Accrued and other liabilities   (785 )   (680 )
Change in cash from operating activities   (138 )   465  
 
Cash flows from investing activities:
Investments:
Purchases (673 ) (240 )
Maturities and sales 640 222
Capital expenditures (142 ) (137 )
Proceeds from sale of facility and land - 12
Collections on purchased financing receivables 55 67
  (245 )   (1,473 )
  (365 )   (1,549 )
 
Cash flows from financing activities:
Repurchase of common stock (324 ) (450 )
Issuance of common stock under employee plans 38 10
13 -
Proceeds from debt 596 1,930
(863 ) (323 )
Other   8     3  
  (532 )   1,170  
 
 
  (3 )   62  
 
(1,038 ) 148
 
  13,852     13,913  
$ 12,814   $ 14,061  
 
SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES
 
The tables on the following pages set forth, for the periods indicated, a reconciliation of non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP net income, and non-GAAP earnings per share (collectively, the “non-GAAP financial measures”) to the most comparable GAAP financial measures. These non-GAAP financial measures may not be directly comparable to similarly titled measures reported by other companies. See “Use of Non-GAAP Financial Measures” following the tables for additional information regarding Dell’s reasons for including the non-GAAP financial measures and for material limitations with respect to the usefulness of these measures.
               
 
DELL INC.
Reconciliation of Non-GAAP Financial Measures
(in millions, except per share data and percentages)
(unaudited)
 
Three Months Ended % Growth Rates
May 4, February 3, April 29,
  2012     2012     2011   Sequential Yr. to Yr.
 
 
GAAP gross margin $ 3,067 $ 3,385 $ 3,432 (9 %) (11 %)
 
Non-GAAP adjustments:
Amortization of intangibles 88 83 71
Severance and facility actions and acquisition-related   12     15     8  
Non-GAAP gross margin $ 3,167   $ 3,483   $ 3,511   (9 %) (10 %)
 
 
GAAP operating expenses $ 2,243 $ 2,454 $ 2,220 (9 %) 1 %
 
Non-GAAP adjustments:
Amortization of intangibles (22 ) (21 ) (21 )
Severance and facility actions and acquisition-related   (64 )   (93 )   (64 )
Non-GAAP operating expenses $ 2,157   $ 2,340   $ 2,135   (8 %) 1 %
 
 
GAAP operating income $ 824 $ 931 $ 1,212 (11 %) (32 %)
 
Non-GAAP adjustments:
Amortization of intangibles 110 104 92
Severance and facility actions and acquisition-related   76     108     72  
Non-GAAP operating income $ 1,010   $ 1,143   $ 1,376   (12 %) (27 %)
 
 
GAAP net income $ 635 $ 764 $ 945 (17 %) (33 %)
 
Non-GAAP adjustments:
Amortization of intangibles 110 104 92
Severance and facility actions and acquisition-related 76 108 72
Aggregate adjustment for income taxes   (60 )   (63 )   (59 )
Non-GAAP net income $ 761   $ 913   $ 1,050   (17 %) (28 %)
 
 
GAAP earnings per share - diluted $ 0.36 $ 0.43 $ 0.49 (16 %) (27 %)
Non-GAAP adjustments per share - diluted   0.07     0.08     0.06  
Non-GAAP earnings per share - diluted $ 0.43   $ 0.51   $ 0.55   (16 %) (22 %)
 
 
Diluted WAS 1,774 1,796 1,923
 
 
 
GAAP gross margin 21.3 % 21.1 % 22.9 %
Non-GAAP adjustment   0.7 %   0.6 %   0.5 %
Non-GAAP gross margin   22.0 %   21.7 %   23.4 %
 
GAAP operating expenses 15.6 % 15.3 % 14.8 %
Non-GAAP adjustment   (0.6 %)   (0.7 %)   (0.6 %)
Non-GAAP operating expenses   15.0 %   14.6 %   14.2 %
 
GAAP operating income 5.7 % 5.8 % 8.1 %
Non-GAAP adjustment   1.3 %   1.3 %   1.1 %
Non-GAAP operating income   7.0 %   7.1 %   9.2 %
 
GAAP net income 4.4 % 4.8 % 6.3 %
Non-GAAP adjustment   0.9 %   0.9 %   0.7 %
Non-GAAP net income   5.3 %   5.7 %   7.0 %
 
Note: Percentage growth rates and ratios are calculated based on underlying data in thousands.
USE OF NON-GAAP FINANCIAL MEASURES
 
Dell uses non-GAAP financial measures to supplement the financial information presented on a GAAP basis. Dell believes that excluding certain items from Dell’s GAAP results allows Dell’s management to better understand Dell’s consolidated financial performance from period to period and in relationship to the operating results of Dell’s segments, as management does not believe that the excluded items are reflective of Dell's underlying operating performance. Dell also believes that excluding certain items from Dell’s GAAP results allows Dell’s management to better project Dell’s future consolidated financial performance because Dell’s forecasts are developed at a level of detail different from that used to prepare GAAP-based financial measures. Moreover, Dell believes these non-GAAP financial measures will provide investors with useful information to help them evaluate Dell's operating results by facilitating an enhanced understanding of Dell's operating performance, and enabling them to make more meaningful period to period comparisons. Non-GAAP projections for Fiscal 2013, which are forward looking non-GAAP financial measures, exclude acquisition-related charges, severance and facility action costs, and amortization of purchased intangible assets related to acquisitions, some of which Dell cannot forecast with certainty or accuracy due to their inherently indefinite and contingent nature, thereby preventing Dell from reconciling its projections to GAAP. The historical non-GAAP financial measures, as defined by Dell, represent the comparable GAAP measures adjusted to exclude these same items. Dell provides more detail below regarding each of these items and our reasons for excluding them. In future fiscal periods, Dell expects that it may again exclude such items and may incur income and expenses similar to these excluded items. Accordingly, the exclusion of these items and other similar items in Dell’s non-GAAP presentation should not be interpreted as implying that these items are non-recurring, infrequent, or unusual.
 
The non-GAAP financial measures for the periods indicated in the tables above reflect adjustments related to the following items:
 
Severance and Facility Actions and Acquisition-related Costs - Severance and facility action costs are primarily related to facilities charges including accelerated depreciation and severance and benefits for employees terminated pursuant to cost synergies related to strategic acquisitions and actions taken as part of a comprehensive review of costs. Acquisition-related charges are expensed as incurred and consist primarily of retention payments, integration costs, and other costs. Retention payments include stock-based compensation and cash incentives awarded to employees, which are recognized over the vesting period. Integration costs primarily include IT costs related to the integration of IT systems and processes, costs related to the integration of employees, costs related to full-time employees who are working on the integration, and consulting expenses. Severance and facility actions and acquisition-related charges are inconsistent in amount and are significantly impacted by the timing and nature of these events. Therefore, although Dell may incur these types of expenses in the future, Dell believes eliminating these charges for purposes of calculating the non-GAAP financial measures facilitates a more meaningful evaluation of Dell’s current operating performance and comparisons to Dell’s past operating performance.
 
Amortization of Intangible Assets - Amortization of purchased intangible assets consists primarily of amortization of customer relationships, acquired technology, non-compete covenants, and trade names purchased in connection with business acquisitions. Dell incurs charges relating to the amortization of these intangibles, and those charges are included in Dell’s consolidated financial statements. Amortization charges for Dell’s purchased intangible assets are inconsistent in amount and are significantly impacted by the timing and magnitude of Dell’s acquisitions. Consequently, Dell excludes these charges for purposes of calculating the non-GAAP financial measures to facilitate a more meaningful evaluation of Dell’s current operating performance and comparisons to Dell’s past operating performance.
 
• The aggregate adjustment for income taxes is the estimated combined income tax effect for the adjustments mentioned above. The tax effects are determined based on the tax jurisdictions where the above items were incurred.
 
There are limitations to the use of non-GAAP financial measures. Dell's non-GAAP financial measures may not be comparable to similarly titled measures of other companies. Other companies, including companies in Dell’s industry, may calculate the non-GAAP financial measures differently than Dell does, limiting the usefulness of those measures for comparative purposes. In addition, items such as amortization of purchased intangible assets represent the loss in value of intangible assets over time. The expense associated with this loss in value is not included in the non-GAAP financial measures and such measures, therefore, do not reflect the full economic effect of such loss. Further, items such as severance and facility action costs and acquisition expenses that are excluded from the non-GAAP financial measures can have a material impact on earnings. Dell’s management compensates for the foregoing limitations by relying on Dell’s GAAP results and using non-GAAP financial measures supplementally or for projections when comparable GAAP measures are not available. The non-GAAP financial measures are not meant to be considered as indicators of performance in isolation from or as substitutes for gross margin, operating expenses, operating income, net income, and earnings per share prepared in accordance with GAAP and should be read only in conjunction with financial information presented on a GAAP basis. Dell provides detailed reconciliations of each historical non-GAAP financial measure to its most directly comparable GAAP measure within the financial information included with this press release and in other written materials that include such non-GAAP historical financial measures, and Dell encourages investors to review the reconciliations in conjunction with the presentation of any historical non-GAAP financial measures.
                                   
 
Dell Inc
Supplemental Segment Information
(in millions, unaudited)
 
Three Months Ended Fiscal Year Ended
April 30, 2010 July 30, 2010 October 29, 2010 January 28, 2011 January 28, 2011
As Reported Recast Variance As Reported Recast Variance As Reported Recast Variance As Reported Recast Variance As Reported Recast Variance
Large Enterprise $ 4,246 $ 4,341 $ 95 $ 4,549 $ 4,618 $ 69 $ 4,326 $ 4,389 $ 63 $ 4,692 $ 4,763 $ 71 $ 17,813 $ 18,111 $ 298
Public 3,856 3,708 (148 ) 4,580 4,467 (113 ) 4,442 4,340 (102 ) 3,973 3,862 (111 ) 16,851 16,377 (474 )
Small and Medium Business 3,524 3,096 (428 ) 3,535 3,083 (452 ) 3,665 3,179 (486 ) 3,749 3,250 (499 ) 14,473 12,608 (1,865 )
Consumer   3,248     3,729     481     2,870     3,366     496     2,961     3,486     525     3,278     3,817     539     12,357     14,398     2,041  
Consolidated net revenue $ 14,874   $ 14,874   $ -   $ 15,534   $ 15,534   $ -   $ 15,394   $ 15,394   $ -   $ 15,692   $ 15,692   $ -   $ 61,494   $ 61,494   $ -  
 
Large Enterprise 28 % 29 % 1 % 29 % 30 % 1 % 28 % 28 % 0 % 30 % 30 % 0 % 29 % 29 % 0 %
Public 26 % 25 % -1 % 30 % 29 % -1 % 29 % 28 % -1 % 25 % 25 % 0 % 27 % 27 % 0 %
Small and Medium Business 24 % 21 % -3 % 23 % 20 % -3 % 24 % 21 % -3 % 24 % 21 % -3 % 24 % 21 % -3 %
Consumer 22 % 25 % 3 % 18 % 21 % 3 % 19 % 23 % 4 % 21 % 24 % 3 % 20 % 23 % 3 %
 
Large Enterprise $ 283 $ 293 $ 10 $ 288 $ 289 $ 1 $ 400 $ 398 $ (2 ) $ 502 $ 510 $ 8 $ 1,473 $ 1,490 $ 17
Public 298 280 (18 ) 369 363 (6 ) 451 450 (1 ) 366 353 (13 ) 1,484 1,446 (38 )
Small and Medium Business 313 301 (12 ) 323 298 (25 ) 391 365 (26 ) 450 419 (31 ) 1,477 1,383 (94 )
Consumer   17     37     20     (21 )   9     30     -     29     29     69     105     36     65     180     115  
Segment operating income $ 911   $ 911   $ -   $ 959   $ 959   $ -   $ 1,242   $ 1,242   $ -   $ 1,387   $ 1,387   $ -   $ 4,499   $ 4,499   $ -  
 
 
Three Months Ended Fiscal Year Ended
April 29, 2011 July 29, 2011 October 28, 2011 February 3, 2012 February 3, 2012
As Reported Recast Variance As Reported Recast Variance As Reported Recast Variance As Reported Recast Variance As Reported Recast Variance
Large Enterprise $ 4,477 $ 4,587 $ 110 $ 4,584 $ 4,677 $ 93 $ 4,487 $ 4,540 $ 53 $ 4,909 $ 4,982 $ 73 $ 18,457 $ 18,786 $ 329
Public 3,767 3,621 (146 ) 4,457 4,329 (128 ) 4,375 4,287 (88 ) 3,949 3,833 (116 ) 16,548 16,070 (478 )
Small and Medium Business 3,768 3,355 (413 ) 3,709 3,306 (403 ) 3,712 3,326 (386 ) 3,977 3,560 (417 ) 15,166 13,547 (1,619 )
Consumer   3,005     3,454     449     2,908     3,346     438     2,791     3,212     421     3,196     3,656     460     11,900     13,668     1,768  
Consolidated net revenue $ 15,017   $ 15,017   $ -   $ 15,658   $ 15,658   $ -   $ 15,365   $ 15,365   $ -   $ 16,031   $ 16,031   $ -   $ 62,071   $ 62,071   $ -  
 
Large Enterprise 30 % 31 % 1 % 29 % 30 % 1 % 29 % 29 % 0 % 30 % 31 % 1 % 30 % 30 % 0 %
Public 25 % 24 % -1 % 28 % 28 % 0 % 29 % 28 % -1 % 25 % 24 % -1 % 27 % 26 % -1 %
Small and Medium Business 25 % 22 % -3 % 24 % 21 % -3 % 24 % 22 % -2 % 25 % 22 % -3 % 24 % 22 % -2 %
Consumer 20 % 23 % 3 % 19 % 21 % 2 % 18 % 21 % 3 % 20 % 23 % 3 % 19 % 22 % 3 %
 
Large Enterprise $ 504 $ 516 $ 12 $ 448 $ 460 $ 12 $ 441 $ 446 $ 5 $ 461 $ 467 $ 6 $ 1,854 $ 1,889 $ 35
Public 370 352 (18 ) 484 466 (18 ) 463 454 (9 ) 327 312 (15 ) 1,644 1,584 (60 )
Small and Medium Business 463 435 (28 ) 404 380 (24 ) 386 367 (19 ) 412 399 (13 ) 1,665 1,581 (84 )
Consumer   136     170     34     73     103     30     76     99     23     39     61     22     324     433     109  
Segment operating income $ 1,473   $ 1,473   $ -   $ 1,409   $ 1,409   $ -   $ 1,366   $ 1,366   $ -   $ 1,239   $ 1,239   $ -   $ 5,487   $ 5,487   $ -  
 

(1) In the first quarter of Fiscal 2013, Dell made certain segment realignments in order to conform to the way Dell internally manages segment performance. These realignments affected all of Dell's operating segments, but primarily consisted of the transfer of small office business customers from the Small and Medium Business segment to the Consumer Segment. Dell has recast prior period amounts to provide visibility and comparability. None of these changes impacts Dell's previously reported consolidated net revenue, gross margin, operating income, net income, or earnings per share.



Business Mentors Increases One-Off Registration Fee - Scoop

28th May 2012

Media Release

Business Mentors Increases One-Off Registration Fee To Cope with Loss of Charitable Status

Business Mentors NZ, the nation’s number one not-for-profit mentoring organisation, will increase its one-off $100 registration fee to $150 from 1st June to enable it to cope with the financial implications of its loss of charitable status.

The Charities Commission has deregistered the not for profit organisation on the basis that the key benefactor of the business mentoring service is the individual business owner and that the community gets no measureable benefit.

Business Mentors CEO, Ray Schofield explains: ‘We are committed to keeping the day-to-day running costs of Business Mentors NZ to a minimum. However, the loss of our charitable status combined with increasing demand for our services from small and medium enterprises and the associated costs means that we have to put our registration fee up to cope.

‘The extra income will assist with any administration costs not covered by our private sector patron sponsors and NZTE government funding enabling us to cope with the financial implications of the Charities Commission’s decision. ’

Business failure is a serious problem for New Zealand with devastating consequences for families and communities. The Business Mentoring service is a proven generator of employment and growth, which is vital to our nation’s well being. In particular we help to grow the economy through building performance capability, especially exporting from the SME sector. With over 1800 volunteer mentors Business Mentors New Zealand helps on average 4,300 business clients a year and has assisted over 60,000 businesses since its inception in 1991. In addition we have also supported 127 Not for Profit organisations in the last two years.

The organisation also plays a key community support service in the Canterbury reconstruction through its 330 local volunteer mentors. The critical importance of this activity has been recognised by the Government paying the current $100 client registration fee for Canterbury businesses as well as funding an additional part time administrator in our Christchurch agency.

The Government’s appreciation of the effectiveness of business mentoring is evidenced by its decision to fully fund for six years the delivery of services to 10 Pacific Island nations as part of MFAT/NZAID, programme using NZ Volunteer mentors.

Although Business Mentors New Zealand receives an annual grant from NZTE for its work in New Zealand, the Business Mentoring service could not continue without the support of its 85 private sector business sponsors. Our volunteer mentors give their time freely to their local communities, which in itself is a charitable activity.

The registration fee, which has remained unchanged since October 2007, will entitle business owners to all Business Mentors services for up to two years, including mentoring sessions with an experienced business person and access to a wealth of information and resources.

ends



Open your business with a bang - Sydney Morning Herald
Opening.

Don't start with a whimper - create loyal customers from the get-go.

After waiting 30 minutes for my meal at a new Japanese café last week, the owner belatedly apologised for the delay, confessed they had run out of cooked rice, and asked if I would choose a noodle dish. Sayonara to that, or recommending the café to friends.

Yes, it’s hard to believe a Japanese café could run out of rice. But the owner told me they never expected so many customers within a week of launch. They were badly short-staffed, had only one person cooking meals, and a roomful of patrons wondering if they would ever be fed.

The café made a terrible first impression, precisely when it should have wowed customers. It is far from alone: many small businesses muff their first 90 days and alienate new visitors. Poor word-of-mouth recommendations spread and the mistake becomes fatal.

What’s your view?

  • What makes a good store opening?
  • Have you opened a retail store? What worked upon launch, or didn’t?
  • What were your biggest mistakes in the lead-up to, or after launch?

To be fair, many small businesses struggle at the start because they are undercapitalised out of necessity.

Their owners need cash flow from the venture to survive and build the business, and have to watch every cent. Or they learn on the go as the business grows, or struggle to estimate and plan for customer demand, which can be harder that it looks. Sometimes, they are just unlucky.

At least the Japanese café’s problem was having too many customers. Its excellent store fit-out, menu and value proposition attracted people in the first place, so it clearly has the makings of a good business, provided it understands that first customer impressions are everything.

I’m always surprised when new small businesses start on their worst, rather than best, foot. They have little fanfare in the lead-up or at launch, dull customer offers, and no “zing”. Often the store is poorly stocked and the service is haphazard as teething problems are addressed. Customer goodwill when trying a new store evaporates, and potential repeat visitors are lost within days of launch.

Maybe the weak economy will turn more people off opening small business, even though exciting new ventures in flat markets often stand out and attract much more interest from customers who are tired of the same old shops and cafes, and companies only ever reducing their service. Nevertheless, consider these ideas when starting a small business:

1. There is no such thing as a “soft” launch
Get your systems and processes right before the business opens. Budget to have practice runs. Don’t let paying customers be your guinea pigs while you figure out how the business should work. Don’t let your venture have a “soft launch” mentality or make excuses because you are new. A vibrant, confident new venture gives customers the confidence to return.

2. Find the razzle dazzle
New business should have a sense of excitement, yet so many start with a whimper. They just open and hope people come. Market the business before it opens. One I saw recently had signs telling customers an exciting new business was coming, a band when it opened, and provided cake samples on the footpath. The business was packed. I’ll bet the $1000 in launch marketing was the best money it ever spends.

3. Give, and give some more
An opening-store special offer for customer is a no-brainer. So why do so many new businesses have stingy, unimaginative discounts to excite new customers? And why are so many offers one-offs, when they should be designed to create repeat business, for example, “buy one and the same item is half-price next time you visit” or loyalty cards. Again, it comes down to smart planning, marketing and budgeting.

4. Surprise them
Nothing is more effective than surpassing customers’ expectations on their first visit. Smart businesses do it all the time: a restaurant brings diners a small appetiser, compliments of the chef, or a fashion stores provides a small free accessory when a customer buys a certain amount. It’s a good lesson for new small businesses: think about how you can cost-effectively surprise and delight first-time customers.

5. Pamper them
It’s easy to say, but if a business is ever going to pamper its customers it should be right at the start, when new clients rate the business, decide whether to return, and recommend it to others. Budget to have slightly more staff than you need upon launch, so you give customers surprisingly good service and fast product delivery, and can respond to strong demand. Quickly cut staff hours if the extra service proves unnecessary.

6. Plan, don’t hope, for the best
What happens if your service business is wildly successful? I bet the Japanese café mentioned never asked: what if we are packed on day one? Would we cope? Could we maintain service quality, and surprise and pamper our new customers? And would we have enough cash flow to fund extra food and staff to meet high demand? Do simple scenario planning before launch: what is your base-case scenario for expected customer numbers, and what happens if they are 20 per cent lower or higher?

7. Make a personal connection
The venture’s launch is a great time for the owners to introduce themselves to new customers, ask if they live in the area, thank them for coming, and say they hope to see them again. It is no time for owners to stay behind the scenes and leave all customer interaction to staff. A friendly, passionate owner is the venture’s best advertisement and a great reason for customers to recommend it.

8. How was it for you?
Smart companies are incredibly responsive to customer feedback when they launch. They seek comments, address problems quickly, and adapt. They know one lost customer at the start means one less repeat visitor and potentially dozen of lost customers through word-of-mouth marketing. They also know that new visitors are often willing to provide feedback, to help the business, and that souring their opinion can in itself create a bond with the customer.

9. Make up, don’t break up
All new businesses make mistakes. It’s how you respond that counts. Ensure you have a make-good process, to give customers something extra when there’s a screw-up. Don’t let a happy new customer leave as a cranky one. In my case, the rice-poor Japanese café said sorry, but offered nothing extra.
The whole experience was like a chop stick to the head. Even so, I’ll probably return: you have to give hardworking small business owners a second chance, and I always feel for floor-staff who have to deal with unhappy customers, through no fault of their own. But it takes a lot to build a connection with a small business when the first impression is dismal.

twitterFollow MySmallBusiness on Twitter @MySmallBusiness


No comments: