Presentacin Yoshiaki Nakano

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19/11/2003
Zero-Nana-Hachi Limited.
one of Japanese venture companies
President Yoshiaki Nakano
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(1) Intoroduction
A About us
Zero-Nana-Hachi Limited. - It means 0 7 8 in
Japan. It derives from area code of Kobe city.

• Our Business
• Totally supporting service for Macintosh users.
• Repairing, selling and buying secondhand
  Macintosh, having maintenance, and so on.

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Foundation 13/9/2001 Location Kobe city,
Japan (population of over 1,500,000) Style
small office home office (SOHO) Capital
3,000,000 yen (today 1 Euro yen)
Turnover 36,000,000 yen (2001-2002)
75,000,000 yen (2002-2003)
100,000,000 yen (2003- ) -aim in this
year Employees 5 In surplus, successively for
2 years.
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- Japan -
Population 126,000,000-
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B Method of service

• Using internet
• Especially we utilize Yahoo Auction as
  publicity.
• - Various pieces of Macintosh parts, selling a
  little.

• Advice using email
• Almost we can solve problems.
• - It is free to advise.

We may be sanctuary for Macintosh users.
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operation
forefront
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(2) Why Macintosh?

• A Niche Market
• There are only 5 Macintosh users, but we can
  secure them.
• - We suppose there are over 3 million Macintosh
  users in Japan.

• B Few competitors
• In Japan, there are little service for
  Macintosh.
• - We know existent service is too expensive.

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• C Some professions to need Macintosh
• - Some of them are excellent clients.
• Doctors, professors, publishers, artists,
  photographers, college students, and so on.

• D Rare, particular and expensive
• Not very dropping in prices.
• - We can keep high profit.

I think it is good chance.
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stocks
parts
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(3) Strategy
We provide good service and attractive items to
every Macintosh users continuously.
A one after another
We get Macintosh users to keep expectation at all
times.
- release rare item starting from 10 yen (in
auction) - sell Macintosh parts by weight - sell
Macintosh by the piece
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B Quick service in any case
We try to accept all of their requests.

• Time is money. Early solution is first priority.
• - Maybe we are the fastest to repair in Japan.
• We can answer users question immediately.
• We can make cheaper estimate.

Actually we accept them about 65 percent.
Request to discount is the most, but we cant
accept them easily.
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C Role of second opinion
They can use us to find their best solution.

• We want to refer to our opinion totally.
• - We reveal our nice and easy service.

We believe they will choose us to have their
solution finally.
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(4) Tactics for high profit
A Easy access

• It is free to consult with us about Macintosh.
• Users can talk without a shade of hesitation.
• - There are triggers to get new clients.
• - Effectual and free advice make for good
  relations.

Telephone, fax and email
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B Not cheep, not expensive
Reasonable price is not cheap, and not expensive.
- We dont reduce the price excessively. - It is
very important to keep average price. - Unlimited
discounts lead deflation spiral.
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DS curve
Price
Demand
Supply
(temporary)
typical
r2
r0
emergency
r1
Quantity
We try to keep r2.
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C Making much of rapid service
The earliest and the fastest

• supplying Macintosh parts to customers within 24
  hours
• - only 1 hour to repair (take directly)
• - 2 nights 3 days to repair (use delivery)
• - having some advice immediately (enough
  knowledge base)

Time is money!
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D Multi-profit system
Scarcity value
selling
parts 1
user
Used Macintosh
(delivery)
selling
parts 2
user
set it up
repairing
parts 3
Parts 4
(delivery)
Macintosh
recovery
selling
junk parts
recycling user
(delivery)
buying
We have some ways to get profit.
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After
Before
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our gain from this model
(a) Selling used parts profit selling price
(including scarcity value) - prime cost
(b) Delivery service profit fixed price (800
yen/box) - effective cost
(c) Repairing service profit all service charge
(ave. 8,000 yen/hour)
(d) Selling junk parts profit all selling price
(no prime cost)
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Simulation (ex. prime cost 500 Euro )
1 selling Macintosh as all in one - 550600
Euro (Max 20)

• 2 selling it as 10 parts (50 Euro/1 part)
• (a) selling - 6070 Euro (Max 40)
• (b) delivery service - ave. 3 Euro/1 box
• (c) repairing service - ave. 6080 Euro/1 hour
• (d) Selling junk parts - 67 Euro (about 10 of
  normal parts)

Total - 70 Euro 10parts 3 Euro 10 box 80
Euro 7 Euro - 697817 Euro (Max 60)
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(5) Target, policy and belief
A Target
We have looked for good clients to have enough
budget.
a Corporation and organization - ex. medical
office, extra-governmental organization,
university, school, and so on.
b Individual - ex. practitioners, professor,
designers, architects, entrepreneurs, Macintosh
maniacs and so on.
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B Policy
We have only cash transactions without regard to
corporations or individuals.
We have never had bad debt.
We use only equity capital ( We have no debt from
bank).
We have no responsibilities of interest, hence
we can keep low price for clients.
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C Belief

• Personal users have their own budget.
• We analyze the content of their wallet.

It is their sense of value.
Their average allowance is 42,000 yen per month
in Japan. - Average price of salable item is
5,000 30,000 yen.
We provide salable items for them, positively
and continuously.
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Data 1
Question How much is average of workers
allowance? Average 42,700 yen(round 100 yen
off) Twenties 34,900yen Have children
41,500yen Thirties 39,000yen No children
40,700yen Forties 46,100yen Housewife
41,900yen Fifties 49,300yen Work
in double harness 40,600yen Single 47,800yen Have
salary increase 43,700yen married 41,300yen No
salary increase 40,500yen
Reference 2003 survey of workers allowance (
GE consumer credit, ltd. )
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Data 2
Change of workers allowance
Reference 2003 survey of workers allowance (
GE consumer credit, ltd. )
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(6)Management and control of stock
It is quite very difficult to manage and control
the stock.
A We cant buy used computers if there are no
sellers. B Unsold parts are including in
computers. C Inferior products or bad
condition. D Sharp fluctuation of value.
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A We cant buy used computers if there are no
sellers.

• We can buy them higher than others
• Dont skimp for buying.
• - If buying higher, they introduce their friends
  and fellows to us.

It is important to get good vibrations from
them.
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B Unsold parts are including in computers.

• We have low or no estimate for unsold parts.
• There are some cases to sell them freely.
• We can gain profit of delivery.

C Inferior products or bad condition.
It is the same way to B.
Almost we can sell unsold parts easily in this
way. We can save fee to deal with refuse.
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D Sharp fluctuation of value.

• We keep efficient stock cycle.
• We can sell stock before fluctuation.
• - The average of stock cycle is 7 days(1 week).

Efficient stock cycle brings good cash flow
stably.
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stock up on parts
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(7) Human Resource Management

• A heavy rules
• In principle, all employees are free. It is no
  penalties to be late, leave early, absent, and so
  on.
• But they have to work according to their
  judgment and responsibility.

There are some burdens, naturally in works.
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B Empowerment
We dont help except in case they say Please
help me!.
It is no penalties to have mistakes if they work
by themselves.
It is a disgrace not to have empowerment for
them.
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Jobless?
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C coffee break

• Every day we drink a cup of coffee with them.
• We have chat, especially indifferent talk, as
  soon as possible.
• - We can find their complaints early to have chat.

It is important to keep them calm, have relax and
enhance efficiency.
We have to arrange good environment to work
them comfortably.
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D skill training
They dont need to master special technique. - It
is important to know not only electrical
engineering but also architecture of Macintosh.
We can only change accident parts for normal
parts.
They have to memorize some cases of trouble. -
They learn many things if they have some
experience in works.
As a result, they can explain detail of issues
immediately for customers.
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studying now
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(8) Motivation
A gourmet society
Periodically we have dinner with all employees. -
They are free, and they can propose favorite
restaurant.
B regulation

• They cant work over 8 hours if they leave works.
• We prohibit working overtime.
• - We keep their leisure.

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C announce our profit
They can know detail of profit to be got by their
works. - We make them awake to management at any
time.
D present
It is free to take useless items which we cant
sell to customers. - blank media, software,
accessory, novelty, and so on.
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(9) Challenge (overcome some problems)
A continue to buy stably
Our buying is always unstable now. - By
contraries, there are some cases to buy too much.
In the present state of affairs, we have bought
anything regardless our stock. - Because it is
more better than out of stock.
It is the best to have system that we can get
only necessary items, if needing.
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B Regular clients
Almost clients are temporary. - Over 98 clients
are individuals.
There are few companies to use Macintosh as main
computer. - It is difficult to get big order.
We try to get many small orders from small
business.
We provide some service to them totally.
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C on our own terms
We want to mark average price which users refer
first of all. - We can dominate the market of
used Macintosh parts in internet.
We keep stability of the market. - We have to
stop endless price war for competitors.
It is very important not to injure each other.
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D act dead

• We always emphasize our pains, this business is
  not profitable.
• We contain new competitors.
• - It is effective, surprisingly.

We have to gain surely and inconspicuously. -
Keep underground.
We think it is stupid to make a boast of good
result.
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(10) Next step

• There are three courses as our master plan.
• increasing deals (quantity)
• increasing items (description)
• - increasing channels (distribution)

2
2
1
1
basis
8 times
1
2
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If we increase twice about all courses, we can
gain 8 times.
But it is not easy to increase them, especially
channels.
Tomorrow we have to have diversification.
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A except Macintosh

• Handling VAIO (Sony), Mebius (Sharp), Dynabook
  (Toshiba)
• They are brand-name goods in Japan.
• - But there are no companies to specialize in
  used of them.

There are possibilities to have new markets.
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B making new items
We will exploit new items about Macintosh. - etc.
Inner case for notebook
under negotiation to maker and designer
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C export and import
We want to expand our network for foreign
countries.
?
We will trade anything if there are some profit
and advantage.
Please consider and raise your idea.
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D incubate next entrepreneurs
I want to tell them my all things for managing
companies. - If there are a lot of subsidiary
companies, we can help each other not using
stupid Japanese bank!!!
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Points of discussion
If you are president,
1. What is the most important thing to do
management? 2. What is the way to get more good
clients? 3. What is the way to encourage new
talent as entrepreneur?
Please give me your opinion.
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Appointment
( Zero-Nana-Hachi Limited )
Address 4-5-4-102 Kusunoki-cho Chuou Kobe
Hyogo, Japan Zip Code 650-0017 TEL and Fax
0081-78-341-4078 President Yoshiaki
Nakano Email nakano_at_kobe078.com URL
http//www.kobe078.com