A big order for Hornblower Manhattan Cruises
Paul O’Mahony : Welcome to another conversation with Trevor Winckworth, CEO of In Hand Guides. We’re sitting in the Maryborough Hotel in Cork and we’re going to talk about latest developments at In Hand Guides.
Good news : Big order for Hornblower via AudioConexus
Trevor Winckworth : Nice to talk to you, Paul. I have good news for you and to all our visitors : we’re just shipping, for Hornblower in Manhattan Cruises via our partners AudioConexus International. 50,000 units are shipping out from China on the 18th of March to land in Manhattan, New York, on 23rd of April. These are to be launched on the first week of May on their boats which take you around the Statue of Liberty and Ellis Island.
Paul: These are branded players which Hornblower will sell?
Trevor: Right, with embedded audio.
Paul: So, tell us first, who has made the audio?
Trevor: Our partners in Canada, AudioConexus produce the audio in 8 languages. What’s interesting is they are pre-selling them to operators who come down on buses. They will sell them to walk-ons. Of the 50,000, half of them are in Chinese and Mandarin. So, they are targeting 400,000 Mandarin speaking visitors to come on their boats this year and they are looking to pre-sell to them.
Most of them won’t speak English. They only want to see iconic sites. They want to shop and see iconic sites. So we are making a big push this year to target tour operators and get people thinking outside the box. Don’t just wait for people to walk in to you. Get to the tour operators. Pre-sell your product to them – because then you’re selling 50 for every 5 or 10 who walk in – and you offer them a choice.
Paul: And when the Chinese people go back to China, their word of mouth in relation to that tour operator will be pretty good, wont’ it?
Trevor: It will, because they’ll have a souvenir to bring home. And some of them won’t listen to it until they go home. And it’s branded. It’s in their language and it tells them a story. And it’s the growing market. So we are selling all languages, we’re in — this product is English, German, French, Italian, Spanish, Portuguese, Korean, and Mandarin.
Paul: And you said 50,000 units.
Trevor: Fifty thousand, of which half of them are Mandarin…
Manufacturing in China :
Paul: Was that a tricky operation or very easy? To get 50,000 units made in Shenzhen, isn’t it?
Trevor: No, it’s smooth now. It was just bad timing – as it always is – because of Chinese New Year. So we had to push a little bit. And our manufacturer is very good. He pushed a little bit too. So we got it all done and dusted in January with a little bit of tail production last week.
Paul: And tell me, does embedding the audio take place in China?
Trevor: Everything is done in China. There’s three components to the units:
- There’s the internal controller which is our little patented secret which is built to our specifications.
- There is a memory chip, which is the audio embedded on it by a third party on behalf of us with the manufacturer.
- There is the physical putting of it all together – which means the PCV board, the memory, the shell of the unit and the player front – which is also the control panel.
And, in this case, also a lovely souvenir packaging. So it is a very nice looking souvenir. We’ve also moved this year to offering everybody soft silicon headsets at the same price. Last year, it was the old style hard headsets you put in your ear. Everybody gets a soft bud silicon headset this year.
Paul: And they could take these headsets and go often use them on their smart phone, couldn’t they?
Trevor: Oh the headset has probably the same value as the audio player unit, if you go retail it. The headsets is about $10 or €10 these days in HMV or any of the shops So they’re getting a good deal.
Paul: The audio players – how do you check to make sure that the embedding has been done to the right quality standard?
Trevor: Our manufacturer whom we worked with for two years has his internal quality control. We send in our private QC guy after each production run. He has a “golden sample”. We start with a golden sample. Two samples are made of each language for any client. One goes to the client to sign off. The other one is kept for our QC guy to check against. Each production one is kept separately, so we don’t mix them. We don’t mix the languages so that they come off the production run separately. And our QC guy pulls out a random sample of 200 units from every 5 to 10,000. He does a full QC check on those: language player front, quality of production… He opens them, tests batteries, boards, controls. He drops them on the floor to do a drop test.
And then he sends us an electronic report within 24 hours. He has the right to accept the production or refuse it. If he refuses, it stays in the factory. We’ve never had a full refusal. We’ve had queries where he says I’m not happy with this or that. Then it’s held and rechecked. If he okays it, the manufacturer can then ship it.
Paul: In New York, now you’ve just come back from there, have you travelled the route yourself? Have you been to all the places?
Trevor: Oh yes. It’s on a boat. So I did that in January. It was freezing and last week it was snowing in New York, so I’ve checked it. I’d always go and see what the client is up to – because when we launch it, the important thing will be to support them on the ground. We want to help make sure everything’s done smoothly from an operation side.
So for example, we’ve just created a video showing how to use the unit in easy steps which we will offer to all our clients at the site of selling it. So that could be on the #[7:31] showing.
Investment in In Hand Guides :
Trevor : The other interesting good news was we closed with an investment from Enterprise Ireland (EI) last week.
Paul: An extra investment?
Trevor: Yes, God bless them, they are great at supporting businesses like ourselves because we’re an export company. Everything we run in factory goes through our books and, as you know, the research is done here and the jobs are here. So we’re going to be looking to employ two new people in the coming months.
That investment was timely because it’s still very hard to finance a growing small medium company.
Paul: You’ve had to get 50,000 units out of China. My understanding is that before the Chinese will release them to you, you’ve got to pay for them.
Trevor: Hundred percent.
Paul: How are doing with getting the money from banks, as working capital, in order to pay to get the goods released?
Trevor: Here’s when you use bad five-letter words…
Paul: You are talking about banks now.
Trevor: Yes, bank or banks, yes, they’re terrible words. The support isn’t there despite all the guff you hear in the radio. It’s sensitive and I don’t want to get into too much about it. But it’s the one area in which the business is not working. It’s still broken. and no matter what you do, you end up scrimping & chasing & doing cash flows. We never have what we need, and they don’t seem to understand it. It’s not a five-year-old work this out, we have to pay a 100 percent. Our clients give us a deposit. We have to fund the rest and we’re getting our money back 15 to 45 days later, depending on the client.
Paul: And your clients always pay?
Trevor: We’ve never had a bad debt. They always pay and yet we’re always back at the bank saying so. Last year our business grew to close to $1m. This year we’re hoping to do about $1.5m. That will be a little bit down now because of the exchange rate and you’re funding that without the added bank support. And if tomorrow morning the Manhattan order goes well, and they order 50,000 more units, we wouldn’t have the funding to do it. Because there isn’t the extra room. We’ll be back in the same situation. They just don’t seem to get it.
Paul: And do you see any hope? Lots of people will be aware about bank financing: banks are saying “we’re giving more and more money to business”. We had bank results recently showing that the banks are back in profit. Do you see any hope of an improvement in this area?
Trevor: Well, I hope so, because our in-house accountant Gillian was at a finance meeting yesterday morning. She was chatting to bankers. What we’re being told on the ground is not what you’re hearing on radio or TV. Bankers are admitting privately it ain’t happening. But of course, on TV, it’s all wonderful and great. I’ve yet to see it.
Paul: Okay. Well, look, that’s enough about banks for the moment.
Trevor: Please don’t use those four letter words. We were having a good day.
New business developments :
Paul: What do you see coming up? Is there any new business development you want to tell us about?
Trevor: There’s lots going on at the moment, which is a good thing. We will be in Cardiff City, that’s agreed. I’m just waiting for the audio.
We’re producing a new order for 9/11.
We’ve just got St. Patrick’s Cathedral in Dublin who have come to us and that’s in production.
We have a new order for Genoa Italy Tourism, from last year – they’ve reordered and added a new language.
Our friends who produced The Rosary on a product – and retail it through Veritas – have just reordered.
And the big one we’re doing ourselves : we’re launching a 1916 audio walk of Dublin in conjunction with #[12:11] who does the walking tours. We’re going to push that to the Diaspora. And that will be in production next month, this month as well. That’s our own product.
We’re also going to launch some city products ourselves to target tour operators – so, Dublin in 20 minutes, London in 20 minutes, New York in 20 minutes. We’re going to produce them in English & Chinese and go after the growing Chinese market. See can we crack that.
Paul: Well, another day we’ll talk about this because this is definitely a shifting of the company from business to business to business to consumer as well. That’s a really interesting challenge ahead.
Trevor: We’ll talk about another day.
Paul: Trevor Winckworth CEO of In Hand Guides, thank you very much for talking with me today.
Trevor: Thanks, Paul, and don’t upset me like that again.