Business Innovation for SMEs

Gail MCEvoyinnovation

Following on from earlier blogs on SMEs,family business , exporting and entrepreneurship which can be viewed at the following attached link this latest blog is around innovation .

Thanks to the contributors to this blog namely Gail McEvoy CPA of McEvoy Accountants and recently appointed board member of IFAC.

IFAC is the worldwide organisation for the accountancy profession and comprises 173 members and associates across 129 countries.

Also thanks to John Mackey of Bibby Financial Services Ireland Ltd.

99% of all enterprises in Ireland are Irish owned SMEs which employ 70% of all people working in the state. Latest reports show that more than half of the people working in Ireland – some 56% work for indigenous companies which do not export anything at all .

More than 90% of people in Ireland work for a company that employs fewer than 10 people.

A lot of SME owners are already innovative and are constantly brainstorming to improve their business and processes and doing SWOT analysis regularly. From working with SME owners in the business advisory piece sometimes it is trying to implement the ideas that becomes the challenging part .

How do you create an innovative environment in your SME?

While I can’t prescribe how to make your SME innovative, these tips can help you breed a culture that contains innovation in its DNA:

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1. Innovation only comes by invitation. Invite people to bring forth their new ideas. True innovation takes place when people are free to raise ideas, take ownership of them, and then implement them. If people are required to ask permission for every step they take, they will stop asking permission.

2. Innovation is not a solo sport, it requires a group of players with skills specific to the effort. While an idea may come from one individual, it’s the cross-functional creativity, trust, and collaboration that bring innovation to life.

3. Encourage everyone to put their ideas to test fast, fail fast, and then reiterate. If people wait for perfection before they put the idea to work, the effort will lose steam before it ever gets off the ground. Implementation of ideas is as important as the idea itself .

4. Value the lessons taken from failure as much as your successes, and apply those lessons toward each new attempt. This makes it safe for everyone to innovate. The idea is not to encourage failure but to foster innovation that leads to winning success as rapidly as possible. A lot of SME owners have taken their knocks in the ups and downs of business which makes entrepreneurs more resilient .

5. Ensure this behaviour gets modelled at every level, from the very top down to individual contributor. That means the senior management must be actively involved, not just mandating the change.

6. Consult with your CPA and build innovation into your business plans for 2014/15 and look at doing things differently so you have a USP in your business. Do a review with your CPA and discuss your goals for your business and build them into your business plan and cashflows .

Cormac Fitzgerald FCPA

Entrepreneurship Report Published

Sean-O-Sullivan

The Report of the Entrepreneurship Forum was published January 23rd. The Forum was established as part of the Government’s Action Plan for Jobs 2013. Two thirds of all new jobs come from start-up businesses in the first five years of their existence. 69 recommendations have been put forward by the Forum. It is chaired by Kinsale based entrepreneur Sean O Sullivan of SOS Ventures.

These recommendations occur across four dimensions:culture, community,competency and capacity.

Included in the Report’s recommendations are:

Changes to law to support employee stock option programmes
• A national education strategy for entrepreneurship at all levels of the education system
• A mentoring network driven by entrepreneurs and tax incentives for investment in enterprise

How to unlock creative confidence:

Is your workplace divided into “creatives” versus practical people? If so, some inspiration from David Kelley, founder of IDEO. What matters to him is unlocking the creative potential of people and organizations to innovate routinely and let ideas fly. David Kelley suggests, creativity is not the domain of only a chosen few.

Telling stories from his legendary design career and his own life, he offers ways to build the confidence to create, to innovate (From The Design Studio session at TED2012.)

CPA

Thinking outside the box – Innovation for SMEs

Innovation is the application of better solutions that meet new or existing requirements. This is accomplished through more effective products, processes, services, technologies, or ideas that are readily available. An excellent example of innovation would be the “sliced pan”, slicing bread was innovative as it was doing something different, adding a process that had a significant impact.

How do we as SME owners and Entrepreneurs become more innovative?

Innovation has to be the Ethos of the business, the ideal. It forms part of the values culture of the business, how the business operates and its conduct in relationships. Innovation must form part of your overall strategy. Examine your current strategic plan and see if innovation is at the cornerstone.

This culture cannot be switched on and off it must be encouraged and nurtured amongst all team members. As with all things in business this comes from the top down, as leader you must encourage your team to share observations and ideas and not to be afraid. Everyone needs to be on board with this, they need to have a “why not” attitude to ideas and new processes, to be constantly looking to improve and innovate. Some ideas to get that innovative attitude started;

• SWOT testing on a regular basis to include breaking down the existing processes taking a microscope to them looking for weaknesses and potential add-ons.
• Look at an “ideal scenario” – asking if money were not an issue what would we do?
• Include an “innovation” item on the agenda to every team meeting, encouraging all participation. This brainstorming with your team will help develop and encourage an open door approach to new ideas and new processes.
• Encourage everyone to be more observant of the competition, this will form the basis for new ideas. Also watch what businesses aligned to your own are doing, asking can we do something similar?
• Make it interesting, offer a prize to the individual whose ideas are implemented and also a special prize to whoever submits “the ridiculous” suggestion, this will encourage an open door approach to every idea.
• Look at what your customers would like, what would make their lives simpler? Asking clients/customers for ideas and suggestions. It might pay to reward these too.
• Market research can be very useful, asking the general public will give an unbiased perspective.
To stand out and to survive we need to innovate and we cannot do this alone. We need everyone on board and keeping an open mind is the key. Being fearless, not afraid of change is the attitude that will nurture and encourage an innovative attitude.

Gail McEvoy

MCEVOYACCOUNTANTS
10 Dublin Road, Drogheda, Co. Louth

Tel: +353 (41) 98 10 160

gail@mcevoyaccountants.ie
http://www.mcevoyaccountants.ie

Tips to give you the best start to the year that will help nurture an innovative culture in your business this year.

John Mackey, Bibby Financial Services Ireland

Bibby Financial Services logo - JPG

Conduct a review of 2013 and the cost of credit. Review what worked well over the past year for the business and what did not – did extending credit terms to customers or taking advantage of economies of scale reap the benefits it hoped to? What were the financial implications and were they worthwhile? Learn from mistakes -by looking at the successes and failures over the past year you will be in a far better position to plan effectively for 2014.

Encourage strategy – Many SMEs fail to see the importance of strategising and planning for the year ahead, including contingency planning, crucial in the current environment. The business will need to start by reviewing their objectives, or in many cases, construct for the first time. You need to prioritise everything you want to achieve in the coming year and work out the financial requirements involved in doing so; the business may be over or indeed under estimating what they can afford to do.

Seek new ways of financing – Be open to considering new and alternative ways to finance the business as traditional methods may not always suit the current circumstances.

New Technology – Explore and embrace new forms of technology in your everyday business systems that will bring efficiencies to the business and in some cases cut costs.

Consider new opportunities – Take the time to research new business opportunities. With clear minds after the business break, a brainstorming session with your internal teams may inspire ideas that could help move the business forward through developing new products and services, new customers and new markets. Educate yourself on the various finance options available– what worked or was available last year may not be the same for the year ahead. Look beyond the traditional finance options to more readily available alternative funding solutions which can provide additional benefits to traditional financing – Invoice finance for example, guarantees SMEs working business to business and billing in arrears a flexible and on-going supply of working capital

Explore potential for exporting – Irish exports remain the backbone of our economy and increasing numbers of our SMEs are reaping the rewards of their export activity. Yet entering overseas markets is still a minefield for many businesses. Variances in legal practices, lacking on the ground assistance, language barriers, foreign currency management and fluctuating exchange rates are key difficulties that Irish businesses face when considering exporting abroad. However, comprehensive credit management facilities with multi-lingual and culture experienced credit control teams can help SMEs overcome these issues and allow them to export with confidence that their cash flow requirements will be met and customer payments chased and collected on their behalf.

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Take control – Get a detailed view of the debtor days in the last year – is late payment an issue for the entire ledger or is there a number of repeat offenders who are causing problems? Every customer is vital to an SME, but some late payers could be causing more problems than they are worth – it is vital the business separate the wheat from the chaff, both for the current term and for the long term. Work with your CPA accountant to develop watertight debtor management systems, including their issuing regular statements and reminder invoices and calling customers if payment is late.

Harness people power – Assess staffing levels for the coming year and ensure staff holidays or peak season demand is accounted for – will extra staff be needed for these periods? How much over time from current staff will be required? At what cost? Or perhaps skills gaps within your workforce are holding them back?

Manage the cash – No matter how well inspired, prepared and organised, good cash flow is the lifeblood of any business. Make sure you take a pro-active approach to managing cash flow and aren’t waiting until it is too late to deal with problems. There are support mechanisms out there ready and willing to help and their doors are wide open for business.

Tel: +353 (1) 2974925 | Fax: +353 (1) 436 4598
Email: JMackey@bibbyfinancialservices.com | Web: http://www.bibbyfinancialservices.ie
Address: 4th Floor, Heather House, Heather Road, Sandyford, Dublin 18, Ireland

Thanks for reading !

Cormac Fitzgerald

Cormac Fitzgerald FCPACormac Fitzgerald FCPA is Managing Partner of Fitzgerald & Partners Accountancy Firm and Vice President of CPA Ireland .

Entrepreneurs & SME Toolkit -Part Three

EntrepreneurshipThis month, I have asked some successful entrepreneurs to share their knowledge to help SME start ups and people considering starting their own business .

Each week I will publish a different perspective from some valuable contributors .

In our first week we had a really interesting post by Jorge Rodriguez CEO & President of PACIV.

Last week we had a post about exporting by Joe Aherne CEO of Leading Edge Group and President of CPA Ireland .

I hope you find this useful and thanks to all contributors for taking time to share their intellectual property online .

Cormac Fitzgerald - Fitzgerald & PartnersCormac Fitzgerald FCPA is Managing Partner of Fitzgerald & Partners Accountancy Firm and Vice President of CPA Ireland .

 

John White FCPA ,Managing Director of JBW Consultants – on starting a new business .

Planning Starting a new business is simple – You just have to sell something to someone for profit!

Or at least that’s what most fledgling entrepreneurs’ initial thoughts would seem to be.  But when you break down those three “simple” activities into smaller pieces by asking the: “Who?; What?; Where?; When?; Why? and How?” questions, for each activity, you begin to see that planning your business start-up is actually the key.  Get out a pen and paper (or whatever device you prefer) and write down how you are going to “sell something to someone for profit!”.

You know what the business idea is, but what about getting if from an idea to the stage where you get to keep the profit?  Consider your customers, location, competitors, finance, human resource, suppliers, logistics, technology, capital investment, taxation, legal issues and ownership structure.  You’ll be surprised by what you don’t know.  Identify your weaknesses before you start your business and decide how you are going to cover those weaknesses.

People don’t think you know it all – because you don’t!  Surround yourself with experienced people that understand you and your idea and are not afraid to guide you with critical analysis.  Listen to what your “advisors” have to say; consider what they have said and then decide to either ignore their suggestions,  act on their suggestions or explore their suggestions a bit further.

Experienced entrepreneurs got their experience by making mistakes along the way.  By not repeating their mistakes your business will get a head start.

Seek out professional and experienced advisors that you can work with and who have a track record with your industry.  Ask them about their experience.

With staff, don’t waste time trying to bring on the weak employees.  Move on with finding the right people for the right roles.  When recruiting staff, give a weighting to the hunger they show for your business and for their own career development.  This is more important that picking the genius, because a start-up needs dynamic and enthusiastic team to do what is needed to be done, not just what they were asked to do!

Profit find out what financial assistance is available to assist start-up businesses in your area.  Governments want start-up to flourish as they have the potential to employ people who pay taxes and spend their wages!  The first three years of any start-up are critical.

You have to invest significantly in Capital and Marketing without any certainty of a return on your investment.  If you can find financial support to get you over the initial years this will be invaluable to the sustainability of your new business.

Don’t strip all of the profit out of the business for yourself.  As a rough guide (depending on the sector you are in and the level of borrowings you have) try to aim to leave 4% of your turnover in the business each year.  This is needed to support growth and to finance your working capital needs while growing your business.  But don’t be totally distracted by profit.  The real lifeline of a business is cash flow.  Make sure you have full sight of and control of your business’ cash flows.

John White- JBW ConsultantsJohn White, FCPA is the Managing Director of JBW Consultants ( www.jbw.ie ) , a multi-disciplined professional services firm which specialises in support for SME and family businesses.  John also serves and a non-executive directors on a number of internationally trading companies.

CPA Logocpa website

Entrepreneurs & SME Toolkit -Part Two

Innovation

This month, I have asked some successful entrepreneurs to share their knowledge to help SME start ups and people considering starting their own business .

Each week I will publish a different perspective from some valuable contributors .

Last week we had a really interesting post by Jorge Rodriguez CEO & President of PACIV.

I hope you find this useful and thanks to all contributors for taking time to share their intellectual property online .

Cormac Fitzgerald FCPACormac Fitzgerald FCPA is Managing Partner of Fitzgerald & Partners Accountancy Firm and Vice President of CPA Ireland .

 

 

 

Joe Aherne – President CPA Ireland and Chairman of Leading Edge Group

joe Aherne

6 Tips for SME’s entering a new Export Market:

  1. Identify the market most suitable for your products in relation to market potential, ease of access, language and cultural barriers
  2. Engage with Enterprise Ireland and discover other Irish companies exporting to that market. Meet with these companies and gather market intelligence and conduct a competitor analysis.
  3. Build a solid client contact base with potential clients and strategic partners in the market place by for example using social media tools such as LinkedIn; targeting subsidiaries of existing Irish clients and by procuring data mail lists for targeted sales campaigns. Build relationships and secure appointments for future visits.
  4. Visit the export country as part of an Enterprise Ireland Trade Mission
  5. Initiate a 6-month online marketing campaign to adequately test market and set pre-defined sales targets
  6. Visit market regularly to monitor and track progress

Joe Aherne, FCPA

CPA Logo

CEO Leading Edge Group, Charter House, Cobh, Co. Cork, Ireland.

Leading Edge Group – Ireland, Canada, UK and Australia www.leadingedgegroup.com

Want to find that business idea? Get started? Looking for some inspiration? I Saw this great clip Entrepreneurs can change the World… which was part of a presentation by Gerard O Donovan , Head of School of Business ,CIT ,Cork .

CIT

CPA Ireland – Supporting Entrepreneurs .

Finally, CPA Ireland launched its new look website this summer and it has lots of helpful, freely available resources aimed at the Irish business community.

You may be familiar with the CPA Ireland’s  excellent report on entrepreneurship, released late last year . It makes for very interesting reading with some proactive recommendations for much needed support in this area.

The CPA Ireland Business App , the CPA Business Tracker is worth checking out and available to download for free directly from the website. It allows businesses to input key finances and automatically calculates financial ratios to measure their company’s performance.

Entrepreneurs & SME Toolkit for business-Part One

John Herlihy -Head of Google Ireland

John Herlihy , head of Google Ireland with Eamonn Siggins CEO CPA Ireland and Joe Aherne President CPA Ireland

This month, I have asked some successful entrepreneurs to share their knowledge to help SME start ups and people considering starting their own business .

Each week I will publish a different perspective from some valuable contributors .

I hope you find this useful and thanks to all contributors for taking time to share their intellectual property online .

This link might be useful to you  ( http://cpa.newsweaver.ie/conferences/1gwgawc5kbn – a link to the CPA Ireland Budget Bulletin )

Cormac Fitzgerald - Fitzgerald & PartnersCormac Fitzgerald FCPA is Managing Partner of Fitzgerald & Partners Accountancy Firm and Vice President of CPA Ireland .

 

Guest speaker at this year’s Institute of Certified Public Accountants in Ireland’s Annual President’s Dinner was John Herlihy, Vice President of International SMB Sales and Operations and Head of Google in Ireland (L), pictured here with Eamonn Siggins, CEO CPA Ireland and Joe Aherne, CPA Ireland President.

John’s address was very insightful and gave those in attendance much ‘pause for thought’ in terms of the accountant’s role as strategic business advisor in helping our client companies take advantage of the digital opportunity. As the National Digital Strategy for Ireland reveals, digital currently contributes 4.4% to Ireland’s GDP. The digital part of the economy in Ireland is growing at 16% per year – that is more than 10 times the rate of growth of the economy as a whole. This growth is reflected across Europe – The EU Commission Digital Agenda for Europe claims the digital economy is growing at seven times the rate of the rest of the economy.

A Global Engineering firms perspective ……Case study in success

Jorge - PACIVJorge is the Founder, President and CEO of PACIV, a control system engineering firm. PACIV has offices in Puerto Rico, United States and Europe. PACIV provides operational efficiencies for manufacturing processes utilizing instrumentation and control systems to provide process automation. PACIV clients include the largest Biotechnology, Pharmaceutical and Medical Device companies in the world and other multinational clients in related industries. PACIV has over 80 associates world-wide and has sold over $135 Million over the past 14 years. www.paciv.com for details .

SME Tips – “First things first”

Twelve years after founding PACIV, a specialized service firm in the area of industrial automation, instrumentation and regulatory compliance, I went back to the university to do an Executive MBA, this after already having done an MBA 12 years before.  For some reason, I felt that the business practices of today where outgrowing my knowledge on them, I felt behind.  I was not only correct, something I confirmed during my first year of courses BUT I was surprised as how little did I know.

In this column and hopefully future ones, I will share with you some of the major learnings of this new renaissance.  Our classes included leadership, strategy, innovation, global markets, controls (accounting), finance, and marketing.  I draw at least three critical learnings from each topic and most importantly, I drew one main learning from the fact that the “alignment” about each of these topics to the others. The glue, called “alignment”  that holds them together independently is critical to be able to derive the most value through their synergies.

On this edition I will start with Strategy.

The three (3) main lessons for me were

(a) you cannot delegate strategy.  Strategy is the #1 responsibility of the CEO, owner, principal partner,

(b) strategy is as much about what you decide to do than about you decide not to do,

(c) strategy is about defining where you are going to play, how you are going to play and with whom you will play.  These are extremely complex matters for any business leader.  At the core of these subjects resides without a doubt the most important learning of the entire course for me, that “who you are” must be very clear to you before you start addressing any of these questions

Defining “who you are” as a company, probably as with us as individuals, has been the most difficult and painful activity to define in the process.  There are many Fortune 500 companies that as of this day do not have clearly stated who they are.  As such, the clients are confused.   Great examples of knowing who they are very obvious to you.  Companies such as IKEA, Coca-Cola, Doctors without Borders, and others are known to many not necessarily because they are international brands but because they are so clear in knowing who they are that they can sustainably and clearly communicate it to their stakeholders.

I encourage you to spend the needed time defining “who you are”.  I caution you that if you are an existing business, who you are is probably established already in the minds of your customers so prepare a survey and make sure you listen to who they believe you are.  Without reading the surveys from the client, do your own internal exercise defining who you think you are as a company and then compare.  If there are significant gaps you have a long road ahead – but at least you have identified the root cause of many of your problems.  If the gaps are close, congratulations, you have been sending a clear message even when not knowing it.

The definition of “who you are” was presented by my strategy professor; Cynthia Montgomery (read her new book “The Strategist”) in our class as follows.  Imagine you are in the funeral of your company, it is being “buried” and you go there and ask those present to describe to you what do they think they will miss the most.  Whatever they tell you they will miss, that is who you are.  Plain vanilla.

The best tool to come up with a clear definition of who you are is what I call the “OAS Statement” (Objective-Advantage-Scope).   In an OAS statement, define the following:

  1. What our goal is (specific objective bounded by time) and Goals (inspiration, open-ended, motivational)
  2. Who we serve (customers and segments, where you will serve channel and geography)
  3. What sort of products and/or services
  4. Why they should buy from you  (the drivers of the corporate advantages, the firm’s unique configuration of activities and resources that enable it to realize its competitive advantage)
  5. How we do things differently in delivering that product or service (what the firm does uniquely, differently, and better than competitors)

PACIV OAS statement is as follows:

  1. Be a value-driven company by being a one source provider of instrumentation, control systems and regulatory compliance services for our global clients’ manufacturing sites in the pharmaceutical, biotechnology, and medical device industry by applying our unique combination of technical expertise, turnkey services and commitment culture.
  2. We achieve customer trust through honesty, integrity, and accurate responses to clients’ needs with cost-effective and reliable solutions while being a great company in which to work and a valuable corporate citizen to our communities.

I hope this first task provides you with the needed clarity of mind to tackle the many challenges of the organization (processes, structure and systems), its resources and its clients.  Upon completing it, you will embark with better tools to tackle other complex issues in the journey to achieve the needed alignment and exploit to its maximum the limited resources that we have.

For more information on this subject or any comments or questions, do not hesitate to contact me.

Kind regards,

Jorge L. Rodriguez | President & CEO

Email: rodriguezj@paciv.com

“A Harvard Business School Case Study”

CPA Ireland – Supporting Entrepreneurs .

Finally, CPA Ireland launched its new look website this summer and it has lots of helpful, freely available resources aimed at the Irish business community. You may be familiar with the CPA Ireland’s  excellent report on entrepreneurship, released late last year .

It makes for very interesting reading with some proactive recommendations for much needed support in this area. The CPA Ireland Business App , the CPA Business Tracker is worth checking out and available to download for free directly from the website. It allows businesses to input key finances and automatically calculates financial ratios to measure their company’s performance.

The app is accompanied by some background information on ratio analysis and a brief tutorial clip. Also accessible via the site is a free series of webinars called Taking Charge of Your Business . This initiative involves a series of short twenty minute presentations covering a variety of topics including Cash Flow Management, Recruitment, Marketing, HR and Risk. Similarly, the Institute’s long running initiative the  Simple Facts of Accounting Bulletins, help business owners understand complex accountancy and regulatory issues and how these impact day-to-day business.

The site has a host of articles providing advice in the areas of marketing, social media, technology, business planning and more. Finally, for job seekers, CPA Ireland JobSearch, lists jobs for qualified and part qualified accountants in companies around Ireland. The CPA Ireland JobSeekers function allows employers to browse CVs of potential employees for any vacancies they may have. Lots to see and learn so take a look around.

 Next week we have the perspective of Joe Aherne President CPA Ireland and Chairman of Leading Edge Group