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.

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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

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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

SMEs, Family Business and Entrepreneurship

entrepreneur text 2Small and medium sized enterprise SMEs play an important role in the Irish economy and contribute substantially to income, output and employment.  However, the recent global financial crisis created a particularly tough climate for SMEs with a reduction in demand for goods and services.  SMEs make a huge contribution to GDP and employment. 

The global financial crisis of 2008 however, created new challenges for SMEs.  Findings are mixed as to how effectively businesses have recovered from the crisis and coped with recessionary climates.  The impact of the financial crisis in the economic downturn that it entailed was substantial.  Many companies, SMEs included suffered negative repercussions such as reduced revenue or were even forced to close down.  So SMEs are now operating in a new business environment.  

Internationalisation is important for the competitiveness of enterprises of all sizes, particularly for SMEs.  Recent reports show that SMEs make an important contribution to the national GDP and employment.  Governments have implemented a range of policies to support SMEs.  Efforts have been made to support the internalisation of SMEs. SMEs tend to internationalise in markets close to home.

entrepreneur textSMEs rely on traditional funding sources for international activity.  All the evidence reviewed in recent reports for both previous studies and newly conducted research indicate that SMEs are important for economic success, particularly when they become active on the international stage.

Irish SMEs and family businesses are showing continued resilience while looking to address the challenges of the new norm.  There is no doubt that the recession has hit the Irish family business sector harder than their global counterparts.  However, they have adapted their business models and are now looking to the future.  Many SME owners rely on their advisors to help them navigate the maize.

While some ten years ago the challenge was succession, the ability to recruit and retain key people has emerged as a new area now to be tackled.  This is largely in response to strong growth ambitions.  Irish family businesses are now looking to expand and some of this growth will be delivered through exploring international markets.  The need for continued innovation is also cited as a key driver in order to move forward.  It is good to see pro-business initiatives like the CPA Ireland new finance app for business owners allowing them to track the performance of their company across a number of variables.

CPA Ireland Business Tracker App

Family businesses play a significant role in how our economy performs and it is important going forward that these businesses continue to operate at a competitive advantage.  Recent research highlights that family businesses take decisions for the long term and are committed to employment in the local economy. In 2012 according to recent reports over one third of Irish family businesses suffered sales reductions over the twelve months compared to just a fifth for their global counterparts.

Reports also show that in the SME Irish family business sector, over 90% of Irish family businesses surveyed reported to feeling a sense of responsibility in supporting employment in their area.

Eamon Siggins CEO CPA Ireland with President Joe Aherne

Eamon Siggins CEO CPA Ireland with President Joe Aherne

SMEs still struggle when it comes to developing internationally, lack of credit and debt is a major issue hampering the sustainability and growth of many businesses.  However, a significant number of SMEs continue to thrive despite the tough economic conditions.  They are our business heroes.  Their growth and sustainability will be the key to Ireland’s economic recovery and it is vital that they get the support and services that they need according to CPA Ireland President Joe Aherne.

We work with Entrepreneurs, SME business owners in the area of SME business advisory and reports like the CPA Ireland Entrepreneurship report make for some very interesting reading.

The CPA Ireland Entrepreneurship report can be downloaded, free of charge and contains some very useful information.  The second CPA Ireland Entrepreneurship report offers further evidence of that resilience and will hopefully assist the Government and the other stake holders involved in supporting entrepreneurship in making the policy and other decisions required to maintain the improvement in the environment for enterprise and entrepreneurship in Ireland.

There are some very hard working entrepreneurs with great ideas that just need some help and support to take risks which will in turn create employment.

Another pro business resource clients find useful is the CPA Ireland Taking Charge of your Business which is a collection of webinars on very relevant topics again free to SMEs to download .

CPA Ireland has compiled a series of webinars from a panel of experts providing unique insight to business owners. The short twenty minute presentations are free to access and cover a variety of topics including Cash Flow Management, Recruitment, Marketing, HR and Risk.

CPA will continue to add to this resource in 2013.

Seminars may be accessed via the list below:

Items contained in the report for example show that amongst the most encouraging overall findings in the Entrepreneurship report is a broad agreement that the climate for entrepreneurship in Ireland is not only positive, but it has actually improved over the last two years.

There was a feeling that many Irish business people had now recovered from the initial shock of the banking crash and its accompanying economic crisis and are now much more in a mood just to get on with things.  This in turn is feeding in to improvements in the overall climate for entrepreneurship in Ireland.

Hopefully 2014 will see the climate improve for SMEs, family business and entrepreneurship in Ireland and business owners will adopt innovation into their business.

Cormac Fitzgerald - Fitzgerald & PartnersCormac Fitzgerald FCPA is the owner of Fitzgerald and Partners and is Vice President of CPA Ireland

Fitzgerald and Partners are SME Business Advisory, Accountants and Auditors located in Kinsale in Cork