business plus march 2010

ContactThomas [email protected](086) 3682203

Stephen [email protected](086) 2231795

Or Mail to: Eclipse FinanceMill Street, Tullow, Co. CarlowTel: 059 915 2821

Book keepingTaxationCompany FormationBusiness ContractsSuccession Planning & WillsPayrollHuman ResourcesFinancial Advice

The average net circulation perissue of Business Plus through2008 was 11,641 copies.

Editor’s NoteBusiness Plus is published by Nalac Ltd30 Morehampton Road, Dublin 4Tel: (01) 660 8400 Fax: (01) 660 4540E-mail: [email protected]: www.bizplus.ieEditor Nick MulcahyAssistant Editor Graeme McQueen Marketing Director Siobhán O’ConnellOffice Manager Sinéad KeelySubscriptions Rachael SalmanMagazine Design Jackie Raftery, Michele BrosnanMotoring Correspondent Olive KeoghPrinting W&G BairdDistribution EasonISSN 1393 - 5712 Contents © Nalac Limited

March 2010 ISSUE 143

Nick Mulcahy

Editor

or the business owner going through a tight spot, it can be verytempting to stall VAT or payroll taxes payments to the Revenue. And

it’s amazing how many people get away with evading these taxes. A newreport from the Oireachtas Public Accounts Committee (PAC), chaired by

Fine Gael TD Bernard Allen, reveals that in the past decade €1bn in theseso-called fiduciary taxes have escaped the Revenue’s clutches, with €200m lastyear alone. Of course this situationmeans that compliant taxpayers haveto pay more taxes to satisfy theExchequer’s voracious appetite. Evenmore galling for business is seeingpeer firms simply wave goodbye totheir tax debts and start againunencumbered, often with theimprimatur of the High Court throughthe examinership process.

The reason why this cowboybehaviour is so endemic is that thereis no meaningful sanction for this taxevasion. Picture this scenario. Abusiness is treading water because of the recession and the directors decide they’llwind up the firm in nine months. In the meantime they won’t pay the Revenue aeuro. Unless the directors have form, it will take the Revenue at least that time toinstitute legal proceedings, especially if the cowboys sell a good sob story to theCollector General. When the firm is liquidated, the directors may face restrictionproceedings. But there is never a criminal sanction, and because of the protectionafforded by limited liability companies, the directors escape personalresponsibility for their tax thieving too.

In the US, payroll taxes are deemed to be held in trust for the state. They mustbe kept in a separate bank account and not used for meeting the business’srunning expenses. Where managers or directors wilfully fail to account for theproceeds, they are held personally liable. The PAC looked at this US provision butdecided that it’s not a suitable solution to stamp out €1bn worth of tax evasion inIreland. The committee speculated that if personal liability were attached todirectors, then in the event of trading difficulties there could be an incentive forthe directors to liquidate the company.

The politicians commented: “In today’s trading environment, the committeewould view such consequences as highly undesirable. Many companies areexperiencing cashflow difficulties and the majority of firms will not have theluxury of retaining fiduciary taxes in a separate pot to be paid over to theRevenue.” So there you have it from our legislators – tacit approval for SMEs toplunder VAT receipts and staff PAYE and PRSI deductions for working capital.Let’s pop some more champagne down in the Residence.

Check out the Business Pluswebsite for daily Irish business

news and magazine archive

SUBSCRIBE

PAC chairman Bernard Allen

Member of Magazines Ireland

Subscribe to Business Plus And Save 20%

● FREE Home or Office Delivery● ONLY €2.27 per issue

ANNUAL SUBSCRIPTIONIreland €25

Outside Ireland €45See Page 93

Subscribe online at www.bizplus.ie

F

VMware CISCO Microsoft Office & Servers ISEB Software Testing ITIL & Prince2 Business & Management Skills MindLeaders eLearning call 01 2402262 or [email protected]

Training & Performance Improvement

4 Business Plus March 2010

INFRONT

G overnment departments cut their spendingby an average of 13% through January, in linewith finance minister Brian Lenihan's statedobjective to limit the state's budget deficit to

under €20bn this year. Not so the Department ofAgriculture, where the year-on-year increase in spend wasup 130% to €296m. How come? Minister Brendan Smithauthorised payment of €190m in grant payments for theFarm Waste Management Scheme. This spend comes ontop of €50m paid out late last year. A total of €290m waspaid under the scheme in 2009, though the originalallocation was €220m. When the final tranche is paid out inearly 2011, total taxpayer outlays on upgrading farmbuildings will top €1.2bn.

So much for criticism of this government not supportingsmall business (though only if you wear wellies). The excusefor all this munificence is complying with an EU directivethat pollution of land and water by animal excrementshould be alleviated. Unlike other EU farm programmes,most of the lolly for the waste management scheme comesnot from Brussels but from Irishtaxpayers. In another sop to the rurallobby, farmers are to receive taxrelief from the income levy forcapital expenditure they incurcleaning up their cattle's dung.

This year €330m cash will also bedoled out to farmers for so-calledagri-environment schemes. Thoughthe EU Commission has yet todecide on more funding for faunapreservation, the Irish government is

pressing ahead with a new scheme that will pay up to€5,000 to 10,000 participants. These are farmers who havemaxed out their free cash under previous REPS schemes.

The Rural Environment Protection Scheme was launchedin 1994 to reward farmers for carrying out their farmingactivities in an environmentally friendly manner. Anotherinterpretation is that REPS is a method of giving farmersmoney for nothing rather than subsidising them to producefood surplus to requirements. REPS is co-financed 75% bythe EU and 25% by the Irish Exchequer, and 16 years afterthe scheme's launch farmers still need cash handouts toprotect wildlife habitats etc. REPS payments to farmers in2009 reached the highest level ever. So much so that a fewdays before Christmas, minister Smith had to secure Dáilapproval for a Supplementary Estimate, which brought thetotal REPS spend for the year to €370m.

The Oireachtas thumbs up wasn't a problem for theminister because if there's a single issue that unites FiannaFáil and Fine Gael, it's don't annoy the farmers. According

to Smith, his department'sexpenditure this year will amount to€3bn, with €1.7bn provided by Irishtaxpayers and the balance comingfrom the EU. Except of course thatIreland now sends back to Brussels€1.5bn per annum as Ireland’scontribution to the EU budget. So ineffect the Irish taxpayer is fundingevery single euro of the €3bn that’sdoled out to farmers, fishermen andthe food and forestry sectors.

FF/FG allianceensures cutsto spendingdon’t apply on the farm

GOVT. SPENDING JAN. 2010

€m ChangeAgriculture 296 +130%Education 741 -22%Enterprise 118 +9%Environment 232 -37%Health 1,237 -15%Justice 172 -18%Social Welfare 950 +16%Transport 122 -54%

Brendan Smith: big spender


INFRONT

How safe is your deposit or current account with anIrish financial institution? Most of them aretechnically insolvent, to the extent that if the banks’and building societies’ property loan assets were

marked to market they would fall well short of theinstitutions’ liabilities. The good news is that at the momentdepositors are covered by no fewer than three governmentguarantee schemes, though from 30 September 2010 it’s adifferent story.

On 20 September 2008, at the height of the financialpanic, the government raised the statutory limit for theDeposit Guarantee Scheme (DGS) from €20,000 to€100,000 per depositor per institution. That didn’t calmnerves sufficiently and on 30 September 2008 financeminister Brian Lenihan announced the Credit Institutions(Financial Support) Scheme, or CIFS for short. That blanketguarantee scheme provided a state guarantee for alldeposits to the extent that they are not covered by the DGS.

The blanket CIFS guarantee expires on 29 September2010. Meanwhile the deposit guarantee scheme, whichguarantees sub-€100,000 deposits in banks, buildingsocieties and credit unions, was copper-fastened into law inJune 2009 with the enactment of the Financial Services(Deposit Guarantee Scheme) Act. The DGS does not havean end-date.

So what about cash balances in excess of €100,000 whichwill no longer be covered by the CIFS scheme from the endof this September? Enter the Credit Institutions (Eligible

Liabilities Guarantee) Scheme 2009, which commenced on 9 December 2009. The ELG scheme guarantees depositsincurred by participating institutions during the period from9/12/2009 up to 29/9/2010. Liabilities guaranteed under theELG scheme can have a maturity which extends beyond29/9/2010.

So if you agree a one-year term deposit today, the ELGwill guarantee the amount in excess of €100,000 after29/9/2010 until the term maturity. However on-demanddeposits, and current accounts, will only be covered by theELG until 29 September 2010. As the law stands now, afterthat date you’re on your own for amounts over €100,000.

It follows that businesses with large on-demandexposures, or term deposits that expire before 29/9/2010,to a single institution should consider spreading their riskbefore this September. Another point worth noting is that inthe event of an institution failing, depositors must first claimfrom the DGS (i.e. the first €100,000) and then claim anybalance from the CIFS or ELG schemes.

At the end of 2008, the amount put aside to cover claimsunder the DGS was €620m. That wouldn’t go very far if, forexample, Irish Nationwide went under (end 2008 customerdeposits: €6.8 billion). It’s also worth noting that under theDeposit Guarantee Scheme legislation, the Central Bank isnot obliged or required to fund any shortfall that may arisein the deposit protection fund.

After all that, what is the safest domestic home for yourmoney? Probably the Post Office or Prize Bonds.

From October,your cash inthe bank won’tbe as safe asyou might think

The Four D’s Model● Delete it● Do it● Defer it● Delegate it

Statistics show that of all the emailsreceived:50% can be deleted or filed30% can be delegated or completed within two minutes20% can be deferred

Delete ItWhy keep emails that have no use sitting in your inbox? A cluttered inbox can make it difficult to find important emails when you need them.

Do ItIf it can be done in two to three minutesthen why put it off?

Defer ItMove the email to your ‘Task List’ or calendar.

Delegate ItPass the email to someone who can deal with it immediately.

Q MarkThe Q Mark is the recognised Irish symbolthat guarantees Quality & Excellence.For further Q Mark tips: Log ontowww.qmark.ie / www.eiqa.comor contact the quality team on 01 660 4100.

*Sally McGhee, a recognised thoughtleader and innovator in the field ofproductivity management.

Love Your Inbox Again!The Q Mark is all about Quality.So, this year, how about makingsome ‘Quality’ time for yourself.How many times have youopened and closed the same email without properly dealingwith it?

Four D’s for Decision MakingThe Four D’s for Decision Makingmodel is a valuable tool to helpyou process your emails quicklyand efficiently, leaving you moretime to spend on anything frombusiness calls and paperwork to a‘time-out’ coffee or a refreshingwalk in the spring air.

Brian Lenihan: his blanket guarantee expires in September


INFRONT

Businesses mulling a new venture in 2010 should beaware of corporation tax relief for new startupcompanies. The relief, first announced in the Budget

in October 2008, applies to the profits of qualifying tradesand to the disposal of assets used for the purposes of thequalifying trade. The relief works by reducing thecorporation tax attributable to such profits to nil. Therelief only applies where the total amount of corporationtax payable does not exceed €40,000, with marginal reliefwhen corporation tax payable is between €40k and €60k.That limit is fairly generous. To be liable for corporationtax of €40,000 you'd first have to generate net profits of€320,000.According to Imelda Prendergast of accountancy firm

OSK, subject to meeting certain conditions the companywill qualify for the relief from corporation tax for a periodof three years beginning on the day the companycommences to carry on that qualifying trade. “Thismakes it important that this date be ascertained precisely,”said Prendergast. A qualifying trade means a trade whichis set up and commenced by a new company in 2009or 2010. A qualifying trade does not include anytrade that:� was previously carried on by another person and towhich the company has succeeded� the activities of which were previously carried on as partof another person's trade or profession� is an excepted trade (e.g. land developers, mining andpetroleum activities)� is providing professional services.“Before a company is incorporated and commences to

trade with the intention of availing of the tax relief,appropriate tax advice should be obtained to ensure thecompany is entitled to avail of the relief,” saidPrendergast.

If you can bear to look at them, now you can access yourSage company accounts using a Blackberry. Sage hasreleased Sage 50 Mobile, a Blackberry app that allows

users of Sage 50 Accounts 2010 to access key informationsuch as customer contact details and order history. Forexample, real-time information can be accessed duringcustomer meetings in order to provide accurate quotes andorder status. The app is available free of charge to all Sagecustomers with Sage 50 2010 and a support contract.

Ever searched for a domain name only to find it hasalready been snapped up? Then you search a slightlydifferent name, and the same thing happens. And on

and on. Now there's an easier way to find the URL youwant. Blacknight Internet Solutions has unveiledDropped.ie, which allows users to type in a single word andbe presented with a wide range of available domain namesthat not only contain that term but also related words.Blacknight managing director Michele Neylon said: “Oneof the biggest problems with getting your own addressonline is that so many domains are already registered,” saidNeylon. “You can waste hours looking for the right one.”Dropped.ie lists available dot coms and dot ie domains.

The Revenue Commissioners have clarified thecircumstances where they are prepared to cut businessessome slack over their tax payments. Says the Collector

General: “Some businesses experience cashflow difficultiesof a short-term nature that will prevent them from payingtheir tax debts on a timely basis but where the basic viabilityof the businesses is not in question. In other circumstances,the basic viability of a business will be an issue. Revenue isconscious that a ‘one size fits all’ approach to dealing withsuch difficulties is not appropriate, and so is quite preparedto engage with a business in working through the best

Tax lnfo And A FewOther Things Besides

INFRONT

approach that will bring matters to a satisfactory conclusionwith the minimum of delay. Where difficulties may be of amore long-term nature or where a short-term difficulty mayhave given rise to the accumulation of a significant debt toRevenue, then we will in appropriate circumstances considera request to accept payment of the debt by way of a phasedpayment arrangement over an agreed period of time.Agreement to such an arrangement is critically dependant ontimely engagement and will be an alternative tocommencement of enforcement measures by Revenue.However, all such phased payment arrangements will includeinterest.”

InterTrade Ireland has launched an initiative which aims tomatch SMEs with requirements in the civil security sector.InterTrade and partners are looking for 60 SMEs to

participate in two-day workshops. The organisation said ithas identified business opportunities in the civil securityspace such as communications, intelligent software, digitalmedia, architectural design, intelligent lighting and signagesystems, dangerous substances, access control/securitysystems, sensor detection and surveillance technology. Theworkshops will take place in Cork, Galway, Dublin andNewry. Details www.innovator.ie/workshops.

Capital Acquisitions Tax thresholds have been reduced for2010, in line with CPI deflation. The new Group A tax-free threshold for children of the disponer is €414,800.

The Group B threshold of €41,480 applies where thebeneficiary is a brother, sister, niece or nephew of the disponer.The Group C threshold of €20,740 applies in all other cases.

Moran Hotels and its sister company Bewleys Hotelshave come up with a bulk purchase discount forregular users of hotel bedrooms in Ireland and the

UK. The deal is you buy a book of ten vouchers which canbe used for a night's stay in any of the group's hotels at adiscounted rate. The price of the Bewleys books start at€500, with the chain promising savings of up to €20 off thelowest daily rate available. The Moran Hotels books arepriced from €600. Details from their websites.

One interesting innovation showcased at the recentMobile World Congress is a micropayment solutionfrom Absolu Telecom. The customer dials a

premium-rate phone number given on the mobile or webpage and the payment is charged to their phone bill. Absolusays the solution suits payment for articles, music downloadsand games. Details www.absolu-telecom.lu.

Conor Lenihan is Minister for Science, Technology & Innovation,with responsibility for Natural Resources and the Knowledge Society


OPINION

CONOR LENIHAN

the picture and visits with the accent on trade and investmentpromotion are being pushed. For ministers, these St Patrick'sDay visits are the opposite to the way they are depicted in themedia. They give ministers access at a very high level in keylocations around the world. The popularity of the celebrationgives an unrivalled opportunity to promote Ireland as adestination for trade, investment and tourism. Most othercountries and their ministers would give their right arm to havethe same annual opportunity as Ireland does.

The global Irish gathered at Farmleigh last year and insurveys since they have expressed their amazement at thenegative messages sent out in the Irish media around this event.Senior executives of global companies are struck at the contrastbetween their own view of Ireland's economic prospects andwhat they read in Irish newspapers. They consider therelentless negativity as unwholesome to the point of beinglachrymose.

Ireland's reputation took a battering through the financialcrisis and the parallel domestic property collapse. However nowinternational investors and commentators are marking a clearcontrast between Ireland and Greece, Portugal and Spain. Thefiscal correction that Ireland has undertaken is without parallelelsewhere in the Europe. The consequences of this harshmedicine has been a steep fall in support for the governmentparties in the opinion polls, though with slight signs ofimprovement in the latest surveys. 2010 will be a difficult yearas the fiscal adjustments kick in and unemployment continuesto be stubbornly high, despite the clear data that indicates thatan incipient economic recovery will take place towards the closeof the year.

Given the enormity of the challenges the country faces, it wassurreal to see the public debate dominated for over a week bythe departure of George Lee from Fine Gael and Deirdre deBurca from the Green Party. It may have made for great copybut neither of the departed Oireachtas members was, by anystretch of the imagination, a major figure in the politicalsystem. In fact the coverage highlighted the ephemeral side topublic discourse in Ireland, which is characterised by anemphasis on sterile personality issues over serious policyconsiderations.

Both Lee and de Burca complained essentially that their ‘star’roles in the soap opera of Irish politics were not sufficientlyrecognised. Neither individual has been identified withparticularly novel ideas for Ireland’s route map out of recession.However the pair have given a wake-up call to their former

parties. In the case of Fine Gael, Lee’s departure has givenadded impetus to a debate about the merits of Enda Kenny ascandidate for the position of Taoiseach. The musingssurrounding the Fine Gael leader had already commenced longbefore Lee threw his toys out of the pram. In fact a certaindesperation about Enda Kenny is evident among members ofthe commentariat who are appalled at the prospect of FiannaFáil returning to government after the next general election.

The focus on Kenny's leadership qualities distracts from theawkward cracks that exist within Fine Gael, and between FineGael and Labour, with regard to their solutions as to how

Ireland can recoverfrom recession. FineGael and Labourhave opposing viewsas to the future rolethe public sector willplay in the economy.Fine Gael itself isdivided on this issue,with former leadersAlan Dukes andGarret FitzGerald,as well as GeorgeLee of course,expressing

reservations about official party policy. The dilemma for FineGael is that dumping the leader could conceivably make thepolicies even more confused than they already are, given thatthe frontrunner to replace Kenny is Richard Bruton, thearchitect of the party’s current policies.

Irish politics is headed for significant change, not leastbecause of the recession, but more so because politics is goingto refocus over the next two years on what parties are doing forthe individual citizen with regard to the economy. Irish votershave tasted the good years and are determined to get back to asclose as they can get to the years of plenty. People recognisethis journey will involve pain and are prepared to jettison theculture of affluence and celebrity that accompanied the boomyears. The lesson from George Lee's brief sojourn in LeinsterHouse is that the celebrity aura spawned by the boom iswearing off fast.

The St Patrick's Day exodus of ministers to far flung parts of the globe is upon us again. Last year, in deference to themood of the country, Taoiseach Brian Cowen curtailed theeffort. Journeys and destinations were pared back to the

bare essentials. This year a certain renewed confidence has entered

Fine Gael andLabour haveopposing views onthe future role ofthe public sector in the economy

Surreal Public Debate


ECONOMY

The government had to borrow €780m through January(€30m more than a year earlier) to keep the show onthe road, despite sterling efforts at reducing public

expenditure. Departmental current and capital expenditurewas down €610m year-on-year, which wasn’t bad goingconsidering that social welfare spend was up €130m whilethere was also a €170m hike in grant payments to farmersin January. (The farmer payout was counterbalanced by a€250m year-on-year boost in FEOGA payments fromBrussels.) However all the good work on the spending sidewas cancelled out by €660m slippage in tax receipts, anannual shrinkage of 18%. Worryingly for the Exchequer,VAT receipts plunged by €350m year-on-year. There wasalso the small issue of higher interest payments on thenational debt, which increased €200m. The bottom line isthat the national debt increased by €25m a day through thefirst month of the year.

Christmas appears to have brought little cheer tobeleaguered retailers, who are dropping like flies at themoment. Core retail sales (i.e. excluding cars) in

December were down 0.9% in volume on the previousmonth, with the 1.5% decline in the value reading evidenceof deflation. That was the sixth straight drop in the value ofsales and the 14th decline in the past 15 months. The trendisn’t encouraging. In Q4 2009, sales volumes dropped 1.5%quarter-on-quarter following growth of 0.2% in Q3. SaysDavy economist Rossa White: “The data provides enoughevidence to suggest that the economy overall did not bottomat the end of 2009.” And that will be very apparent when theJanuary data is published in March. Thanks to the bigfreeze, those numbers will be horrendous.

December retail sales volumes were down 6.7% year-on-year. When one recalls the panic that gripped consumers inDecember 2008, that drop is a stark measure of howdisposable income in the economy has tightened. Newspending on credit cards in December was 15% less than ayear earlier and credit card repayments now exceed newspending. Private sector credit fell almost €1.2bn year-on-year in December. This followed falls of €2.3bn and €2.5bnin October and November. White notes that prices arebeing slashed by most retailers and he predicts that the valueof sales may keep slipping for a couple of quarters yet. From

the peak, retail sales volumes are down by 13% while thevalue of retail sales has fallen by 19% in the past two years.

Tax revenue figures suggest the Central Statistics Officeretail sales data may underestimate the extent of the retailcarnage. Exchequer VAT receipts for November andDecember, reported in January, were down 18% year-on-year. Still, people didn’t stop drinking at Christmas and barsenjoyed a 2.5% volume lift from November. Publicans havegenerally held the line on prices better than most retailers,evidenced by the fact that though sales volumes inDecember declined 8% year-on-year, the turnover slippagewas limited to 2%.

What level of borrowing is the average first-time buyerincurring to get on the property ladder? The averageFTB mortgage loan through the second half of 2009

was €207,000, a figure that has remained relatively stablesince this time last year - despite falling property prices. Theread-through from finance house Davy is that that activityin the FTB space “is among a higher income bracket”. Theextent to which builders and estate agents have beenwhacked by the recession is revealed in data which showsthat 60% fewer mortgages were issued in 2009 than in theprevious year. The buy-to-let and remortgage segmentsrecorded the greatest falls, down 77% and 73% respectively.The mover and top-up segments fell by 54% and 58%.Total mortgage repayments of €8.5bn were down from€15bn in 2008. Notes Davy: “This is indicative ofsignificant loan restructuring as the banks are committed toshowing forbearance.” That’s another way of saying that forthousands of borrowers the day of reckoning has beenpostponed.

NCB’s January PMI for the services sector was 44.4,miles below the no-change mark of 50 and the worstreading since last July. New export business slipped to

50.4 from readings between 52.7 and 54.7 in the previousfour months. However business managers are looking on thebright side. In the PMI survey, optimism was strong inJanuary, having increased to its highest since March 2008.Positive sentiment has now been recorded in each of thepast nine months. The strongest positivity was at tech

Monthly Insight IntoThe Irish Economy

ECONOMY

companies, where optimism improved to its highest level in20 months. Meanwhile, KBC/ESRI’s consumer sentimentindex for January jumped to its highest level for two years.KBC’s Austin Hughes said: “The scale of improvement inconsumer sentiment looks too good to be true - and itprobably is. But it seems clear that the mood of consumers isbrightening. The survey is pointing to a clear and broadlybased pick-up in confidence.”

Some car dealers report a bit more action in theshowrooms and new car registrations in Januaryadvanced 5% year-on-year to 16,610 units. To put that

figure in perspective, the total is down 65% from January2008. Dealers were hoping for more of a fillip from thescrappage scheme, according to Shane Teskey, director ofMotorcheck.ie. “The manufacturers’ strategy of heavily

discounting new car prices has generated significant interestamong buyers but the finance famine currently beingexperienced by new car dealers is suffocating sales,” he said.The euro’s softening against sterling has impacted cross-border imports, with the number of used cars beingimported to Ireland through January down 47% year-on-year. Leading the car market in January was Ford, with itsFiesta and Focus models the bestsellers. Diesel modelsaccounted for 60% of new vehicles registered.

County enterprise boards are a good conduit to samplethe views of micro businesses about the availability orotherwise of bank credit. In a recent survey of 690

firms, four out of ten respondents reported that creditavailability is more difficulty than six months ago, while thebalance felt that conditions are the same. Three out of tenmicro firms who responded said that their business is at riskof closure. Time is really running out for tiny firms with twoor three employees: 60% of them are mulling a redundancybefore the autumn. How much would it take to get thesecompanies out of jail? A minimum of €15,000 in workingcapital was the favoured response.

A sample comment: “My bank is unwilling to restructurecurrent debt or provide any additional working capital eventhough the level of security currently held by the bank farexceeds the amount of monies borrowed. No other lendersare willing to look at the proposal as they say they are lookingafter their own”. In a recent speech to chartered accountants,Pat Farrell, chief executive of the Irish Banking Federation,

40

50

60

70

80

90

100

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Increasing optimism

Increasing pessimism

50 = no change on current levels in 12 months’ time Source: NCB

Business expectations: all services

continued on page 18


ECONOMY

said that in the nine-month periodto last September there was adecline of 23% in applicationsfrom SMEs for credit. Farrell saidthree-quarters of these applicationswere approved. He added: “Creditwill never be as cheap again. Alongwith requirements on the banks tohold more capital, this will impacton how we live in the years ahead.”

How much progress did Irelandmake in the noughties interms of expanding

employment for the country’spopulation? In 1999, 1,520,000people were categorised as havingsome sort of job. Ten years laterthis total had risen to 1,870,000 - an increase of 350,000. This indicates that all the gains of the Celtic Tiger yearshaven’t yet been dissipated by the recession and is the reasonwhy there is still plenty of advertising for services such asutilities, telecoms and insurance. But of course due toimmigration and other factors such as higher femaleparticipation, the labour force - the number of peopleavailable for work - expanded in the past decade too, by530,000 in fact. The result is that the proportion of the labourforce in employment at the end of the decade was onlymarginally higher than at the start. One notable trend of thenoughties is that the number of retired people increased by24%, resulting in a steep hike in the state pensions burdenthat is funded by people who are still in employment.

Manufacturing output in Ireland overall fell by 1.8% in2009 but turnover declined by 11%. IBEC economistReetta Suonper observed: “This highlights the price

pressures that companies in the manufacturing sector face and emphasises the need urgent need to reduce the cost ofdoing business in Ireland. The indigenous sector in particular isin need of targeted, temporary stimulus measures in order to overcome this exceptional global crisis.” Through 2009, the ‘Modern’ sector (mostly chemicals) posted an averageannual increase of 5.8%. However, the ‘Traditional’ sector,which is more dependent on exports to the UK, showed a bigdecline of 14.3% over the same period. Economists are hopefulthat the weakening of the euro against sterling will bring somerelief this year to indigenous manufacturers.

(000) 1999 2009

Economic status Men Women Men WomenTotal in labour force 1,012 635 1,249 930At work 923 599 1,022 850Unemployed 90 3 227 79% in labour force 71 43 77 52

Total not in labour force 422 847 488 857Student 170 183 175 185Looking after home/family 9 570 7 532Retired 186 62 225 87Other 57 32 82 53% not in labour force 29 57 28 48

Source: CSO QNHS

Noughties Employment Scorecard

19Business Plus March 2010

ECONOMY

● Economic growth in the eurozone hasslowed to a crawl. Gross DomesticProduct in the 16-nation region duringQ4 2009 increased 0.1% over Q3, whenthe gain was 0.4%. The Germangovernment expects its economy to growby 1.4% in 2010. The Italian economyshrank by 0.2% in Q4 after expanding by0.6% in Q3. GDP growth in France was0.6% and in the UK it was 0.1%. ECBpresident Jean-Claude Trichet said: “Theeuro area economy is expected to growonly at a moderate pace in 2010, and therecovery process could be uneven.”

● The weak performance of the eurozoneeconomy is one of the factors weighingon the value of the euro, which has beenon a slide against most world currenciessince last November. Bank of Irelandeconomist Dan McLaughlin is forecastinga euro/dollar exchange rate of $1.35-$1.40 by the end of March and he expectslast year's low of 84p sterling to berevisited. The currency trends are a boostfor Ireland's tourism sector, retailers andexporters. The trend will discourage tripsby Irish people outside the eurozone andmay spark inflationary pressures later inthe year.● The International Monetary Fund hasforecast 2010 economic growth of 10%and 8% in China and India respectively,compared with 1.6% expansion in theeurozone and 2.4% in the US. The IMFsees the global economy overallexpanding by 4% in 2010.● China's GDP climbed 11% year-on-year in Q4 2009, the fastest pace in twoyears. One result has been a surge inimports, with an annual increase of 56%

in December and 86% in January.Monetary authorities in Beijing have nowmoved to curb bank lending.● As Ireland national debt zooms towards80% of GDP, spare a thought for Japan,which has not run a primary balancesurplus since 1992. Deficits since thenhave averaged over 5% of GDP eachyear. This has led to gross governmentdebt ballooning to an estimated 220% ofGDP from 70% twenty years ago. Japanwill have to use 20% of its total budgetthis year just to service existing debt.Economists say the size of the Japaneseeconomy has ensured that it is still able toraise funds. However rating agencies arestarting to get nervous and Standard &Poor's cut the outlook for Japan'ssovereign credit rating last month.● Manufacturing activity around theworld increased sharply in January,bolstering hopes of a strong globalrecovery. In the US, the Institute forSupply Management index rose from 54.9to 58.4, its highest level since August2004. China reported record industrialactivity for the month while thepurchasing managers’ indices in India,South Korea and Taiwan also rosestrongly. In the eurozone, themanufacturing PMI rose to 52.4 from51.6 at the end of 2009. Industrial growthwas led by France, where manufacturingexpanded at the fastest pace in almost adecade. Germany and Italy were alsostrong, as was the UK, where weakersterling helped manufacturing activityincrease to a 15-year high. ● Britain is Ireland’s second largest exportmarket behind the US, accounting for14% of exports. Within the EU, Britainreceives 24% of exports from Ireland andis the most important export market forindigenous firms. Exports to Britaindeclined 16% through 2009 so a recoveryin the UK economy is vital for pullingIreland out of recession. However itseems there will be no quick fix fromacross the Irish Sea. The IMF predictsthat UK economic growth will be in theregion of 1% in 2010. Recent Bank ofEngland data shows that UK bank andbuilding society lending to UK businessrose in November for the first time sinceJanuary 2009.

Global Indicators

0

1

2

3

4

5

6

7

8

Dec2002

Dec2003

Dec2004

Dec2005

Dec2006

Dec2007

Dec2008

€billionImports v Exports

Exports

Imports

Dec2009

Ireland’s External Trade

Sovereign Debt issues, particularlyin Greece, have been the mainfocus of FX markets in 2010.

Greece now has a total debt of €254bnwhich is 124% of GDP. They will need tofinance another €64bn this year ofwhich €30bn is due for roll over inApril/May. It is increasingly unlikely thatthey can raise this money without someform of bailout.

In a previous time, a country in thissituation would have allowed itscurrency to devalue, making it morecompetitive. However, this option isclosed due to membership of the euro.The worry now is that lack ofconfidence in Greece will spread toother countries. Italy with a Debt/GDPrate of 115%, Spain with anunemployment rate of 19.5%, Irelandand Portugal with budget deficits of10.8% and 9.3% respectively of GDP,have all come under the spotlight.

We saw how contagion in the bankingsector snowballed to the point wherebanks would not lend to banks. Manyargue that bank bailouts and aggressivestimulus packages have just moved theproblem of bank debt to one ofsovereign debt, and confidence in thismarket could fall away just as quickly.While the current focus is on theEuropean ‘PIIGS’ and whether the europroject can survive a systemic shock ofa Greek default, it should be noted thatthese Sovereign Debt problems are notconfined to Europe.

The UK is currently running a budgetdeficit of over 12% of GDP, Britain’sAAA rating is under threat and themarket is dismayed with the lack of anyconcrete plan to cut expenditure. Theprospect of a hung parliament in thegeneral election also frightens themarket, as it is anticipated a coalitiongovernment will find it difficult to makethe necessary tough decisions onexpenditure.

The United States also has a mountingdebt problem. The gross federal debt isexpected to exceed 100% of GDP injust two years time. A weakened GBP orUSD could be the long-term solutionfor the UK and US, but short term alleyes will be on the sustainability of theeuro project.

Investec(01) 421 0091

www.investec.ieInvestec Ireland Limited is authorised by the Irish Financial Services

Regulatory Authority. The information provided should not beconstrued as advice.

CURRENCY OUTLOOKCommentary by Mark O’Brien,

Investec Bank

Ireland’s LargestCorporate Sporting Event

The Irish National Hunt Racing FestivalTuesday 20th – Saturday 24th April 2010

100,000 to descend on Punchestown for the 2010 IrishNational Hunt Racing FestivalTuesday 20th – Saturday 24th April 2010

Businesses get a ten fold return on investment. Withover 200 national and international journalists andcamera crews present, the Irish National Hunt Racing

Festival at Punchestown is a guaranteed stepping stone tomedia gold-dust for your business in 2010.

Fifteen hours of live RTÉ coverage ensured that 1.4 millionviewers watched Festival proceedings over the course of thefive days in 2009. The Punchestown Festival was the top viewedrace-meeting on RTÉ in 2009. The festival is also featured in allmedia programmes from news and current affairs to fashionand celebrity gossip.

All national and regional radio stations carry a selection offestival elements on air from pre-promotion to race-day previews, interviews, commentaries and results. Extensive coverage across all national press titles is standard and it focuses all elements of the entire festival experience prior to,during and after the festival.

All companies need to justify the return on their marketing investments for 2010. As part of the evaluation rolled out to allour sponsors, we provide an in-depth media analysis. Last year,for every €1 invested in sponsorship, businesses received an€8 to €12 return in media value, with the average return on investment coming in ten fold. This figure highlights why somany diverse companies find Punchestown a great place to dobusiness.

It’s not the size of your budget that matters, it’s how you use itWhen business people think of sponsorship, they presume it isa marketing activity only undertaken by blue chip companies.This is quite simply a myth. Whether your sponsorship budgetis €5,000 or €200,000, we can tailor a sponsorship package tosuit your requirements, enabling you to reach your target audience with your key messages in a creative way.

Punchestown Festival sponsors vary in company size, sectorand investment. Sponsors come to us with their own set of goalswhich they wish to fulfil. This can vary from race sponsorshipwith guaranteed brand exposure and on-site advertising, toticket promotions and hospitality where they can entertain potential clients and reward existing customers.

When customising a sponsorship investment package, wetake pride in our ability to understand your business requirements. At Punchestown, regardless of sector or budget,size doesn’t matter, as long as you are with us you are on a winning team.

Top Tips To Make A Sponsorship Work

● Build Brand AwarenessOn-course and Parade Ring signage captures the attention of the festival racegoers and the millionswatching at home. Your branding will also be incorporated into the Punchestown website with a linkto your website to further promote your brand awareness and online traffic.

● Reward Your Existing Customers To Retain Them Entertaining clients in any of our various hospitalityvenues can be a great way to conduct some businesswithin a social scene with a great atmosphere. Ticketpromotions are also popular with many of our spon-sors, who use them to reward loyal customers, creatinga brand experience like no other.

● Recruit New CustomersAll sponsors receive race card advertising, signage,sampling and promotional opportunities as part oftheir package. Punchestown racegoers are potentialcustomers of almost every business. They have moneyto spend and are not afraid to enjoy themselves. So whynot target them through the festival?

● Sell More ProductDirect selling, exhibiting and sampling are popularmarketing activities conducted by some sponsors on-site. In addition sponsors can use the Punchestownwebsite to gain click-throughs for increased web sales.

● Save MoneyFor 2010 we are all conscious of the return value on our marketing investments, and with 8-12 fold returnon sponsorship investments at Punchestown, it makesus exceptionally attractive to marketing managers.

“It is not the strongest of the species that survives, northe most intelligent that survives. It is the one that ismost adaptable to change” (Charles Darwin 1809-1882)

For information on sponsorship, marketing, promo-tions and hospitality opportunities,

contact Liam Holton. Tel: 045 897 704 Email: [email protected]

Web: www.punchestown.com

The Punchestown Festival is Ireland’sBiggest Party with 16,000 corporate

guests in attendance last year.


SHARES

Ryanair is back in favour with Dublin brokers and ifinvestors share the analysts’ enthusiasm then theshare price could push on from the recent 350clevel. The airline’s stock reached that altitude last

September before embarking on a bumpy descent to280c before Christmas. The share started to climb back inmid-December and now the consensus in Dublin’sbroking community is that the share could take flight to420c or 430c.

Ryanair is guiding net profit of around €280m in its fullyear to March 2010, which gives the airline a lofty forwardp/e rating of 19. For the quarter ending December 31, theairline posted a net loss of E11m, a big improvement on the€119m loss posted a year earlier. That was entirely due to a€207m boost from cheaper fuel. Passenger numbers in thequarter advanced by 14% to 16 million and the load factorwas 82%. But to fill its jets, Ryanair had to slash ticketprices, and revenue per passenger, including extras,declined 11% to €38, an all-time low for that quarter.

A comparison with peer airline Easyjet is instructivebecause it illustrates the shortcomings of chief executiveMichael O’Leary’s business model.The common perception amongconsumers is that Ryanair treatspassengers like cattle and that’s nota perception the airline doesanything to counter. O’Leary’sattitude is that the customer getswhat he or she pays for, and thelower he has to drive down fares tomaintain load factors, the less likelythat attitude is to change.

Easyjet doesn’t have the same

image problem and as a result it can charge higher faresthan its rival. In the October to December 2009 quarter,Easyjet carried five million fewer passengers than Ryanair, at11 million. However average revenue per passenger was€62, which is two-thirds more than Ryanair managed.Because of this, Easyjet’s revenues for the quarter came inat €700m compared with €612m at its Irish rival.

In terms of stock market performance, Easyjet startedto pull away from Ryanair last summer, and at the current£4 level Easyjet trades on a forward p/e of 14. So whydoes the market afford Ryanair a premium? Though yieldsare declining at the moment, analyst Eamonn Hughes atGoodbody expects that “leverage to the rising yieldenvironment kicks into the estimates in earnest in 2012and 2013”. On that hopeful basis, Goodbody’s revisedshare price target is 470c. Analyst Edward Keating atDolmen also expects Ryanair’s average fare to grow“strongly” over the coming years and he has a pricetarget of 430c. House broker Davy sees “fair value” at450c.

O’Leary will do well to meet those expectations. In thecurrent financial year ending March2010, Ryanair’s fleet will have grownfrom 181 to 232 aircraft. Forty moreBoeings are coming down the trackin the year to March 2011 with 22more due in 2011/12. That’s a 60%increase in capacity in three years inthe middle of a Europe-widerecession.

Shares analysis: Nick Mulcahy,Graeme McQueen, John Cradden

Dublin brokerslike Ryanair but investorsfancy Easyjetas a better bet

RYANAIR v. EASYJET

Ryanair EasyjetPassengers 16m 11mRevenue €612m €675mRevenue per passenger €38 €62Load factor 82% 86%Forward p/e 19 14Share 1 Year +9% +36%

Figures relate to Oct-Dec 2009


SHARES

Fighting talk from Anne Heraty, chief executive ofrecruitment group CPL Resources plc and the onlywoman to have ever won Ernst & Young’sEntrepreneur of the Year award in Ireland. Unveiling

her company’s interim results, Heraty declared: “We areone of the most operationally efficient and financiallydisciplined companies in our industry, remaining profitabledespite the harshest of economic environments.”

Heraty’s bullish tone impressed NCB analyst CiaranCallaghan. Writing that the CPL share is a “bargain” at the220c level, Callaghan explained: “Excluding CPL’s cash of€42m (113c per share), the stock trades on just five timesour FY 2011 recovery earnings. We reiterate our buyrecommendation and move our price target to €3.”

The recession has wreaked havoc with CPL’s profits. Thegroup’s financial year-end is June and in 2008 the net profitwas €18m. The following year the surplus reduced tounder €1m and in the current year, 2009/10, brokers areexpecting net earnings of around €4m. That would equateto earnings per share of 11c. With the share price at the240c level recently, the forward p/e is 22, though strip outCPL’s cash pile and the forward p/e is 12.

CPL’s interim results did show signs of stabilisation.Turnover in the second half of calendar 2009 was down just2% on the preceding six months, though the slippage atthe operating profit level was 44%. Excluding interestincome, the net profit in CPL’s interim period to December2009 was €1.7m, a margin of under2%. That’s a big drop from the 3.2%margin achieved in the preceding sixmonths and shows that CPL is not outof the woods yet.

The investment thesis from housebroker Davy is that “CPL’s resilienceand adaptation to the changingenvironment, coupled with the

protection of its robust balance sheet, will allow it toemerge from the current downturn having strengthened itsmarket-leading position, highly leveraged to an eventualupturn”. The brokers add: “The stock offers investors afantastic opportunity over the longer term with the bonusof the cash pile to provide a solid downside valuation base.We reiterate our ‘outperform’ rating.”

But when is this “eventual upturn” going to happen? Notthis year anyway, cautions CPL chairman John Hennessy.“We do not anticipate any significant expansion orretraction in demand for our services in the short term,” hesays. And even if the economy does bottom out, NCB’sCallaghan notes: “While volume levels have picked up,margins are coming under pressure due to aggressive

competition. Employers still appearreluctant to engage in permanentcontracts, with this trend likely to persistuntil economic growth returns.”

CPL’s latest numbers provide somecheer for economists seeking to divinea trough to Ireland’s economic slump.For shareholders though, there is lesscause for optimism.

Can the good times return for CPL?

CPL Calendar 2009

€000 H2 H1Revenue 91,378 93,453Cost of sales (78,420) (78,982)Gross profit 12,958 14,471Admin expenses (10,514) (10,865)Operating profit 1,682 3,013

Anne Heraty: “efficient and disciplined”

Business Training & DevelopmentCustomised Coaching Services and Business Development Programmes for Business Owners, Company Directors and Senior ManagementOver 30 Years Experience with a Proven Track Record

No. 2, Block A2, The Cubes, Beacon South Quarter, Sandyford, Dublin 18 Tel: 01 293 9900


hen Apple chief executive Steve Jobsunveiled the company’s new iPad recently,

the announcement was lapped up by mediaall over the world. Few if any global

corporations can generate the level of hype that Applecan, and the California company’s publicity machine worksbecause millions of consumers are very favourablydisposed to the company’s lifestyle electronics products.The iPhone is currently being adopted by consumers atthe rate of 670,000 units per week, while the iPod is stillgoing strong too, shifting 1.6 million units weekly in thefinal quarter of 2009.

The success of the iPhone has been startling and in thefirst quarter of Apple’s fiscal year, iPhone revenuesexceeded by a wide margin revenues from the company’soriginal offering of desktop computers and laptops. iPhonehas come into its own just in time for Apple, as iPod andiTunes revenues are running out of steam. Now Jobs hopeshe has another game changer with iPad, a device designedto bridge the gap between smart phones and laptops. Thetablet computer is the width of a magazine and has a 9.7-inch touch screen. It can surf the web, play movies, gamesand music and run a gamut ofapplications. It also has a built-inbook reader like the Amazon Kindle.What it can’t do is make phone callsand or video Skype calls.

To date, tablet computers haven’treally caught on. That is sure tochange when the iPad goes on salearound May, with teenagers inparticular likely to be among themost eager early adopters. Apple’s

MacBook is the laptop of choice for teens but the iPad willbe half the price with much the same functionality, once youbuy an external keyboard to complement the virtualembedded typing facility. The indicative pricing for iPad is€370 to €500, depending on memory size.

For adults, the iPad will also surely impact the currentmarket for netbooks, the sub-€300 laptops. The iPad’sscreen is twice the size of a standard netbook and that’ssure to appeal to bedtime surfers. The one caveat will beusability of the virtual keyboard. Apple talks of an initialannual sales objective for iPad of between two and fivemillion units, compared to eight million for Apple’s currentlaptop range. It seems certain that iPad will cannibalisesales of MacBooks so Apple is obviously very confident thatwithin a few years iPad will deliver far more sales than itscurrent laptop range.

Apple’s share price appreciated by 120% through 2009. Inits year ending September 2009, Apple’s turnover grew by12% and net profit improved by 18%. The strong share

price performance last year was abounce back to previous highs: the2009 year-end share price was thesame as two years earlier. At the$195 level at the moment, Apple’sshares trade on a trailing p/e of 30,though the forward p/e is around21. With the dollar appreciatingagainst the euro, if you think theiPad will be a hit then now is thetime to buy.

iPad will behuge if Applecan duplicateits iPhonesuccess story

Apple’s iPhone Surge

$m Q1 2010 Q1 2009 ChangeiPhone 5,578 2,240 90%Computers 4,450 3,565 25%iPod 3,391 3,371 1%iTunes 1,164 1,011 15%Other 1,100 993 11%Total 15,680 11,880 32%

Three months to 26/12/09 26/12/08

W

SHARES


SHARES

One of the key metrics to examine whenconsidering a share purchase is the company’sprofit margins. The higher the margins, themore compelling the buy. For 2009, Google’s

operating profit margin was 35% and its net margin (aftertaxes) was 28%. Most Irish SMEs, in fact most companiesanywhere, would kill for this level of margin. What themargins show is that Google has enormous pricing powerin its market and this power flows from the company’sdominance of global paid search spend.

It’s no secret that a lot moreadvertising spend has been migratingonline and Google is the main moverbehind that shift. Display advertising onwebsites is sizeable and a growingmarket too, but especially for smallbusinesses search advertising is whereit’s at. Or at least that’s what many smallbusinesses are currently thinking. Butwhen they see the sort of marginGoogle operates on, they may wonder are they reallygetting good value for their advertising buck, or are the‘do no evil’ guys ripping them off?

Google’s revenues increased by 9% last year to $23.7bn,a creditable performance in the gale of the recession but

not quite up to the stellar growth of former years. That’swhy the share’s p/e rating has been marked down byinvestors from 70 three years ago to about 26 today. Onelooming issue for Google is the growing popularity of socialnetworks like Facebook and Linkedin. As these networksget their advertising act together, and their defineddemographic subsets grow, advertisers are going to have atargeted alternative to Google.

Recently Google recognised this threat by announcingthe launch of Google Buzz, whichallows users to quickly sharemessages, web links and photoswithin Gmail. Though Gmail has 177million unique visitors, it trailsMicrosoft’s Hotmail (370 million) andYahoo Mail (300 million). Orkut,Google’s previous stab at socialnetworking, launched in 2004, floppedin most markets and Buzz faces anuphill battle now. It seems that Buzz’s

privacy settings aren’t what they might be. The Googleshare peaked at $740 in late 2007, plunged to $300 inNovember 2008 and was recently trading at the $540level. The share price plunged 13% in the January marketsell-off and now Apple has a larger market cap.

Proof that Google ads are expensive

Google’s Fat Margins

$m 2009 2008Turnover 23,650 21,795Operating expenses (15,338) (15,163)Operating profit 8,312 6,632Taxes 1,860 1,626Net profit 6,520 4,226

Year to December 31


Source’s Daly Favours Property Over StocksPension investors should considerswitching their investments from cashback into the property market. That’s theopinion of Adrian Daly, who heads upSource, a pension management company.Daly said the switch should be considereddue to the increasingly attractive values inthe marketplace. Source allows membersof defined contribution schemes to choosefrom more than 140 different investmentfunds, managed by ten different fundmanagers.

According to Daly: “Having essentiallyhalved in value in the past two years, agreat deal of bad news is now alreadypriced into property. While there areuncertainties facing the property marketin the form of a weak economy and thepoor banking environment, rental yieldshave now reached historically high levels.Current yields of 7.5% can sustainsignificant erosion of rental income andstill compare very well with other assetclasses.”

Source has decided to switch its currentcash allocation of 10% into Irish propertyassets through the Irish Property UnitTrust (IPUT). Daly added: “We believethat this is a sensible and prudent shift inassets given the likely uncertainty inequity markets in the coming months.Obviously funds with a higher equityallocation benefited last year from therecovery in stock markets. But we believethat the global recovery in 2010 is likelyto be uneven and that reflects our cautionover equities over the next 12 months.For cautious pension investors, an assetallocation high in index-linked bonds ismore advisable.”

IPUT facilitates self-administeredpension funds, charities and other taxexempt funds to invest in direct propertyon a co-operative basis. IPUT has a

membership of 110 underlying unitholders, including fund managers and big pension schemes. The trust has aportfolio of 50 commercial properties,mostly freehold, located in Dublin andCork, with a value of €486m at the end ofSeptember 2009. Latest performancedata for IPUT shows a negative return of16% through the first three quarters of2009, with the one-year performancedown 35%. Over ten years, IPUT claimsannualised growth of 4%.

IPUT isn’t the only option forinvestors who believe the Nama processwill put a floor under commercialproperty values. For instance the F&CIrish Commercial Property Fund fromFriends First has a portfolio of 25properties currently valued at €154m.The fund’s value declined by 29%through 2009 but even with that hit overthe past 15 years the fund has returned8% per annum.

China A BetterBet Than Japan?China’s GDP surged by 9% last year andthough its stock markets have beenbattered in recent weeks, economicgrowth prospects are a lot morefavourable than in Europe or the US.However be prepared for volatility ifyou’re buying into the China story.Standard Life’s small China Equity fund,launched in December 2007, posted again of 60% in the 12 months to mid-February 2010. But the fund is still down21% in value since launch.

Quinn Life’s China Freeway fundtracks the performance of the FTSE/Xinhua China 25 Index. This indexconsists of 25 of the largest Chinese redchip and H share companies (shares ofcompanies incorporated in mainlandChina that are traded on the Hong KongStock Exchange). In the year to January

2010, the fund posted growth of 44%,while three-year annualised growth is amore subdued 7%.

Robeco launched its Chinese Equityfund in June 2004 and has €590m inassets. Investors who got in at launchhave seen a decent return for theirinvestment, with the fund showing anannualised return over five years of 18%.The fund’s performance was boosted by astrong 2009, with growth of 70% wipingout disappointing losses of 47% in 2008.

How does that compare to Japanesefunds, which used to be favoured by Irishinvestment managers when they soughtFar East action. Standard Life’s JapaneseEquity fund grew by 9% in the year to February 2010 and since launch inJanuary 2005 the fund is down 14%.Quinn Life’s Japan Freeway has alsoendured a disappointing few years. Thefund, which tracks the MSCI JapanIndex, delivered growth of 1% through2009 and is currently showing a threeyear return of -37%.

GRAEME MCQUEEN

Shanghai Stock Exchange

Friends First Life Assurance Company Limited is regulated by the Financial Regulator.

Take a closer look...With a return of 8.37%* p.a. since launch (March 2001), the Friends First Insight Currency Fund is worth a second glance. Ask your broker for more details.

* Source: Friends First, 1st Feb. 2010.

Warning: Past performance is not a reliable guide to future performance.Warning: The value of your investment may go down as well as up.Warning: Funds may be affected by changes in currency exchange rates.

Having undergone an extensiverenovation in 2007, the 3 star DublinSkylon hotel offers excellent 3 star

hotel accommodation in Drumcondra, whileboasting 126 rooms, six modern meetingrooms, and secure car parking. The hotel isideally located between Dublin City Centreand Dublin Airport.

The Drumcondra hotel is superbly located inrelation to the many event venues in Dublin,close to Croke Park for GAA/rugby andsoccer events, within walking distance toO'Connell Street, The Helix Theatre, ClontarfGolf Club,Beaumont Hospital, Mater Hospitaland Dublin City University. The O2 concertvenue is roughly ten minutes in a taxi fromthe hotel in Dublin but the hotel has ashuttle bus that will bring its guests directlyto the venue. The O2 venue has some greatupcoming Dublin concerts.

The Dublin Skylon conference hotel is part ofthe Brian McEniff hotels group that hasrecently joined the Best Western chain, thelargest group of independently owned andoperated hotels worldwide, with over 4,100members in more than 80 countries. TheDublin Skylon offers luxurious and spaciousexecutive meeting facilities at affordableprices, with exceptional service. Thesecomfortable meeting rooms in Dublin areperfectly suited to any business requirementsand the hotel’s proximity to Dublin CityCentre, Dublin Airport and Croke Park makesit one of the most suitable and convenientconference facilities in North Dublin.

For a major conference or a small meeting,exhibition or product launch or private partythe Dublin Skylon conference hotel Dublincan provide you with the full package.

Whether it’s an ExecutiveBoard Meeting or a Privatemeeting for eight or aconvention for 90 people, thehotel’s meeting and eventprofessionals will meet yourbespoke requirements.


® COMPANY PROFILE: Dublin Skylon Hotel

An Ideal LocationThe Dublin Skylon Hotel is the perfect choice for bothbusiness and leisure visitors alike

For further information visit www.dublinskylonhotel.com or phone (01) 884 3900.


Office space in Georgian Dublin hasbeen hammered by the recession.All around Fitzwilliam Square andin adjoining streets, the For Rent

boards compete for lettors’ attention.The going rate of €32 per square foot acouple of years ago has tumbled toaround €20, and long leases are a thingof the past.

Estate agent CB Richard Ellis says thatDublin office letting activity in Q4 2009was focussed on the city centre, whichaccounted for 65% of take-up. Totallettings of 78,000 square metres wereconcluded in the Dublin market during2009, equating to around half of averageannual take-up in Dublin over the pastdecade. The overall vacancy rate inDublin now stands at 23%, which CBREestimates at over 820,000 sq m. Anestimated 267,000 sq m of this vacantspace is in Dublin 2/4, with the vacancyrate in the area standing at 17%.

According to CBRE: “There is asignificant amount of older accommoda-tion being brought to market, especiallyin the city centre, by occupiers seekingto sub-let excess accommodation inorder to generate income. As a result,

much of the vacancy comprises floors ina large number of buildings as opposedto a large number of unoccupiedbuildings.”

Of course rents are only one factor toaccount for with Georgian office space.City council rates in the area are sizeableand insurance costs can be steep too.Then there’s the heating factor, not tomention the absence of lifts in the vastmajority of buildings located onFitzwilliam Square and Merrion Square.

One response to these challenges is toconvert a Georgian building, or two, toserviced offices. This is what has beendone at adjoining buildings 31 and 32Fitzwilliam Square, which styles itself asPavilion House. The buildings havebeen merged together to come up with aconfiguration of 23 rooms over fourfloors with another ten in the basement,with a lift serving all floors. Thebasement rooms are currentlyunoccupied and around half of therooms on the upper floors are currentlyrented out. These rooms range in sizefrom 120 sq ft to 380 sq ft and the idea isthat there is a space to cater for the two-person outfit to a larger concern

employing ten people or more.Pavilion manager William Aylmer is

cagey about what Pavilion actuallycharges for its office space. He isreluctant to disclose a headline figurebecause he fears that prospective tenantswon’t end up comparing like with like.He explained: “Our charge is all-inclusive. It incorporates rent, rates,heating, security, electricity, buildingmaintenance, use of two boardroomsand shared reception, kitchen andbathroom facilities. When comparingproperties, too many people just look atthe headline rental figure and don’t takeaccount of the additional costs that weinclude in our charge.”

Still, Aylmer insists that going downthe serviced office route in PavilionHouse can achieve substantial savingsfor firms, especially micro businesses.The largest cost take-out can be gettingrid of the secretary role, which for mostfirms can amount to at least €25,000 perannum. Another attraction, he insists, isthe general flexibility.

“We have one company which had fivestaff and then reduced to three so theyneeded less space. So they switched

SERVICED OFFICES

Two Georgian buildings on Fitzwilliam Square have been remodelled to cater forentrepreneurs and startups seeking flexible office space, writes NICK MULCAHY

Making The Most OfGeorgian Office Space

Design and shape your future with an innovative MSc in Software Engineering & Database Technologies (MScSED). Developed by the National University of Ireland, Galway and Regis University in Denver (USA), this tailor-made programme is designed to advance your knowledge of software engineering and database design and development.

With particular emphasis on innovation in software development and database systems, the MScSED will give you specialised knowledge of specific IT topics and provide you with an opportunity to develop advanced research and/or development skills.

As the course is delivered part-time over two years and completely online, you can study where and when you want. Course content is delivered as part of a paced learning cycle with the added support of an online tutor.

Programme details & application procedure available at:

www.it.nuigalway.ie/mscsed

Check out the programme website for details on closing date for applications.

design your future

MSc Software Engineering & Database Technologies (MScSED)

room and saved on their monthlycharge. Now they’re back up to five staffand we can offer them the extra spacethey need. We are very flexible on leaseduration,” said Aylmer.

Not included in the fixed monthlycharge is the cost of phone andbroadband. This is charged extra at €35per month per desk and tenants pay theirown call charges on top of that. Alltenants get to use one of the finely-appointed boardrooms for ten hours per month with an additional chargeincurred for excess hours. Car parkingspaces behind the building, which areabundant, cost €2,000 per annum.

A couple of rooms in Pavilion Houseare given over to hot desking. For €330per month, individuals get a desk spacein a shared room plus use of all thebuilding’s facilities. According toAylmer: “We’re very anxious to workwith genuine people who have lost their

job and are looking to start out on theirown. What’s in it for us is that if suchpeople succeed then maybe they’ll growto a requirement for more space. Topromote our service, we liaise a lot with

accountants and solicitors. Our solutioncan suit companies in the process ofdownsizing but who still want a citycentre, premium office location.”Details: www.pavilionhouse.ie.

Business Plus March 2010 31

Pavilion House on FitzwilliamSquare combines two massiveGeorgian buildings into a servicedoffice centre

Business Plus March 2010

SMALL BUSINESS CAN

32

It has been a rapid ascent for Dublin chipmanufacturer DecaWave. The firm wasfounded by Michael McLaughlin in2004, with his university friend Ciaran

Connell coming on board in 2007.Connell had spent the previous ten years working in France and the US for large corporates such as Motorola.Connell is the firm’s chief executive, whileMcLaughlin is chief technology officer.

DecaWave, based in the Digital Depot,is a fabless semiconductor manufacturer,making chips which can be used for real-time location systems and wirelesssensors. The firm’s flagship product isScenSor, which in its simplest form can be used to tag people, equipment andcommunications devices. Such technologyhas been around for years, but DecaWave’sproducts allow for greater precision inlocating items to within 10cm.

A major focus on the firm has beenraising cash to fund further developmentof its technology. DecaWave has so farraised almost €4m through a combinationof friends, family and Enterprise Ireland.Connell said: “Raising money in the firstinstance is about believing in yourcompany and putting trust in people.

People in Ireland knew Michael’s recordand people knew me in the US. The moreyou deliver in terms of a market reaction,the more people start to believe in you.Friends of friends then get interested andthe whirlwind effect kicks in.”

Since 2008, the company has beenattempting to secure €10m in equityinvestment. “By the end of March we’llhave raised around €2m of that whichwill see us through until the end of2010,” said Connell. “We’ll seek theremaining €8m towards the end of theyear. Raising venture capital is always achallenge. We’ve got as far as havinginvestments 90% secured, but the oldphrase ‘you don’t have the money untilit’s in the bank’ is so true. It’s crucial toalways have a back-up plan.”

According to Connell: “It’s not nice

being told no. The only way to deal withrejection is to accept that if the product isas good as you say it is and people are stillsaying no, then there’s something wrongwith the pitch. It took me a long time tocome to terms with that. Investor Firstare representing us now. They helpedbreak us down and build us back up again- to help us say what we want to say.”

DecaWave made a major breakthroughlast year, signing a deal with electronicsgiant LG which will see the Korean firm develop a module based onDecaWave’s ScenSor. How did that dealcome about? Says Connell: “It’s all aboutbuilding credibility and delivering on theexpectations that you create. Firms likeLG are always scouring around lookingfor innovative companies. They hit onour website and the enquiry started fromthere.”

Connell added: “You have to knowyour strengths. For young firms startingout, I’d recommend finding a mentorwho has experience of dealing with a bigcompany. Having a contract with LG isall well and good, but having a badcontract can be the death of yourcompany. When you get into bed withthese firms you have to know exactlywhat you want and exactly what it isyou’re prepared to walk away from.Mentors can help with that.”

DON’T OVER-FOCUS ON BRAND BUILDING

Building brands and moreimportantly the story behind thebrand, is absolutely important,particularly in an environment

where we are suffering from anincreasing information overload. Butthere is a time and place for everything.

At startup stage, companies shouldnot over-focus on brand building. They

need to think more about bread andbutter marketing, which is selling.Branding and marketing are sometimesused as an excuse not to engage withthe marketplace and sell. In a lot ofbusinesses, there seems to be acomplete disconnect between marketingand sales. No wonder. Marketing istaught at universities, while selling isn’t.

DecaWave principals Michael McLaughlin (right) and Ciaran Connell

Have A Back Up Plan

One of the biggest outlays in business is on its mostvaluable asset - its people. Almost 33% of theRevenue’s income stream in 2009 came from Income

Tax. The payroll operator is responsible for one of the biggestspends in an organisation. Yet all too often this function istaken for granted. While software provides an excellent tool forautomating the process, it takes specific skills to understandthe ever-increasing changes in calculations, legislation andemployee circumstances necessary to intervene with the softwaresystems and ensure every employee is paid the right amount.

At a time when companies are reviewing budgets, how manycompanies consider the real cost of processing payroll in-house? What profitable activities could this time be spent on ifit were not spent on payroll? Outsourcing is a provenalternative for freeing up valuable time and resources.

Outsourcing SavingsCompanies typically experience savings of at least 25% byoutsourcing their payroll and while these savings might bereason enough to persuade a growing number of FinancialDirectors to take the outsourcing option, significant other savingscan be made by utilising the expertise of payroll professionals.

Clients of Paycheck Plus save an average of 6.5% of annualpayroll spend. This translates to a saving of €2,000 for everyemployee on a salary of €30,000. The great advantage ofoutsourcing is that companies have full-time access toprofessional services but pay only on a needs basis.

Paycheck Plus offers a modern, cost-effective service with theutmost of personal attention and quality customer care. Withclients across every sector and location in Ireland, PaycheckPlus caters for companies ranging from one to several hundredemployees. Having every team member fully qualified inPayroll calculations and employment law gives the companyan immediate advantage when it comes to utilising theirexperience for the benefit of their clients.

Continual Training“We spend 17% of our time on continual training to ensurethat we offer the most up-to-date service for our clients and

their employees,” says Managing Director Anne Reilly. “Theseclients value their people and want to provide them with theoptimum result on pay day. We focus on maximising the nettake home pay while minimising the cost to the employer,”she adds. “Our understanding of PAYE, PRSI and the personalcircumstances affecting each employee ensures that we makereal cost savings for both parties.”

It’s no coincidence that Paycheck Plus has been the recipient ofseveral awards including Payroll Outsource Provider of the Year.Their client-centric approach, attention to detail and qualitycustomer service ensures they get to know their clients so theycan tailor a service to fit seamlessly with their client’s business.

Paycheck Plus offer a range of information services for theirclients including workshops, newsletters and clinics. Theirwebsite at www.paycheckplus.ie provides practical informationand downloads supporting their objective of maximising taxefficiencies for employers and their employees. “Our motto is‘Making Payroll Easy’,” adds Reilly. “We make it easy,compliant and cost effective.” Given the benefits of payrolloutsourcing it stands out as not only a viable option, but formany cost conscious businesses, the most sensible optionavailable.

33

® COMPANY PROFILE: Paycheck Plus

Paycheck Plus Managing Director Anne Reilly

Profitable Payroll

Lo-Call 1890 552 552

Web: www.paycheckplus.ie


Outsourcing the payroll function can lead to both savings and increased efficiencies

AUSTRALIA

As Ireland’s economy seems doomedto years in the doldrums, sunnyAustralia could be an option forbusiness people who want a new

start. The goliath that is China should liftall boats in Asia over the coming decade,though Australia has not escaped theimpact of the global recession.Unemployment in Australia rose from3.9% in 2008 to 5.8% last year, thehighest rate in almost six years. That’s stillwell below the OECD average of 8.3%and much better than Ireland’s officialrate of 12.7%.

Australia’s fiscal stimulus packageseems to have cushioned the decline inemployment caused by the globaleconomic downturn. Canberra’s fiscalpackage was the third largest after Koreaand the United States among OECDcountries. Adjustments to working hoursmay have prevented more widespread job

losses, but are also leading to growingdiscontentment. There are now almost885,000 underemployed workers - part-timers who want to work more - inAustralia, an increase of 23% from thesame time two years ago. Theunemployment rate for 15-19 year olds isalmost three times the adult rate at 16%.

Having been less affected by the crisisthan most other OECD countries,Australia is likely to experience arelatively more robust recovery. Growthis projected to pick up to 2.5% in 2010and 3.5% in 2011, with unemploymentpeaking at around 6% this year. Thegovernment is already scaling back thefederal budgetary stimulus so businessprofits will likely be hard fought for in thecoming years.

Australia encourages and welcomesinvestment from overseas entrepreneursthrough its business visa programme.

One specialist in this visa area isAustralian immigration solicitor MegeDalton, who set up her own business inDublin in 2008 after working in anAustralian immigration company inBrisbane and then in Dublin. BusinessVisas Australia focuses on the niche ofbusiness owner and investor visas toAustralia, which normally requireapplicants to have a successful business orinvestment background and also havesignificant net asset levels.

So what are the Aussie visa require-ments for Irish business people? We satdown recently with Dalton to find out:

BUSINESS PLUS: An Irish business personwants to emigrate to Australia and establisha business. What requirements do they needto satisfy to qualify for a visa?MEGE DALTON: There are a range ofbusiness visas to suit people who areeither business owners, investors,managers or senior executives. Applicantsfor these visas should have a successfulbusiness background and managementrecord , have a minimum net asset level ofA$250,000 to invest in an Australianbusiness and have a genuine intention toestablish a business or carry oninvestment activities in Australia.

Are there any business activities or sectorswhich get preferred treatment?Most Australian states’ governments andthe Australian federal government favour business activities which createemployment, introduce new technologiesor improve exports and reduce imports toAustralia. They do not favour particularindustries but their main focus is on howthe business activity that a businessmigrant is going to establish will benefitthe Australian economy.

How You QualifyFor Aussie Visa

Australian immigration solicitor Mege Dalton explains to DOUG CASEY what Irishbusiness people need to know about establishing a business down under

The Australian economy is going through a rough patch too


AUSTRALIA

35

What do Irish people need visa-wise to travel down under and explore businessopportunities?Many Irish people who consider applyingfor an Australian business visa visitAustralia before they start the process.Most times they have been there severaltimes in the past on holidays when theidea of moving permanently beginsforming in their minds. For any Irishperson wanting to go out to Australia fora market research trip there is theBusiness (short stay) visa subclass 977. Ifyou hold an Irish passport you can veryeasily obtain this visa online. It is valid for12 months and will give you multipleentry to Australia. You will be allowed tostay for up to 90 days each time you visit.This visa is intended for market research,business negotiations and meetings so issuitable for anyone thinking of applyingfor an Australian business visa and wantsto check out the particular locality ofwhere they want to establish themselves.

An Irish person sees a business advertised forsale in Sydney that they would like to buy andthen go down there and run it. What are theimmigration rules they need to satisfy?First of all you would need to already havebeen in business in Ireland. The Australiangovernment’s business visa programme isaimed at individuals who have a provenbusiness background in their country oforigin. The government wants someconfidence that a new business migrant totheir shores is going to have the skills andexperience to make a success of their newAustralian business or investment.

Apart from a business background,business visa requirements can relate toyour business turnover and your net assetlevel. One of the most popular businessvisa categories that Irish business migrantsapply for is the state-sponsored BusinessOwner visa subclass 163. This visa ispopular because it has the lowest financialthreshold requirements of any of the othersix business visa categories. The mainrequirements are that an applicant:

● is under 55 years of age● has or owned a business that had turn-over of at least A$300,000 (€190,000) fortwo out of the last four financial years andin those two years they managed thebusiness on a daily basis● has a successful business background.● has a net asset level that is at leastA$250,000 (€160,000) plus an additionalamount for their settlement costs inAustralia● has not been engaged in a businesswhere the provision of professional,technical or trade services took up morethan 50% of your time● has a genuine commitment to engagein business activities in Australia and hasdemonstrated that Australia will benefiteconomically from the proposedbusiness or investment● has obtained sponsorship approvalfrom the relevant authority of theparticular Australian state they wish toreside in. The top three destinations forIrish business migrants at the momentare Brisbane, Sydney and Perth.

If you are not a business owner buthave been in senior management in abusiness for at least five years, thesubclass 163 visa may still be an optionfor you. The 163 visa is the most popularchoice of visa for potential businessmigrants around the world and itaccounts for about 90% of Australianbusiness visa applications made to the Department of Immigration andCitizenship.

www.bvaustralia.com

The Australian government recentlyannounced major changes to itsskilled migration system. The lastmajor overhaul was in September

2007, an initiative of then prime ministerJohn Howard and the Liberal Party. Threemonths later, Kevin Rudd and the LabourParty were voted into office and sincethen has been a constant fine tuning ofimmigration policy.

Rudd’s government plans to rid itself ofaspects of the Howard immigrationsystem which allows hairdressers andcooks to emigrate to Australia whilemany highly skilled people are deemedineligible. According to visa specialistMege Dalton: “The government views thecurrent points test table as out of touchwith Australia’s need for highly skilledmigrants. The most significant change willbe introduction of a new skilledoccupations list. The new list will favourmanagers, engineers, medicalprofessionals and teachers.”

Australia Targets Skilled Professionals

Word Perfect Translation Services Ltd22 Upper Ormond Quay, Dublin 7.

Telephone: 1890 707 707 Website: www.wordperfect.ie

Any Language - Any Time - Anywhere

Ireland’s leading provider of professional translation and interpreting services

Word Perfect Translations


Founders Profit From Iontas SaleIontas, a developer of performancemanagement software based inLetterkenny, has been acquired by UScompany Verint Systems. Verint ispaying €10.7m in cash upfront, with afurther €4m possible on the earn-outover the next two years. The dealrepresents a big pay day for Iontasfounders Joe Stockton and MartinMcCreesh, who each owned around15% of the firm.

Venture capital firms Mentor Capitaland Enterprise Equity owned 18% and16% respectively, while Mentorchairman Michael Pierce owned 3%.The firm’s chief financial officer FrankBlaney owned around 10%, whilecompany filings show a further tenprivate investors: GT Shaw, SP Finlay,MV Shaw, William Connor, AnthonyFayne, Leo McAuley, Denis McAuley,Stewart Norris, William Norris andSamuel Norris. They all owned stakesof between 1% and 3%.

Iontas was founded in 2000 and itsclients include BT, Abbey and Experian.Filed accounts show that the firm hadnet assets of €2m in December 2008.Texas-based Verint is listed on theNasdaq, with a market capitalisation of€550m. The two firms have workedtogether for a number of years. Iontaswas advised by Raglan Capital inDublin.

Sisk Snaps UpUK’s EschmannThe Sisk Group has acquiredEschmann, a UK manufacturer ofmedical equipment. The price paidwas not disclosed but press reportssuggest that family-owned Sisk paidbetween €22m and €28m. Eschmannis involved in the design andmanufacture of infection controlsystems, operating tables, lights andelectrosurgical units. The firmemploys 200 people and had turnoverof €29m in 2009. Sisk is primarily aconstruction firm but diversified intothe healthcare sector five years ago.Eschmann marks its first step intomanufacturing.

Other Activity● First Derivatives plc has acquiredsoftware firm Cognotec, which wentinto receivership in January, for €3.5min cash. Kieran Wallace of KPMG actedas receiver for Cognotec, which wasfounded in 1991 by Brian Maccaba.Cognotec once employed 200 peoplebut now has a staff of 64 people, 45 ofthem in Dublin. ● Cork-based industrial compostingspecialist McGill EnvironmentalSystems (Ireland) has securedinvestment of €920,000 from the DavyBES Fund. McGill, an independentsubsidiary of the US-based McGillEnvironmental Systems group, will use the money to build a new

facility in the midlands. ● Dublin software firm Openet hascompleted a €7.2m funding round ledby Cross Atlantic Capital Partners andEnterprise Ireland. The firm’s chiefexecutive Niall Norton said theymoney will be used for productdevelopment and to expand its sales anddistribution capability. ● Cork pharmaceutical equipmentdeveloper Luxcel Biosciences hassecured funding of €2.5m as part of astrategic partnership with US firmMocon Inc. Luxcel will use the funding to drive plans for globalexpansion. Luxcel was founded in 2002, as a spin-out of UniversityCollege Cork.

39 – 40 Upper Mount St., Dublin 2, IrelandT: +353 (1) 661 0866 F: +353 (1) 661 0883

Business, Litigation and Dispute Resolution, Commercial Property

Club Travel is purchasing the BudgetTravel brand name from Budgetliquidator, Simon Coyle of Mazars, for

an undisclosed sum. Club Travel, led byLiam Lonergan, made a net profit of€3.8m on turnover of €116m in 2008 andhad net worth at year end of €15m. Coylesaid there were seven expressions ofinterest in the Budget brand. BudgetTravel, established in 1975, had 17 outlets

and employed 172 people before it wentbust last November. The deal is subject toapproval by the Competition Authority.Lonergan said: “Budget Travel is a brandthat everybody knows and will give uswonderful visibility in the leisure space.We’ll offer the same destinations asBudget did before, with perhaps a fewadditional long-haul options.” Club Travelwas advised by Crowley Millar.

Club’s Lonergan Buys Budget Travel Brand

Flashback to 2003 – when people queued for Budget bargains


You want to get across themessage that your serviceoffering can transform theway people use their

home phone. So what you do?First step is to source a nine-foot tall version of OptimusPrime, a character from theTransformers franchise. Thenyou pack Optimus into a vanand hot foot down to MeetingHouse Square in Temple Barin Dublin. Upon arrival, allthe company’s senior execs -including the boss - help withreassembling Optimus. Handlewith care. You handle witheven more care the blonde inthe bikini - Hannah Flattery -without whom the photoopportunity hasn’t a chance ofmaking it into the Sun, Star orMirror.

Because the company behindthis publicity stunt is calledBlueface, presumably theyconsidered some face paintingfor Ms Flattery. Instead theysettled for the blue swimsuit(which matches the colour inthe company’s logo) on a coldwinter’s day when thetemperature in Dublin citycentre was a chilly fourdegrees.

Credit the bright idea toBlueface’s chief executive AlanFoy, who previously workedwith Coyle Hamilton and

NCB, and joined the companylate last year. Says Foy: “Thereare lots of very exciting news inBlueface. We have specialcutting edge projects inincubation which clearlydemonstrate Blueface’scommitment to innovation andto delivering low-cost, 21stcentury telecoms for all ourcustomers.”

Blueface’s niche is VoIPtelephone service for homesand small businesses.Customers can retain theirexisting phone numbers, phoneand network/PBXinfrastructure and make phonecalls using the internet. Thecompany’s current promotionoffers free local and nationalcalls in Ireland for life for€199. The offer includes aSiemens Gigaset cordlesshandset and the catch is thatthe offer lasts as long as thehandset does. The other catchis that the offer does notinclude calls to mobiles. Thefinal catch is that the offer isstrictly for residential users.The company warns: “Thisproduct may not be used forany commercial purposewhatsoever.”

Still, for households withchatty female teenagers, thiscould be the optimum solution.Details www.blueface.ie.

Left: Blueface executives Brendan Gaffney, Alan Foy, AlanHaverty and Feargal Brady get to grips with a super-sizedmodel version of Optimus Prime in Meeting House Square. Itwas all for the good cause of setting up a photo opportunity forchief executive Foy (right) and executive vice president FeargalBrady to publicise the company’s €199 VoIP phone offer. Notforgetting the inclusion of eye candy Hannah Flattery, picturedright. (Photos: Mark Stedman/Photocall Ireland)

Flattery Gets You

Everywhere

THE BIG PICTURE


REVIEW

Plane crashes provide many businesswriters with intriguing case studies.Malcolm Gladwell, in Outliers: TheStory of Success, says that how good a

pilot is has a lot to do with where thatpilot is from i.e. the culture he or she wasraised in. Gladwell uncovered a strongconnection between culture and crashes.He analysed transcripts from black boxesto study the communication inside thecockpit of a Korean Air jet shortly beforeit crashed in 1997.

Instead of seizing the controls when itwas clear that the captain was notresponding properly to adverse weatherconditions, the anxious first officer couldnot bring himself to do more than hint.Cultural deference inhibited him.Gladwell says that we tend to “sugar-coat” what we really mean to say, becauseit’s not socially acceptable to be brutallyhonest.

Cultural deference explains whatlinguists call “mitigated speech”, when wespeak in a deferential way in order to bepolite or show deference to authority.Mitigation is often the appropriate way to communicate, but not always. Thecockpit of an airplane on a stormy night isone such instance. Gladwell points to sixlevels of mitigation in speech. Zeromitigation is saying: “Turn thirty degreesright.” A little less explicit is: “I think weneed to deviate right about now.” Softerstill is: “Let’s go around the weather.”Softer still is: “Which direction wouldyou like to deviate?” Softer still is: “I thinkit would be wise to turn left or right.”

And softest of all – and most mitigated,inappropriate and useless of all in the

circumstances – is: “That return at 25miles looks mean.” A hint is the hardestkind of request to decode and the easiestto refuse. Mitigated speech also explainswhy planes are safer when the leastexperienced person is flying, because itmeans the second pilot isn’t going to beafraid to speak up.

It is nearly a quarter of a century sincethe 1986 Challenger space shuttledisaster and some years ago Gladwellreturned to the tragedy in an article thatwas later published as a chapter in What

The Dog Saw. The chapter offers acompelling and unsettling argument thatthe rituals that follow plane crashes andother high-profile disasters are as muchan exercise in self-deception as they aregenuine opportunities for reassurance.

Conventional wisdom blames theChallenger tragedy on the people at Nasanot doing their job and failing to noticethe inherent weakness of the O rings. ButGladwell argues that accidents like theChallenger underlie the fact that we haveconstructed a world in which thepotential for high-tech catastrophe isembedded in the fabric of day-to-day life.At some point in the future, wroteGladwell in 1996, for the most mundaneof reasons, a Nasa spacecraft will again godown in flames.

And he was right. Six years later, in2003, the Columbia space shuttledisintegrated as it entered theatmosphere. This time the reason wasoverheated panels, and once againattention focused on the attitude of Nasamanagement towards safety issues. TheColumbia Space Accident Investigationfound that the causes of the institutionalfailure responsible for Challenger hadnot been fixed, and that the same flaweddecision making process that had resultedin the Challenger accident wasresponsible for Columbia’s destruction 17years later.

But Gladwell questions the usefulnessof public post mortems. High-techaccidents, he claims, may not always haveclear causes, and may be inherent in thecomplexity of the technological systemswe have created.

Business LessonsFrom Plane Crashes

Analysis of plane crashes and near misses by management thinkers revealslessons that hold true for business decision making BY YANKY FACHLER

Malcolm Gladwell: pilots shouldn’tsugar coat what they mean to say


REVIEW

Sway: The Irresistible Pull of IrrationalBehaviour, by Ori and Rom Brafman, usesa plane crash to show how we are“swayed” to act in irrational ways. Theauthors tell the story of Captain JacobVan Zanten, probably the mostexperienced pilot in the entire KLM fleetand the airline’s head of safety. On March27, 1977, Van Zanten was piloting aBoeing into Las Palmas airport in theCanary Islands. A bomb alert in theterminal caused five airliners, includingthe KLM flight, to be diverted to LosRodeos, a small regional airport on theneighbouring island of Tenerife, with asingle runway and one taxiway.

Once the emergency in Las Palmas wasover, fog prevented the diverted aircraftin Tenerife from taking off immediately.Van Zanten faced a dilemma. He knewthat unless he took off soon, themandated rest period for crews wouldmean that he and the passengers wouldbe stuck on the ground overnight. This

was a logistical nightmare, because thereweren’t enough hotel rooms toaccommodate all of the passengers.

When Van Zanten finally receivedclearance to prepare for take-off,and despite the fact that fog severely

restricted visibility, he was in such a hurryto get airborne that he took off, eventhough his co-pilot pointed out that theyhad not yet been issued with finalclearance from the tower. As the planethundered down the runway in the fog,Van Zanten suddenly saw another plane –a Pan American Boeing - parked on therunway. His attempt to avoid the otherplane failed, and 584 people died.

What happened? What swayed VanZanten off the path of reason? Accordingto the Brafmans, an unseen psychologicalforce was at work – “loss aversion”, whichresults in focusing more on what we maylose than on what we might gain. Lossaversion is the systematic mistake of

evaluating decisions in isolation ratherthan in the aggregate, and over-weighting losses relative to gains. We allgo to great lengths to avoid possible loss,even when it means taking outsized risksrelative to the actual loss impact.

Van Zanten was so preoccupied withavoiding a loss - incurring the cost ofputting up the passengers, the chainreaction of delayed flights, and the bloton his perfect time-keeping record - thathe did something that even a pilot on hisor her maiden flight should never havedone. In the decision-making process, itseems, potential losses hurt twice as muchas potential gains feel good.

Jonah Lehrer in The Decisive Moment:How the Brain makes up its Mind, offers ablow-by-blow account of United AirlinesFlight 232 from Denver to Chicago inJuly 1989. An hour after takeoff, the quietof the DC-10’s cockpit was shattered bythe sound of an explosion from the back



of the plane. The plane shuddered, thenrighted itself, but the number two enginewas no longer operating. In itself, this canbe dangerous, but is rarely catastrophic,since there are two other engines, one oneach wing.

However, the crew under Captain AlHaynes now discovered that the controlswere not working. The circuit boards andonboard computers were still working, soit couldn’t be due to electronic failure.The problem lay with the hydraulics – allthree pressure gauges were rapidlyplummeting to zero. The hydraulicssystems control the plane. No hydraulics,no control.

Without losing his cool, Haynesmanaged to use his thrust levers to steerthe plane. This succeeded for a while butthen a new problem arose: the planestarted to dive. Haynes ignored his firstimpulse, and took the counter-intuitivedecision to accelerate on the downhilland brake on the uphill – exactly theopposite of what he had been trained todo. The plane eventually made a crashlanding at Sioux City airport. Thecockpit broke apart from the main body,and all the pilots were knockedunconscious. Fire broke out in thefuselage and 112 passengers died.

But the remarkable thing was thatanother 184 passengers – and the pilots inthe cockpit - survived the accident.Though faced with a scenario that wasnever supposed to happen, Haynes

overcame his emotions and used hisprefrontal cortex, which is uniquelydesigned to come up with creativeanswers, to generate that flash of insightthat can mean the difference between lifeand death. Hayes tuned out his feelings.At the critical moment, Haynes reachedthe peak of rationality. The uniqueness ofHayes’ achievement is evident from thefact that when other pilots later tried totackle the identical scenario on simulatorsat United’s training centre in Denver, all57 pilots failed to land the plane.

According to Ben Sherwood, author ofThe Survivors Club: The Secrets AndScience That Could Save Your Life,

surviving a plane crash and other disastersis a way of perceiving the world aroundyou. Sherwood says that we are subjectedevery day by stories about horrificcalamities, tragic events and scarystatistics, and inevitably our thoughtsturn personal. We wonder if we havewhat it takes to get through the worstthrown our way.

According to Sherwood, the key factorsto surviving a plane crash are not toassume that the situation is hopeless, butto take action rather than freeze or waitfor instructions, to internalise theemergency evacuation directions given atthe beginning of the flight, to formulate apersonal emergency exit action plan, andto book a seat that is within five rows ofan exit.

Overreaction can determine how manypeople survive a plane crash, says AmandaRipley in The Unthinkable: Who SurvivesWhen Disaster Strikes. All it takes is one or two people to panic and theconsequences can be dire. In February1991, a Skywest plane collided with aUSAir plane at LAX. Everyone on theSkywest plane died immediately. On theUSAir plane, 19 passengers died frominhaling smoke, ten of them whilewaiting in line to use the right over wingexit. Investigators found that the delaywas caused in part by a scuffle betweentwo passengers. If they had left in anorderly and swift fashion, more peoplewould have survived.

According to Ripley, emergency plansare designed to meet the needs ofemergency officials, not regular people.Ripley proposes changes in publicannouncements that would increase theeffectiveness of the message. “Secureyour own mask before helping others”should be replaced with “In the event of a rapid decompression, you will onlyhave 15 seconds before you loseconsciousness”. “Leave all hand baggagebehind” should be replaced with “Takingluggage will cost lives”.

When I interviewed Edward “lateralthinking” de Bono, he too used theanalogy of plane crashes when discussingthe fact that the biggest barrier we facetoday is the inadequacy of our thinking.Business must avoid the temptation toslip into reactive mode, says de Bono.Business must proactively focus onthinking up new solutions that fit moresuccessfully with the psychology ofcustomers. For example, 70% of planecrashes are caused because of the inabilityto get instant extra lift. So de Bonosuggested to Boeing engineers that theyshould build planes that land upsidedown, because this will give downwardtrust. From this impossible, provocativeidea came the idea of a normal plane withtwo small wings upside down. When aplane needs extra lift in an emergency,you retract the small wings or flap themup. Boeing is now looking into this idea.

All businesses should be askingprovocative questions and seekingunlikely solutions. Thinking is ourultimate resource. If we want to raise theability and potential of the workforce, weneed to teach people how to think.

Rituals that follow disasters such as the Challenger tragedy in 1986 can be an exercise in self-deception


DATA MINING

50

Time was when in order to gaugepublic and media opinion, companiesorganised a weekly parcel of presscuttings. They either gave good news

or bad news but, unless you conductedregular opinion and market research, younever knew what your average consumerreally thought about you.

Indeed the only people likely to sourcethat sort of feedback were people workingfor the Stasi, the KGB, the CIA or theUK’s GCHQ, espionage services whichroutinely steamed open envelopes andeavesdropped on phone calls. Nowadaysthere isn’t enough time to read andanalyse the countless millions of wordsgenerated online per hour, let alone perday. Not to mention the blogosphere,Twitter, Facebook, or even specialinterest discussion forums.

So who are you going to call? Well, youcould start with Professor PadraigCunningham of the Clique StrategicResearch Cluster at UCD, who has comeup with a fiendishly cunning solution. It’san algorithm, or computer routine, whichenables measurement of how a company,sector or product is surviving the slingsand arrows of outrageous fortune. He didit at the behest of Polecat, a UK companythat established a subsidiary in Dublinjust to enjoy the pleasure of working withCunningham and his team.

Polecat joint founder James Lawndoesn’t normally rate academics toohighly but says that the UCD team is theexception to the rule. “They’re veryentrepreneurial and that makes them veryeasy to work with,” he says. When Lawnwas asked by Enterprise Ireland if he had

Mapping The Net’sInformation Landscape

MeaningMine is a system that combines data mining and text analytics to mapthe information landscape that surrounds any company or organisation.

The system is marketed by UK firm Polecat but the science that drives it was developed in UCD, writes GERRY BYRNE


DATA MINING

any special requirements in establishinghis subsidiary, he said he listed just one -Padraig Cunningham.

Cunningham, explains Lawn, is aleading light in the field of artificialintelligence in Europe, if not the world.Polecat, which started life as a mediaconsultancy and has now repositioneditself as a technology company handlingassignments for government agenciesand large corporations, employs 20software engineers in Dublin and worksclosely with Cunningham’s team, whichis funded by Science Foundation Ireland.

Polecat Dublin developedMeaningMine, the company’s basicsoftware platform that has attracted someserious international attention. SunMicrosystems and Oracle, at the time oftheir merger earlier this year, bothhighlighted it as an outstanding exampleof an innovative computing application.At that stage it could scan and evaluate300,000 online articles a day and fourmillion blog posts. Cunningham’s boffinshave now refined it even further, makingit even more efficient.

One of the difficulties for the UCDteam was making MeaningMine morescalable i.e. capable of handlingenormous projects as easily as small ones.Depending on the project the UCDcontribution improves efficiency byanything between 5% and 50%,according to Lawn. A new release of theproduct enables Polecat to scan microblogs to take advantage of informationgenerated by approximately 30 millionTwitter users and 250 million Facebookusers.

“The blogosphere is now every bit asimportant as online media,” saysCunningham. According to Lawn:“Natural language processing takes along time on a computer and the UCD

algorithms represent a major advance forus. This is only the beginning of what wewill be doing with UCD.”

It’s one thing tracking down all onlinementions of your product; it’s anotherdeciding whether or not they’refavourable or unfavourable, or if they’re saying something else entirely.Cunningham has devised ways oftracking sentiment and it’s more than justthe judicious use of search enginekeywords. His algorithms parse andanalyse web material as it encounters it,learning new words and, throughadvanced artificial intelligence, devisenew ways of presenting the material itfinds. The beauty of this technology isthat it can be tailored to produceimmediately usable business intelligence.

Cunningham has produced a websiteto demonstrate this principle in everydayoperation. It analyses economicsentiment on a daily basis across themajor Irish media to determine whichoutlets are the most, and the least,positive about Ireland’s economicprospects. Its findings: RTE tends to be the most positive, and the Irish Independent the least. (Seehttp://tinyurl.com/y9ogrsx).

Another demonstration websiteillustrates how important the system’sartificial intelligence is in updating thekeywords associated with negativity orpositivity on a daily basis. Last October,for example, the word ‘Brian’ was rankedhighly as appearing in a negative context.But by December 7 Brian was replacedby, among others, the word ‘pilot’, due nodoubt to the resistance of airline pilots atthe time to structural reform at AerLingus. (See http://tinyurl.com/ye9uppy)

Analysing data according to traditionalheadings is difficult enough but analysingit according to sentiment makes it extremely complicated, saysCunningham. Yet sentiment analysis canunlock vast hidden meanings in businessinformation. There is other data to bemined, he adds. Apart from socialnetworking sites like Facebook, creditcard transactions and mobile phone callsand emails all display network behaviourswhich can be very informative. Thetechnology can be used to detectcharacteristic transaction patterns andeven prevent fraud.

Cunningham recently signed a dealwith fraud prevention specialist Norkomto develop new crime preventionroutines, similar to those used tohighlight unusual spending patterns. Andthere’s also a contract with viral marketconsultancy Idiro, which wants newanalytical tools to help its clients launchword of mouth online and other viralmarketing campaigns. Multinationalcomputing giant IBM is also a client.

Cunningham has also used routinesdeveloped experimentally at UCD todetermine if consumer voting on hotelsand restaurants on travel websites, forexample, reflects true preferences or if itis secretly manipulated by the website’sowner.

Padraig Cunningham: his algorithmmonitors corporate reputations


ENTREPRENEURS

52

The sight of someone browsing theweb on their laptop or phone whilesipping on an Americano has becomea common one in Ireland’s coffee

shops. And for hotels WiFi availability isnow expected by most guests. But noteveryone has got with the programme,which means there are still solid growthprospects for WiFi operator Bitbuzz.

Bitbuzz was founded by Cork-bornShane Deasy and Alex French in 2002.They started the business at a time whenmost people were running away from thetelecoms and technology sectors. Buteight years on and the duo have built upwhat managing director Deasy refers toas “a nice small business making tidyrevenues”.

Bitbuzz currently has 210 WiFihotspots dotted around Ireland, witharound 80 in hotels and the remainder incafes and hospitals. Bitbuzz sells itsbroadband over Eircom’s network, havingswitched from Magnet last year.Customers include Fitzpatrick Hotels,Travelodge and BB’s Coffees and Muffins.

Coffee shop owners and hoteliers havetwo options when it comes to installingwireless broadband. They can do itthemselves or they can call on the servicesof a specialist provider such as Bitbuzz.With the DIY option, a standard wirelessinternet router will do for most cafes,though it’s a bit more complicated for alarge hotel. One of Bitbuzz’s sellingpoints is that they look after all thetechnical aspects of the service. So if thereis a problem with the internet link, thenthe premises owner is assured that sortingthe problem is a phone call away.

The other selling point is that with theBitbuzz solution, the internet service canbe rationed or used as a revenue source.According to Deasy, kitting out a cafe orhotel with Bizbuzz’s WiFi infrastructurecan cost anywhere between €10,000 and€50,000, depending on the size of the

premises. The client then either paysBitbuzz a monthly fee or, if they arecharging their customers for thebroadband access, Bitbuzz takes a share ofthe revenues.

“Many coffee shops charge a small feeto their customers for internet access,”said Deasy. “Small coffee shops don’twant people sitting around too long andnot buying anything. Whether a hotel

offers free WiFi will largelydepend on their room rate.Expensive hotels will generallyoffer complimentary internetaccess while budget hotels useWiFi to generate extra revenue.”

The managed broadbandservice also gives venues peaceof mind as regards legislationrelating to data protection,ComReg licensing regulationsand data retention issues. Forthe pay as you surf model,Bitbuzz facilitates hotels tocreate vouchers for guests, and there’s a detailed onlinereporting system too.

As Bitbuzz funds the upfrontequipment cost and the cost ofinstallation, the company hashad to grow slowly. Thecompany was originally fundedby Deasy and French, alongwith family and friends. Thefirm first turned a profit in 2004and since then has used itsprofits to fund expansion. Deasyexplored the VC route in 2003but with so many investorshaving had their fingers burnt intech startups during the dot combubble, nobody was prepared totake the punt.

“After we started out, we ranout of cash after 11 months,” saidDeasy. “I remember for ourAugust payroll in 2003 I wrote a

personal cheque. If we didn’t get moneyin that month we were gone. Luckily wegot through it.” Deasy owns 43% of theequity, French owns 23% and theremainder is owned by the firm’s otherdirectors, Stephen McCormack, NicholasLogue and John Gunnigan. Small stakesare also held by friends and family.According to Deasy, the company’srevenues in 2009 were just under €1m,

The WiFi PioneersRolling out WiFi connectivity for coffee shops and hotels has been a

slow burn for Bitbuzz, writes GRAEME MCQUEEN

Shane Deasy: “After we started out, we ran outof cash after 11 months”


ENTREPRENEURS

relatively unchanged from the previousyear. The company’s most recent filedaccounts show that the company had net assets of €487,000 in December2008.

Despite the recession, Deasy isoptimistic about the prospects for 2010.Many cafes now offer WiFi for free as away to get customers in the door whilewireless broadband is now offered byvirtually all hotels. Bizbuzz plans a newbroadband offering for hotels and he’salso looking at expansion into the UK.However he concedes that the past yearhas been tough going.

He said: “I’d say we lost around 20customers in 2009, which were all coffeeshops and cafes which shut down due tothe economic climate. We had investeda lot of money and time puttingequipment into these premises and whenthey closed we had to take it away again.However this year we expect to doubleour hotspots just to keep up with

demand. Though hotels struggled lastyear, 2009 was by far our busiest year interms of usage on the network. That isdue to the popularity of devices such as the iPhone, which are changing themarket for WiFi.”

Whether the firm has to seek outsideinvestment in future depends on howthe launch into the UK pans out. Deasyexplains: “If we go slowly we can financeit ourselves. But if we do a deal with ahotel chain then we would need to raise money. Smaller deals we can doourselves.”

While Bitbuzz has become fairly wellknown in Ireland, it’s a different story inthe UK. The firm has made someinroads with one customer in Glasgowand other customers in Liverpool,London and Manchester. “We’ve reallyonly been working on the UK part-time.We’re currently looking to recruitsomeone in England to work the hugeopportunities over there. We hope thatwithin two years we will have as manylocations in the UK as we have inIreland.”

Deasy added: “Competition isobviously hotter there but the UK is ahuge market,” said Deasy. “We wouldhappily be number seven in that market.The problem we’ve had in the UK isthat we don’t have the reputation. Hotelchains have been positive and they haveliked our products. But they all say thesame - that they don’t know us and thatthey’ll only talk to us once we’veestablished ourselves.”

‘The problem we’vehad in the UK isthat we don’t havethe reputation’

March Lunch Offer 7 days1 course €17

2 course + glass wine €20

3 course + glass wine €25

Pre-Theatre 7 days from 5.30pm 2 course €23.95

3 course €29.95

A la carte Dinner available 7 evenings


CRAFTS

Entrepreneurs who make products with their ownhands are bracketed under the crafts umbrella.Around 400 of these micro enterprises had theirwares on display at the annual Showcase in the RDS

Here’s somethingREPORT: Graeme McQueenPHOTOS: Jason Clarke

For Irish craft firms, the annualShowcase expo is a must visit on theannual trade fair calendar. This year's

event saw 400 businesses set up stall in thehalls of Dublin's RDS, as thousands ofdomestic and foreign buyers came totown to see what was on offer. Organisedby the Crafts Council of Ireland and supported by Enterprise Ireland,Showcase was strong on crafts by artisansfrom all over the country, includingjewellery, pottery, ceramics, leather goods,fashion and home accessories.

Showcase, Ireland’s largest craft tradeshow, is held yearly in January and theventure is jointly owned by GerryMurphy, Expo Events Ltd and the CraftsCouncil of Ireland. In 2008, the eventdelivered revenues of €332,000 into theCrafts Council coffers, though the CCI’soutgoings for its national exhibitionprogramme, which includes Showcase,amounted to €417,000.

The CCI’s register of craft enterprisesgrew by 18% through 2008 to 1,700.Most of the council’s annual income of

€3.9m comes from the taxpayer throughan Enterprise Ireland grant of €3.5m, and€2.1m of that goes towards staff andother overheads at the council’s KilkennyHQ. The body escaped the cruel gaze ofColm McCarthy’s Bord Snip. If he haddelved deeper into the council’s annualreport he might have noted that whilecouncil member subscriptions amountedto €6,000, the outgoing for membershipand registration was €6,300.

Affiliated to the CCI are 55 otherorganisations spanning Ceramics Ireland,Feltmakers Ireland, Irish BasketmakersAssociation, Irish Patchwork Society, IrishWoodturners Guild and the QuiltersGuild of Ireland. These organisationshave 2,600 members, though many arenot engaged in crafts in a professionalcapacity.

The crafts people who won awards atShowcase this year include jewellerElaine-Sarah Comerford of Button & Co;furniture maker Dunleavy Bespoke inNaas; Inti Leathers, the Dundalkaccessories company owned by Catherine

Prendergast; Jerpoint Glass Studio inKilkenny; Wicklow-based UnicornDesign; and metalworker PaddyMcCormack from Skibbereen. TheExporter of the Year award went to Solvar.Founded in 1942, the firm startedexporting to the US in the 1960s.

According to Solvar's founder NicholasObernik: "Solvar began exporting to ahandful of shops, mainly in New York.Trade shows are still probably the easiestway for somebody to open a market, butyou have to call a couple of times and letpeople see that you're serious. Trade fairsover here don't get enough buyers fromthe US anymore. It costs a lot of money,but you need to go to them. There's nopoint waiting for them to come to you.The biggest problem for buyers whocome to Ireland is that they order aproduct and they may never receive thequantity they want. It’s imperative thatsuppliers can deliver their orders."

Business Plus met with some of theother exhibitors to hear about how theirmicro businesses are going.

Ourselveswe made

Edyta SzymanskaCeramic Art & Sculpture

The stereotype of Polish workers in

Ireland may involve deli counters and

building sites. But when Edyta

Szymanska and boyfriend Chris Piekarz

made the move from Poland to Ireland

in 2007 they decided to set up their own

ceramics business. The firm, Ceramic Art

& Sculpture, sells its products through

art and craft galleries, as well as craft

shops in Ireland and abroad. "We have

been able to source overseas customers

by attending international shows such

as Tendence and Ambiente in Germany

and the British Craft Fair and the

International Spring Fair in the UK,"

says Szymanska. "The company has

been funded 80% from our own

savings, with the remainder coming

in the firm of an employment grant

from Laois enterprise board."

Suzanne WoodsArroo

Suzanne Woods was a director of an arts centre in Sligo before she

set up Arroo, her fashion and home accessories business, in 2005. The

company’s product range spans felt brooches, velvet corsages, room

screens and wall-hangings, all of which Woods makes herself. The

products are sold in craft and gift shops around the country and also

through Arroo’s website. Having studied arts and crafts in the US for

years, Woods says that by setting up Arroo she was fulfilling a lifelong

desire. "For a product like mine, people need to be able to see and

feel it rather than just see it online," says Woods. "There's a lot of

legwork involved in sending images and samples and in finding places

suitable for selling your product. The easiest way is to attend trade

fairs as people like to see and then consider your product. I've availed

of two small grants from Leitrim enterprise board and one very small

grant from the Crafts Council to attend a UK trade fair."

Edyta Szymanska and Chris Piekarz, Ceramic Art & Sculpture

continued on pag

Suzanne Woods, Arroo

CRAFTS

Tony CollinsGenesis

Mullingar-based Genesis was founded by Tony Collins in

1988 after he quit his job as a toolmaker in the plastics

industry. Genesis manufactures bronze sculptures for the

giftware market and distributes interior products such as

lighting, mirrors and home furnishings. According to

Collins: "We sell our products through retail outlets and

interior designers in Ireland, the UK and Europe, and

through distributors in the US and the Middle East.

Valerie Roberts Val Designs

After five years working as a jewellery designer for

Avon, Valerie Roberts set up her own company, Val

Designs, in Portlaoise. The firm makes made to

measure one-off dresses, with an emphasis on the

bridal market, and was funded initially by a grant

from Laois enterprise board. Roberts explains:

"We are advertising in all Irish wedding magazines

and doing bridal fairs in hotels in order to target

brides-to-be directly. We have just opened a new

showroom in Abbeyleix. While we don't sell

online, our website allows our customers to access

all our information. We plan to sell the collection

outside Ireland and will soon participate in the

British Bridal Exhibition in London. The enterprise

board is funding 50% of our trade fair costs."

Wendy KnightWendy Louise Design

Wendy Louise Knight set up her hat design company in 2006,

having previously worked in retail for the Body Shop and

Karen Millen. Knight produces hats for both private clients

and for wholesale and sells her items from her showroom in

Newtownforbes, Co Longford, as well as shops and galleries

around the midlands. According to Knight: "I was able to get

funding from the Longford enterprise board. Growing sales

requires that you are totally committed to your company and

believe in your product. I'd encourage other startups to take

all the free advice available. Networking is crucial and winning

good customer feedback is also worth its weight in gold. I

feel privileged to work at something I am passionate about

and be able to pay the bills at the same time." Knight and

Eileen Abbott engage in joint marketing on Facebook.

Wendy Knight, Wendy Knight Design

Valerie Roberts, Val Designs

Sharon Reilly at the Genesis trade stand

CRAFTS

Eileen AbbottEileen Abbott Design

It's a long way from the world of office management and

working as a PA to that of fashion design. That was the

leap made by Eileen Abbott in 2004 when she set up her

own clothing company, designing made-to-order bridal

and evening gowns. Mother-of-four Abbott used bridal

magazines to advertise her business at the start, followed

by bridal fairs and fashion shows. She explains: "Word of

mouth seems to be the best form of advertising. To start

with I received a grant from Leitrim Partnership for my

machines and as I went along I got support from Leitrim

enterprise board. This year I received support from

Leitrim Development Company to do Showcase. Leitrim

Design House in Carrick-on-Shannon is also a great

champion of Irish design does a lot of work to support

designers and artists."

Georgia ScottGeorgia In Dublin

Georgia In Dublin was founded in 2009 by Georgia

Scott, a former project manager for a healthcare

company, and her dress designer mother Nicola.

The Dublin firm designs high visibility rainwear for

women that is suitable for walking and cycling.

According to Scott: "We aim to achieve a marriage

between the aesthetic and the functional, to make

safety sexy and encourage environmentally

conscious lifestyles. We presently only sell our

products in Ireland but through Showcase we were

able to make contact with German and Japanese

agents. We were awarded a feasibility grant by the

Dublin City Enterprise Board. I would encourage

state enterprise bodies to be as visionary as is

feasible."

Georgia Scott,Georgia In Dublin

Eileen Abbott, Eileen Abbott Design

Initial penetration was through attending trade fairs,firstly

in the UK and then in Paris, Frankfurt, Milan and

Stockholm. Although this is expensive, we have found it

to be most effective. The key fairs in the US are the New

York Gift Show and the Atlanta International Gift Market.

Advice from Enterprise Ireland was essential, especially

in the early stages and when we first started to export

as they have offices on the ground in these countries."


THE WAY I WORK

TARA DALRYMPLE

leads and conduct more social marketing. Evenings are takenup with client meetings, or committee meetings. I’m acreature of habit and I’m extremely organised. I have adefault diary where I block out repetitive and essential work.Mondays are always spent on social marketing, leadgeneration, team conference calls and finance. Wednesdayafternoons are spent on PR and promotions and on Friday Iupdate our systems and processes. The last Friday of eachmonth I run a networking group called Simply Businesswhere we do exactly what it says on the tin: network and getout, simple as that. Tuesday and Thursday are my actiondays, where I tend to meet new leads and clients face to face,run errands for our social concierge clients as well ascatching up with myself.

Having a degree in IT, I am a complete nerd when itcomes to either anything electronic or anything that makesmy life easier. I am something of a PDA addict and recentlyupgraded from the O2 XDA to the Nokia E63. I am gettingused to the smaller keys, but loving the functions andcapabilities it has. I use as much freeware as I can - SugarCRM, www.filejumbo.com and Skype to name but a few.

In terms of relaxing, I find it very difficult to sit still. I amfull of nervous energy and if I sit down for too long my footstarts to shake. I relax by catching up with housework andgardening. I come from a family with green fingers and Igrow my own organic herbs, fruits and vegetables. I am areal Martha Stewart (without the jail sentence) and was givena sewing machine for Christmas with which I’m makinglavender bags, curtains and cushions. I love to decorate too.

I’ve read two books so far this year: The Angel’s Game byCarlos Ruiz Zafon and PopCo by Scarlett Thomas. I likemodern fiction and have a penchant for Chinese andJapanese literature. I don’t get time to read the weeklies, butgrab the Sundays when I can. I tend to get Google alerts ontopics that are of most interest to me on a personal andprofessional basis.

From the age of nine I have been inspired by the late andgreat Anita Roddick. She was out there fighting for peopleand the environment when corporate social responsibilitywas not as high profile as it is now. Being dyslexic I havealways looked up to Richard Branson, who has overcome somuch despite being both alpha and numerically dyslexic.

Busy Lizzie was a business idea that I brought over fromthe UK five years ago. I undertook a year’s market researchbefore I launched the company. I started out in a spare roomin an apartment in Galway city. The company has expanded

into Dublin, Wicklow,Cork and Limerick. Iendorse the work/lifebalance that mycompany provides byworking from homeand educating Irishwomen through mymonthly podcast onhow they too canachieve a healthybalance between workand home.

Being abusinesswoman is agreat occupation. Iknew that I would always run my own company - my familyare all entrepreneurs and these skills have been learnt viaosmosis from a very early age. I believe that being anentrepreneur is something that you cannot learn; it has to be

inside you. Wethink, act andresponddifferently.

I am not intodoom and gloom.I always think ofthe positive andfollow a mantra of‘givers gain’. But I

feel extremely saddened by the way that Ireland is being runat present. I feel that the SMEs, the real backbone ofIreland, are being penalised through no fault of their own.We are burdened by others’ debt. We contribute to ouremployees’ social insurance but we are not entitled to anyfinancial support if something happens to us, or if ourcompanies go down the tube. I feel the government shouldtalk to business owners, to get us to create think tanks andcome up with suggestions about what needs to be cut andwhat needs to stay. I also feel that successful business peopleshould be encouraged to give talks in schools about businessand instil entrepreneurial spirit into our future leaders.

Tara Dalrymple is the founder of Busy Lizzie LifestyleManagement, which provides services including bookkeeping,corporate concierge and secretarial services to SMEs.

In the morning I unwind and spend time with my sonas I tend to work late in the evening when he has goneto bed. I check my emails first thing and deal with anyurgent calls from the previous day that I didn’t have

time to answer. In the afternoon I make sales calls, chase up

Busy Creature Of Habit

If I sit down for too long my footstarts to shake

SURVEYMARCH 2010

Accountants

“Overdraft facilities are being converted into term loans without negotiation”“Unless the debt laws are changed, we could lose a generation of achievers”

“For many companies the outlook continues to be bleak”“There has been a notable increase in fraudulent activity”

“Only very strong business propositions are getting new credit”“The demand for bank debt is falling significantly”“There is window dressing going on with the banks”

MKO Partners, Chartered Accountants & Registered Auditors, is a boutique Firm of Advisors withBig 4 experience delivered with niche expertise and service. We provide the following services:

Corporate Advisory & Audit I Corporate Finance I Tax I Training & Consulting

With a focus on the following markets:

Financial Services | International Business | Property | Corporate

6, The Courtyard Building, Carmanhall Road, Sandyford, Dublin 18

Tel: [+353-1] 2933 400 E-mail: [email protected] Web: www.mko.ie


Jim Stafford Friel Stafford

Theeconomicturndown ismore severethan mostcommentatorsrealise. Itwould appearto us fromoperating atthe coalface ofadvisingdirectors ofcompanies indifficulty that we are no more thanapproaching the half-way mark in thiscycle and that in 2010 we are into a newphase with bigger challenges. To datewe have mostly seen thinly capitalisedcompanies enter insolvency. This yearwe are seeing larger companies underthreat. These larger companies werefinancially fat in 2007 but that fat hasbeen eaten away by trading losses andsubstantial bad debts.

We are now seeing individuals andbusinesses who were meeting interestonly facilities out of savings nowrunning out of those monies and notbeing in a position to continue to meet

interest payments, not to mentioncapital repayments. Their lack ofsavings, combined with possible interestrate increases and tenants seeking rentreductions, is leading them on the pathto insolvency. While the banks havesignificant problems with their Namatype debt, they are about to encounter acascade of smaller customers who havesimply ran out of cash.

There has been a notable increase infraudulent activity, which has beeninduced by people’s need to meet callsfrom the banks to meet loanrepayments. This fraud is manifestingitself in various ways, from peopleselling leased assets and spending thecash, to fictitious invoices being raisedon invoice discounting facilities.

Peter Carroll BDO

There is still doubt about whether wehave hit the bottom. Real estate has notbeen moving at all and there may befurther adjustments necessary onceNama completes its deliberations.Consequently, I would say thatconsumer confidence is in a holdingpattern and it may very well be subjectto a further decline. So we are in a veryfragile position.

Ourexperience isthat a lot ofbusinessesrecognise thatthe availabilityof credit is nolonger certain.They havechanged theirbusinessmodel and areseeking to cut costs to improve theworking capital cycle. Consequently thedemand for bank debt is fallingsignificantly. The banks are now seekingto impose clear, transparent and in somecases very stringent financial covenants.The reality is that many businesses arestruggling to come to terms with thesenew requirements at a time when theyare also changing their business models.

The government needs to support theNama project so that we have certaintyin relation to its impact on bankingliquidity. That needs to be the singlepriority. The government should alsosimplify its strategy for growth andclearly demonstrate that there is a clearplan to bring economic activity that willsupport jobs. The smart economythinking needs to be revised andsimplified so that confidence can berestored.

‘The banks will encounter a cascade of small customers who have simply ran out of cash’

Accountants are at the coalface of business. NICK MULCAHY canvassed partnersfrom large and smaller practices for their views on prospects for the economy,

bank lending and what the government should be doing to revive businessactivity and restore confidence


Tadhg O’SullivanOSK

This is themost severeeconomicdownturn inlivingmemory andcertainlysomethingthat hasnever beenexperiencedby themajority ofour working population. I think thatwe have some way to go and depending on the particular industrythat you are in there may be a furtherdecline. The construction and propertydevelopment sectors are still veryuncertain particularly in light of

what effect Nama will have.There is a tightening of credit lines

across the board. In general clients arehaving their existing facilities renewedbut I cannot see any evidence of newfacilities forthcoming. In some waysyou cannot blame the banks as they arealso nervous, particularly with certainsectors. The best way for thegovernment to restore businessconfidence is to get people back towork. Consumer spending will be thecatalyst to growth.

Jim MulqueenFGS

The economists are predicting that wewill bottom out sometime this year, andwe notice a certain level of optimismamong our client base. Being realistichowever, while the economy showssome sign of improvement, for many

specificsectors andcompanies theoutlookcontinues tobe bleak.

There iscertainly aperceptionthat bankshave littleappetite toextend creditto businesses, but it all comes down torisk apportionment. Banks tooksignificant risk in the past and look atwhere that has got us. Now it’s verysimple: they want to see a more detailedproposal, tangible security and visibilityon repayment capacity. The banks havenow probably swung too far the otherway and become over-cautious in termsof risk appetite. But we would expect

Survey continued on page 62

YOUR NEEDS. UNDERSTOOD.

Putting your business at the heart of our business for over 25 years.

www.bdo.ie

BDO is authorised by the Institute of Chartered Accountants in Ireland to carry on investment business. BDO is the brand name for the BDO International network and for each of the BDO Member Firms. BDO, a partnership established under Irish Law, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent members firms.


that this to improve as the economy andbusiness confidence generally improves.

The government need to get on withit and not lose any momentum. Thefirst step should be to restoreinternational confidence in Ireland,relative to the other non-performingeuro countries. This essentially meansthat we are being seen to tackle theissues we have, and that the measuresare viewed as being credible. Whilethere have been some initiatives in thepast year within the SME sector, moresupport funding needs to be provided,as the amounts advanced to date areminimal compared with the amount ofmoney invested in supporting thebanking system.

Pat CullenDeloitte

I think there is a general consensus thata return to growth in the economy willtranspire in late 2010 and into 2011.There are a number of positiveindicators to support this. Firstly,Ireland’s competitiveness is improving.In addition, Ireland is continuing to

attractforeigninvestmentand 2009 wasa particularlypositive yearin this regard,compared to2008. TherecentDeloitte CFOsurvey for Q42009 found that there was an increasingoptimism among Irish CFOs. Havingdealt with cost reduction and workingcapital management, they are nowbeginning to feel more confident abouthow they can help position theirbusinesses for growth.

Bank finance is still available in manycases where proper business plans areprepared and the overall propositionmakes sense. However, it is clearly thecase that credit is much more difficult toobtain even for very good projects. It istaking longer to negotiate the facilitiesand the costs of the credit aresignificantly higher. There areundoubtedly cases where credit wouldhave been available in the past but,

because of the new approach to theevaluation of risk and the more difficulttrading background in the economygenerally, those enterprises cannot nowobtain funding.

The government can do a number ofthings to underpin confidence returningto the economy generally. A keyelement is to give proper leadership, andbe seen to be on top of the variousissues which challenge the economy. Itis also vital to set out a clear signpost forthe next two to three years in relation tothe approach to taxation and spending,so that individuals and consumers canget a clear picture of what their ownsituation is likely to look like in themedium term. Being seen to take someaction on the jobs front is also vital.This could be a combination ofincentives to employers, as well as someelement of loan guarantee to allow newbusinesses to get access to credit.

Jacinta Kelly Devaney and Durkin

There are numerous businesses on thebrink with impaired loans, distressed

We depend on the quality of our people. We choose them for their flair, commercial acumen and dynamic approach. Our people work as a cohesive team – with our clients and with each other – because they share our aims and commitment to provide quality business solutions and advise for every one of our clients, on the good days and the not so good days.

Taking your business personally.

An Independent Member of Baker Tilly International

Trinity House, Charleston Rd, Ranelagh, D6 | T +353 1 4965388 | E [email protected] Technology Centre, Birr, Co. Offaly | T +353 57 9125662 | E [email protected]

www.bakertillyrg.ie


cashflow andnegativegrowth.Addressingthesechallengesrequires asubstantivecommitmentfromgovernmentagencies toimproveIreland’s competitiveness, innovationand access to capital. There is a degreeof window dressing going on with thebanks, where for instance loans areonly approved if 50% is placed ondeposit. Generally though, if a clientcan demonstrate that they have thecapacity to repay then finance isavailable, albeit with stricterconditions.

We need to see from the governmenta greater emphasis on stimulus

packages and a real focus on restoringIreland’s competitiveness. There are asignificant number of high net worthindividuals in Ireland with large cashreserves. Changes in inheritance andgift tax legislation could stimulate theflow of enterprise venture capital.Equally if we are truly committed to asmart economy future, theninfrastructure deficits, such asdeployment of broadband, should beradically addressed.

Terence O’RourkeKPMG

There’s a sense that we’re no longer infreefall but that we still have to get togrips with some issues. The cost base isgetting more competitive but there’sstill work to do. It is important that thependulum doesn’t swing too far interms of banks’ caution in extendingnecessary credit to viable businesses,

and we have seen evidence of this inour dealings with some clients.However, it is understandable thatbanks are exercising prudence at thistime as theywork throughtheir currentdifficulties.

Thegovernmentneeds to makedecisionsquickly. It issending outthe rightmessage andwe’ve alreadyseen the benefits of this in terms ofrebuilding our international reputation.We need more of this approach. Itclearly gets results and the businesscommunity welcomes energy and pacein policy making and inimplementation.


Hugh O’NeillHogan & Associates

Some sectorsof theeconomy areperformingmuch betterthan others.We representa largenumber oftechnologycompanies andthis export-driven sectorhas been performing better thancompanies focused on the domesticmarket. Some banks are receptive toconsidering financing for well-managedcompanies with growth potential, butthe risk profile has changed and gettingapproval is difficult. We have seencompanies that we believe provided anacceptable risk profile that did not getfinancing. But we don’t believe that thisis much different to 20 years ago, whenobtaining trade or project finance waschallenging too. In fact it’s slightlyeasier now to get trade finance, as for anumber of years the banks were reallyonly interested in any financingproposal backed by property.

The government needs to dosomething about our bankruptcylegislation. There are manyentrepreneurs (not just propertydevelopers) who made poor decisions

during the boom years and are nowsaddled with large debts. Many will saythat society should not bail out thesepeople. However there are hundreds,maybe thousands, of highly educatedand entrepreneurial people in their early30s with significant negative equity whoface the possibility of being saddled withthis debt into their 60s. These peopleare the very people who could start newbusinesses and create the badly neededjobs. Unless the debt laws are changed,we could well lose a generation ofachievers who could move abroadbecause of those laws.

Joe CarrMazars

While theBudget andrecentFinance Billdemonstratedto the outsideworld that thegovernment isbalancing itsbooks andIreland istaking itsproblemsseriously, they didn’t lay out as clearly asthey could have a clear vision for thefundamental change that Ireland needs.The government needs to articulatewhere Ireland’s future sustainable

position will be and what our prioritiesare. Ministers need to seize theopportunity demanded by the currenteconomic crisis to articulate andchampion a different way for ourpeople, our society and our economy inorder to bring back confidence bothdomestically and internationally.

John GlennonBaker Tilly Ryan Glennon

We need to keepthings inperspective. Thereare 500,000 morepeople nowworking than in1997 and we havemade considerableadvances with ourinfrastructure.2009 was the yearof blame andanger and I think2010 will become the year of solutions. Ithink the world economy will slowlyrebound and Ireland will follow.However, I don’t think the recovery willbe dynamic because of the level ofdeleveraging and restructuring ofbusiness that needs to be done. My viewis that the process will take two years.

Even a year ago it was believed thatcustomers would return to their oldbehaviours as soon as a pick-up was




What’s your advice to SME owners who have substantialcash reserves but who are now trading at a loss?

Mike McKerr (Ernst & Young): Tightenfinancial control and embed these behavioursthroughout the organisation. Don’t ignorethe top line - realise the importance of eacheuro of incremental revenue to the bottomline and take the opportunity to refocus oncore. Keep talking to your people. It’s a verytough and uncertain environment and it hasnever been more important to have openand honest communication.

Anne Brady (Anne Brady McQuillans DFK): It isn’t prudent to live off reserves in thehope that the recovery will take hold soon.Businesses need to be operating from a coststructure that’s sustainable in current tradingconditions. They need to eliminate thoselosses.

Tadhg O’Sullivan (OSK): They should putspecific plans in place to ensure futureprofitability. If the business cannot bereturned to profitability, they should considerclosing down the business. There are manynon-financial issues that have to beconsidered before this decision is made.

John Glennon (Baker Tilly Ryan Glennon): I think all businesses need to work on theirbusiness plans to reinvent their companiesfor the ‘new normal’ environment. Asbusinesses climb out of the recession the

focus will be on reinvention andtransformation, a more customer focusedbusinesses. Then, the really hard question -what next? Innovation will be central. Thismeans reassessing every aspect of what it isthey do. It may mean working with clients todevelop products or services in such a way asto make them more compelling. If howeverthe downturn has taken its toll to the extentthat you are now trading at a loss, my bestadvice is to proceed with caution. Calling it aday is the most difficult decision any entrep-reneur can make but often one of the wisest.

Cathal O’Donoghue (Wallace O’Donoghue):Each business model needs to be examinedon its own merits. Voluntary liquidation isoften the best economic and tax solution butclients can be very emotional and delusionalabout their situation.

Jacinta Kelly (Devaney and Durkin):Immediate action has to be taken to returnto profitability whether that means cuttingcosts or scaling back activities. In ourexperience SMEs have already trimmed backand are resolutely focused on working capitalimprovements to fund growth. Often it is top-line growth initiatives that get overlookedwhen businesses are in fire-fighting mode,and even basic marketing measures in areasof promotion, collaboration and networking

can pay dividends in returning a business toprofitable growth.

Jim Mulqueen (FGS): I’m not sure there aremany such companies out there. The soleobjective should be to manage costs andworking capital tightly and preserve cash asmuch as possible. Once the economy isshowing real signs of improvement and lessvolatility, then these reserves can be appliedin growing the business organically, or moreaggressively through acquisition.

Ronan Murphy (PwC): Look at every aspectof their business and undertake a detailedreview of the operational effectiveness ofthe business with the objective of returningit to sustainable profitability. This shouldinclude identifying the preferred markets aswell as the key products and services. Itshould include a review of customers,suppliers and margins and loss-makingbusiness areas should be identified. Areview of the supply chain, all direct andindirect costs as well as people costs toachieve greater value should also beperformed. Quality information systems will be critical and no time should be lostmaking decisions. It is also critical in thecurrent environment to maintain frequent,direct and candid communications with your lenders.

Gerry McInerney (McInerney Saunders):Eliminate their trading losses immediately.That generally means drastic reappraisal ofthe business and how it is structured. Takeaction now before the cash reserves aredepleted. Take advice.

Pat Cullen (Deloitte): The key issue is to getthe business back onto a sustainable footingwhere it is not incurring losses. Arestructuring programme must beimmediately put in place with a view toturning around performance. This programmemust focus on the cost side in terms ofreducing the overall level of cost to a levelappropriate to the size of the businesscurrently, but must also focus on thecompany’s revenue and ensuring that allsources of revenue are maximised anddecline in revenue is halted and reversed ifpossible. If properly restructured then therewill be the opportunity to take advantage ofthe upturn when it comes about.

Peter Carroll (BDO): They need to examinewhether they have taken all the stepsnecessary to reduce their cost base and make

it consistent with the new level of demandand gross profit that they can plan for. All oftheir time and energy should go intoensuring that there is a new business model.In some instances we are working withclients where they are seeking to consolidate.This should not be ruled out - many sectorshave too many competitors who do notenjoy economies of scale so that should beexamined in terms of a strategic goal. Acertain level of those cash reserves should beset aside for clear investment to rebuildbusinesses. But it is also important that theylook at tax efficient ways of making specialdividends to the shareholders who may needto de-risk where they are at the moment.

Paul Wyse (Smith & Williamson Freaney):Most SME owners who have substantial cashreserves should be able to trade out of thecurrent downturn. However SME owners whoare close to retirement should think in adifferent light. But it is a very difficult time tosell businesses as there are very few bankswilling to support mergers and acquisitions atthis time, and multiples used in sellingbusinesses are much lower. From an

investment perspective, during periods ofdeflation and low interest rates, cash reservescan offer a sensible hedge against risk.

Hugh O’Neill (Hogan Associates): We havehad some clients particularly in the propertybusiness whose business models are nowdated in the current climate. In these caseswe have helped them wind up their businessand take their accumulated profits out beforethey are used up.

Jim Stafford (Friel Stafford CorporateRecovery): Prepare a business plan for thenext two to three years. The business planshould make realistic assumptions in terms ofinterest rates, pressures on selling price,impact of competition, projected marketshare etc. The biggest mistake that weroutinely see in business plans is that thebusiness owners assume that theircompetition will not react to new competitivemoves - they do! If the business plan showscontinuing losses which cannot be stemmed,then the directors should consider an orderlywind-up of the business.

Fluent across 140 countries?Wherever our clients are in the world, whatever industry they’re in, it’s vital we truly know their market. We’ve built a team of 144,000 professionals to help. They understand the assurance, tax, transaction and advisory needs of businesses across 140 countries worldwide. And because they understand these markets and beyond, they are better placed to help our clients achieve their potential no matter where that may lie.

What’s next for your business? www.ey.com/ie

© 2

01

0 E

rnst

& Y

ou

ng

. A

ll R

igh

ts R

ese

rve

d.


detected and the credit crunch eased. Infact this may not be the case. The onlyprediction that can be made with anycertainty is the fact that value will remaina watchword in both consumer and B2Bmarkets. Businesses must prepare forlong-term, fundamental changes inconsumer and business behaviours.

The availability of finance is still amajor concern for all businesses andthere are many more hurdles to jump infinance for sound business investments.The reality is that for some time bankswill be involved in a deleveragingprocess and will be far more selectiveabout the transactions they finance.This is a real constraint on recovery. Itis more important than ever to manageshort-term cash within businesses and tokeep communicating with your bank

Mike McKerrErnst & Young

The recession has been very severe andunfortunately the effects will be felt for

some timeyet. Cautiousoptimism willbe counteredby pressureon the publicpurse andwithconsumerincomesforecast todampen theprospects of a strong recovery in theshort term.

The banks are in a very tough place.They need Nama up and running toclean up their book of business andonly then will we start to see moreliquidity in the market. Only verystrong business propositions aregetting new credit. Banks are rollingover facilities for weaker companies.The paperwork and risk managementthe banks are imposing on clients hasincreased dramatically, elongating thetime taken to raise money.

To help ensure confidence in Ireland’seconomy, it is important for

government to intercede whennecessary but to step back when thetime is right to allow market forces torun their course. The governmentshould harmonise our regulatoryregimes to help enable easier globaltrading and ensure we maintain anattractive fiscal environment with lowcorporate tax for business.

Paul WyseSmith & Williamson Freaney

While thereis no doubtthat 2010 willbe a difficultyear, I amhopeful thatthe economyhas touchedbottom.However theseverity of thedownturn andthe lack ofcredit will cause severe problems and


38 Main Street, Swords, County Dublin, Ireland.

T: +353 1 840 4029 F: +353 1 840 7496 E: [email protected] W: mcinerneysaunders.ie

• advisory

• compliance

• management support

• outsourcing

• wealth management

Chartered Accountants & Registered Auditors

continued from page 64

result in further redundancies andbusiness closures. Although Ireland’sdebt levels are very serious,international markets perceive awillingness in Ireland to deal with ourproblems and become more competitiveagain. The recent strengthening ofsterling is also welcome from Ireland’spoint of view as the UK is our majorexport market and this should help thefood industry in particular.

Until the picture post Nama isavailable, the capital available to banksto lend on will be very tight. It will takesome time before we will see anyimprovement. This is obviouslycontrary to what businesses need at thistime, as debtor payment days areextending out, reduced profits or lossesare being incurred and working capitalis at a premium. The banks have soughtto reduce credit to businesses when theyneed it most, and they have sought toseek increases in margins and charge

fees when most businesses are trying toreduce costs and survive.

It is very important for thegovernment to deliver on its budgetsand to ensure that the national deficit isbrought under control. I would alsosuggest that the Department of Financeshould seek to encourage the banks toextend credit to businesses to ensurethat jobs are preserved and businessessurvive in these very difficult times.

Anne BradyAnne Brady McQuillans DFK

We’re actually feeling the economicdownturn more this year than last year.Last year it began to affect our clients.Now we’re feeling the knock-on effectas we’ve lost clients that were drivenout of business by the downturn.However, companies shouldn’t forgetthat Ireland is still a great place to do

business andthere aremanyopportunitiesthat may bemissed if theyadopt anoverlynegative view.The economywill definitelyrecover. Thechallenge forcompanies is identifying when thatrecovery will begin and how theyshould position themselves to benefitfrom it.

We’ve noticed banks adopting a newapproach whereby they change acustomer’s relationship manager so thatthe new one has no history with thecustomer and can be more aggressive inpursuing debt repayments. Our clients


CALL +353 (0)1 449 4400 VISIT www.mazars.ie

A U D I T A C C O U N T A N C Y T A X A D V I S O R Y C O N S U L T I N G

Mazars

Responsibility

Continuity

Independence

Integrity


have also experienced a centralising ofpower away from their local bankbranch towards its headquarters. It’staking far longer for business customersto get bank loans and for those thatalready have them their bank hasbecome far more demanding in terms ofthe amount of financial information itrequires when it comes to reviewingthat customer’s banking facilities.

Employment incentives introducedby the government in the past havebeen successful. There is a need topromote such schemes so thatemployers and employees alike aremore aware of them. We’ve alsonoticed that businesses that provideservices to state and semi-state bodiescan find themselves waiting for aconsiderable amount of time forpayment. If the government instructedthose bodies to pay their creditorsearlier that would serve as a significantcashflow boost to many businesses.

Gerry McInerneyMcInerney Saunders

Differentsectors are atdifferentstages in thedownturn. It’sdifficult togeneralise butsurvivors incertainsectors havecut wherethey couldand have tried to adapt to the newsituation and are actively seeking newcustomers in new markets as a platformfor growth. Other sectors are only nowfeeling the full impact of much tighterconsumer spending. While this isbenefiting some low-cost retailers,others are hurting and the pain is being

transferred back to suppliers andmanufacturers.

Banks are now cautious and whywouldn’t they be? They’ve been badlyburned and they have limited fundsavailable for lending. It can be verydifficult to justify banks advancing fundsto shore up working capital deficits thathave largely arisen from an inability tocollect debts within normal credit terms,or from significant reductions in volumeof sales. Traditionally banks haveprovided credit to fund expansion inworking capital due to growth and alsofor asset acquisitions. Neither ishappening at present.

The government should focus ondelivering positive messages on aregular basis. It should set out a short-term and longer-term vision of whereit wants the economy to be and ensureits spending is not wasted. Thegovernment should targetopportunities to stimulate activity in


the form of school renovations andother building refurbishment needs.Employ local architects, engineers andmechanical and electrical consultantsto oversee this work and eliminate anyexcessive red tape. Agree a budget andlet them at it.

Cathal O’DonoghueWallace O’Donoghue

The retail,motor,hospitalityandconstructionsectors arestill indecline.Howeverexportersand theICT sectorsare

experiencing a pick-up. The banksneed to get recapitalised before we cansee real economic growth. Strongestablished businesses may still getfunding, but bank margins andarrangement fees are increasing. SMEsare finding it difficult to increaseoverdraft limits. Many overdraftfacilities are being converted into termloans without negotiation.

The cost of doing business in Irelandneeds to be substantially reduced.Broadband penetration and quality isvery patchy. Government departmentsneed to be more efficient. For instance,it is taking far too long to issueredundancy rebates.

Frank KeaneMKO Partners

Most people agree the only way torecover is to attract money into oureconomy from abroad. The

governmentmust send amessage of itslong-termpolicy to keepIreland as aplace to dobusiness anduse all meansit can to getthe messagearound theglobe.Embassies,IDA andEnterprise Ireland should all promote a consistent ‘Brand Ireland’that exporters and professional services firms like ours can rally behind and leverage off. Any fiscalpolicies and support that helpentrepreneurs rediscover the spirit ofexporting will also help confidenceoverall.


Represented worldwide through IECwww.iecnet.net

Suite 138/139, The Capel Building, Mary’s Abbey, Dublin 7, Ireland.

T +353-1-888 0830 F +353-1-888 0833W www.wallaceodonoghue.ie E [email protected]

Offering a Professional Service to SMES, Professional Practices & Individuals

Our Services Include:• AUDIT & ACCOUNTING• BUSINESS ADVISORY• TAX COMPLIANCE & CONSULTING • CORPORATE FINANCE• COMPANY SECRETARIAL • PERSONAL FINANCIAL PLANNING

WALLACE O’DONOGHUEC H A R T E R E D A C C O U N TA N T S & B U S I N E S S A D V I S O R S


Chartered Accountants & Registered Auditors

Accountants of Choice

Audit & AccountancyBusiness Advisory Service

Taxation ConsultancyCompany Secretarial Advice

Dependable advice for challenging times

Iveagh CourtHarcourt Road

Dublin 2

T: 353 1 4786600F: 353 1 4750170

E: [email protected]: www.annebrady.ie

Descriptions are drawn fromsubmissions and the firms’websites. Fee income figurescompiled by Finance magazineare for all-Ireland (RoI inbrackets where disclosed). The fee figures mostly relate to 2008, some to mid-2009.

LISTING DATA

PricewaterhouseCooperswww.pwc.com/ieFee Income: €332mManaging Partner: Ronan MurphyRonan Murphy describes thecurrent market for accountancyservices as “extremelycompetitive”. He said: “The areasof our business that have seenstrong performance in the pastyear include businessrestructuring, cost control,performance improvement, rewardand pension planning and aidingForeign Direct Investment.”

KPMGwww.kpmg.ieFee Income: €308m Managing Partner: TerenceO’RourkeKPMG’s restructuring andcorporate finance teams havedone a “massive amount” of workassisting various organisationsrestructure their business,according to Terence O’Rourke. He

added: “It’s the same in auditwhere we’ve also been busyhelping clients through a morecomplex reporting environment.”For a third year in a row, in theannual Irish Times survey ofgraduate career choices, Irishgraduates named KPMG as theirpreferred employer of choiceacross the entire range ofindustries.

Deloittewww.deloitte.com/ieFee income: €160mManaging Partner: Pat Cullen Deloitte is still seeing very strongdemand for its services in audit,consulting, corporate finance andgeneral advisory services, says PatCullen. He added: “We are seeingvery strong focus on services suchas outsourcing, IT consultancy andbusiness planning services, as wellas systems to deal with risk andregulation.” The firm has beenlauded for reducing its carbon

footprint and was named winnerof the European M&A TaxTransaction of the Year Award byInternational Tax Review in 2009.

Ernst & Youngwww.ey.com/ieFee Income: €144mManaging Partner: Mike McKerrMike McKerr took over from PaulSmith as managing partner in July2009. Says McKerr: “Ourproductivity is up and ourtransactions and advisorybusinesses are still performingexceptionally strongly. Ernst &Young is the only Big 4 firm to haveintegrated practises in Europe,Middle East, India and Africa andthis not only gives us access togreater breadth and depth ofexpertise to bring to our Irish clientsbut has also increased our own costmanagement. We’ve a positive storyto tell and have managed toachieve this without drastic price orheadcount reductions.”

BDO www.bdosx.ieFee Income: €68.8mManaging Partner: Peter CarrollBDO has dropped ‘Simpson Xavier’from its brand and Peter Carroll seestax, audit and funding advice as keypractice areas going forward. Headded: “Telecoms Media andTechnology is a sector that wecontinue to perform strongly in. Thegreen economy, and principallygreen energy, has become anincreasingly vibrant sector.Healthcare also continues to enjoy aperiod of sustained capital spendwhich is underpinning demand foradvisory services.” Practicehighlights from 2009 include raisinga €5.7m BES fund, advising on 12corporate transactions as well ashandling five transactions related tothe examinership process.

Grant Thorntonwww.grantthornton.ieFee Income: €56m (€43m)


AccountantsWho’s Who

1 Ontario Terrace, Portobello Bridge, Rathmines, Dublin 6t. 01 496 4022 f. 01 496 4847 e. [email protected]

- AUDIT & ACCOUNTING

- BUSINESS ADVISORY & MARKETING SERVICES

- TAXATION CONSULTANCY

- PERSONAL FINANCIAL PLANNING

- INVESTMENT ADVICE

- MERGERS & ACQUISITIONS

Partners: Richard T Durkin FCA, AITI, QFA Patrick Devaney FCA, AITI, QFA

“Where results add up”

www.devaneyanddurkin.com

Managing Partner: Paul RaleighThe firm has over 400 partners andstaff and operates in Dublin,Limerick and Kildare. Clientsinclude privately held businesses ,public interest entities and financialservices. Grant Thornton’sInternational Business Centreprovides a gateway to theresources of the Grant ThorntonInternational global organisation.

FGSwww.fgs.ieFee Income: €35.4m (€25m) Managing Partner: Jim MulqueenFGS’s corporate restructuring andinsolvency department are seeing“significant growth”, according toJim Mulqueen. He is also expectinga buoyant performance in 2010from the financial services andforensics and litigation supportpractice areas. In 2009 FGS becamepart of RSM International, the sixthlargest international network.

Mazars www.mazars.ie Fee Income: €27m Managing Partner: Joe Carr Mazars has a diversified client basespanning corporate, institutional,government and SMEs. Says JoeCarr: “While the past year has beenchallenging with regard to feecompetition, our broad base ofclients and services allows us tocontinue to build from a verystrong foundation. We have hadmore extensive work in liquidationsand examinerships than in previousyears and our international workcontinues to grow.”

Horwath Bastow Charletonwww.hbc.ieFee Income: €16.6mManaging Partner: Brian Conroy

Russell Brennan Keanewww.rbk.ieFee Income: €13.4m

Managing Partner: Liam RattiganRBK has offices in Dublin, Athloneand Roscommon, and has 11partners and 200 employeesnationwide. Last year the firmappointed Derek Andrews asTaxation Director. Says LiamRattigan: “As the only regional topten accountancy firm in Ireland, weare ideally placed to understandlocal needs and markets while alsobeing able to offer all theknowledge and expertise of anational company.”

Baker Tilly Ryan Glennonwww.bakertillyrg.ieFee Income: €13.3m (€10.4m)Managing Partner: John GlennonRecent legalisation has improvedIreland as a destination forheadquartering companies and alsofor carrying out R&D activities. SaysJohn Glennon: “Through ourinternational network we haveworked with colleagues in bringing

new entities into Ireland tomaximise these reliefs.” BTRG’srecent hires include two newpartners in audit and tax and asenior audit manager. “This reflectsour continuing commitment toproviding specialist services to ourclient base,” said Glennon.

IFAC Accountantswww.ifac.ieFee Income: €12.7m

Moore Stephens Nathanswww.moorestephensnathans.comFee Income: €11.4mManaging Partner: Carl Dillon

Smith & Williamson Freaney www.swf.ie.Fee Income: €7.6mManaging Partner: Paul WyseCompliance is the main source ofincome at S&WF, according to PaulWyse. He added: “Our insolvency



underlying strength Solid support and

- at FGS, you get total focus

At FGS, we bring our extensive experience, sectoral insights andexpert guidance to assist your business in these difficult times.

Call FGS today.

www.fgspartnership.com Audit Tax Advisory

Dublin

t +353 (0) 1 418 2000

Belfast

t +44 (0) 28 9023 4343

Longford

t +353 (0) 43 334 1900FGS is authorised by the Institute of Chartered Accountants in Ireland to carry on investment business in the Republic of Ireland.

FGS is an independent member firm of RSM International, an affiliation of independent accounting and consulting firms.

Independent advice, expert transaction

executionHogan & Associates is a boutique firm of chartered accountants that specialises in fund raising and M&A advice for growth

technology companies. We leverage decades of expertise in technology and a profound understanding of technology businesses to provide objective, insightful and expert advice to business founders and shareholders. The quality of our advice, people, services

and processes has earned us our reputation for high success rates and an ability to achieve premium results for our clients.

45 Blackbourne SquareRathfarnham GateDublin 14

Phone : +353 1 4927400Email : [email protected] www.hogan-associates.com

and turnaround areas have alsoincreased their business during thisdifficult time. We introducedinvestment management servicesand this has been a strong area ofbusiness for us in the past 12months. We have also introducedforensic accounting services withspecialist IT skills into the practice.”

OSKwww.osk.ieFee Income: €5.6mManaging Partner: TadhgO’SullivanSome of the service areas indemand at OSK include businesssurvival reviews, renegotiating banklending, forensic accounting,commercial mediation, tax planning,Revenue audits and variousoutsourced activities. TadhgO’Sullivan added: “We havedeveloped niche areas of expertise– i.e. property managementcompanies, sporting bodies, pensionfund audits. We have also learntthat marketing has become moreimportant during these recessionarytimes.”

PKF O’Connor Leddy Holmeswww.pkf.ieFee Income: €5.5m Managing Partner: Donal O’Leary

Brenson Lawlorwww.brenson-lawlor.ieFee Income: €5.2mManaging Partner: Patrick Lawlor

Ormsby & Rhodeswww.ormsby-rhodes.ieFee Income: €5.1mManaging Partner: Geoffrey Lewis

McInerney Saunderswww.mcinerneysaunders.ie

Fee Income: €4mManaging Partner: GerryMcInerneyThe firm celebrates 30 years inbusiness this year and GerryMcInerney describes 2009 as a“tremendous challenge”. Headded: “To have come though thiswith a dedicated team focussedupon delivering excellent servicesto clients is an achievement initself. We have a partner team thatis enthusiastic and ambitious andare prepared to acquire newrelevant skills along the way toassisting our clients meet theirpersonal and business goals.”

OTHER ACCOUNTANCY FIRMSFEATURED IN THIS SURVEY

Anne Brady McQuillans DFKwww.annebrady.ie Partners: Anne Brady, Natalie KellyAnne Brady reports that her firm’smanagement accounts andoutsourcing services have beenperforming well. She explained:“We are moving towards cloudcomputing. We are offering ourclients remote access where we canlog onto their computers if theyencounter any problems. This savestime and money on both sides. Weuse a new portal for clients to pickup large files containing their datathrough a secure internet site.”

Devaney Durkinwww.devaneyanddurkin.comPartners: Patrick Devaney,Richard Durkin Found in 2000 by Richard Durkinand Patrick Devaney the Dublin-based firm caters for startups, SMEs,multinationals, sole traders and agrowing number of high net worth

individuals. Says Richard Durkin“We continue to add new clientsand have shaped our productportfolio to meet the challenges andopportunities our clients face. InNovember 2009 we added abusiness advisory and marketingdivision consisting of a team ofseasoned advisors who work closelywith our clients to execute practicalsolutions that create lastingcompetitive advantage”

Friel Stafford CorporateRecoverywww.liquidation.iePartners: Jim Stafford, Tom MurrayThe practice has carved out a nichein the area of personal solvencyand bankruptcy and is now one ofthe market leaders in this expand-ing area. Says Jim Stafford: “Wecould see what was coming in2007 and strengthened our teamsby recruiting experienced qualifiedprofessionals. We have now havefive distinct teams, each headed upby a qualified accountant.”

Hogan Associateswww.hogan-associates.comPartners: Paul McKeon, Declan Hogan & Hugh O’NeillHogan & Associates is a boutiquefirm of chartered accountants thatspecialises in advice for growthtechnology companies. Says HighO’Neill: “With a combinedexperience of more than 40 years intechnology financing and M&A, ourpeople have a profoundunderstanding of the market place.We are also skilled negotiators andexperienced dealmakers. Due toincreased demand for ourfundraising services, particularly inthe technology sector, we haveincreased our specialist team.”

MKO Partnerswww.mko.ieManaging Partner: AlastairMacDonaldMKO’s decision five years ago tofocus its expertise on providing ‘Big 4’ skills and experience to Irishcorporate and niche markets(occupational pension industry,financial services, regulation andforeign owned companies) is“yielding dividends”, according toAlastair MacDonald. He added:“Service line growth in accounting,corporate services, audit, tax andpayroll has been driven by our workwith the financial services and FDIsectors. We are also experiencingstrong demand for bespoke financeand accounting training.” Thepractice expanded headcount by25% last year and MacDonalddescribes the appointment ofDiarmaid O’Keeffe as partner as the“final piece in the jigsaw”.

Wallace O’Donoghuewww.wallaceodonoghue.iePartners: Cathal O’Donoghue,Alan LawlorAlan Lawlor joined the firm as taxpartner in September 2009. Saysfounder Cathal O’Donoghue: “Alanhas a wealth of experience in SMEtax planning and his appointmenthas greatly enhanced our ongoingclient support. The new revenuestream is leading to an expansion inbusiness while our competitors arecontracting.” O’Donoghue addedthat the firm’s focus is on protectingclient businesses. “Clients needadvice on credit control, costreduction and cash management,”he said. “We are also facilitatingengagement with bankers, Revenueand other stakeholders.”



The applications forconventional bank loans andoverdrafts, often seen as the

traditional option for raisingbusiness finance to SME businesseshave rapidly declined due toworries about restrictive eligibilitycriteria and the wide range of otherfinance options available, saysBibby Financial Services.

Graham Byrne, Sales Director forBibby Financial Services, said:“There are many alternative formsof funding available and Irish firmsmust consider all the options toensure the right fit for theirbusiness particularly in this currenteconomic climate.

Alternative Options“The good news is that banks arenot the only option for businessesin Ireland looking for a means toboost their financial stability asincreasing numbers are turning toalternative forms of finance suchas invoice finance as a flexible andguaranteed way of supporting theircashflow,” he said.

Bibby Financial Services is in a verystrong position with a €50mfunding pot available to help IrishSME’s improve their cashflowsituation. Unlike many otherinstitutions and banks that havetightened their belts to cope withthe current economic climate,Bibby Financial Services’ doors arevery much open for business.

Key BenefitsGraham Byrne explains six keybenefits for businesses consideringinvoice finance as an alternative toconventional bank finance:

● Invoice finance facilities are moreresponsive and are more flexiblethan bank loans and overdrafts

● Extensive credit history is notrequired; instead the sales ledgerof the business is used to secure itsaccess to funds

● Cash can be accessed as soon asyou invoice a customer - makingfinancial planning more predictable

● Invoice finance facilities reducethe time and resource spent oncredit management and chasingoutstanding customer payments

● Invoice finance improvescashflow, resulting in bettersupplier terms and more fundsavailable to pay staff wages andfund new orders

● Bad debt protection is availablemitigating the impact of bad debtcaused by the inability of acustomer to pay.

The lack of available financethrough 2009 caused issues formany businesses, and for many,invoice finance was a saviour. Theease with which firms can employthe services of an invoice financeprovider means that many arelooking for more flexible providersand turning away from therestrictive criteria many banks still impose.


® COMPANY PROFILE: Bibby Financial Services Ireland

Bibby Financial Services’Funding Pot For SMEs

Contact Details:Graham Byrne,Bibby Financial Services,3rd Floor, Heather House,Heather Road,Sandyford, Dublin 18Tel: (01) 297 4911Web: www.bibbyfinancialservices.ie

Graham Byrne, Sales Director

Alternative finance provider commits to €50m funding pot for Irish small and medium sized business


Accountants are following their ownadvice in tackling falling revenuestreams and increasing pricepressures during the current

recession. They have been cutting backon costs by reducing headcount andimposing salary cuts for partners andstaff. But accountancy firms have alsosought out and developed new growthactivities and cut back on marginalcompliance work where low-balling onfees has eliminated profits.

A Finance magazine survey lastautumn of the largest accountancy firmsin the country, which covered fee incomefor 2008 and some to mid-2009, revealeda decline in fee income of 6% to €1.2bn,the first decline in total fees sinceFinance’s survey began 22 years ago. Formost accountants, this was the firstdownturn in fee income they hadencountered in their careers.

Accountants say that even their better-managed client businesses are runningout of wriggle room as reserves areutilised trying to pay down debt levelswhich the banks are no longer willing tosupport. Reflecting a practice what youpreach approach to their own businesses,employment numbers in the top firmshas fallen further than fee income, withan estimated headcount reduction ofalmost 700 staff in the top 20 firms thepast year. Average remuneration is downover 7% across the board. Professionalsactive in corporate finance and taxationadvice relating to large transactions havehad to suffer even deeper cuts.

The race to the bottom in fee levelsaffects all firms, according to KPMGmanaging partner Terence O’Rourke.“There is a pricing floor at which qualitywill suffer and any diminution of quality isvery bad for the profession as a whole,” he

said. “The market for our services hasalways been competitive and clients havealways insisted on value for money. Butlike all businesses in this environment,we’ve responded to the market conditionsin terms of pricing , while at the sametime ensuring that the quality of our workcontinues to be best in class.”

Other leading accountants say the feesbeing demanded by some clients orpotential clients for audit work, for

example, are too low to justify taking onthe work. There is concern that theannual audit cannot command therequired level of diligence and attentionwhere fee levels have been cut to thebone.

Pat Cullen, managing partner atDeloitte, says the decline in the numberof business transactions, especially M&Aand property-related, has inevitablyimpacted on the fee income of

KPMG implemented 200 redundancies in 2009 and reduced pay, PwC cutsalaries of its 2,200 employees by 10% and Deloitte cut 70 jobs and trimmedsalaries by 10% too

Accountants FeelThe Recession Pinch

Clients are demanding lower audit fees from their chartered accountants and turnover at the big firms is down for the first time in

decades, writes JIM AUGHNEY


professional services firms. Cullen addedthat audit work has held up pretty well,though a combination of clients goingout of business and “extremelycompetitive pricing” is continuing toreduce audit fee income.

“Audit fees are back 5% to 10%.Clients are getting more for their moneyon the accounting and cashflowmanagement side. Tax advice is worstaffected, as tax tends to be linked totransactions. There is obviously anincreased focus on price as our clientslook to try and reduce their costs.”

The firm introduced a voluntaryredundancy scheme in the first quarter of2009, bringing headcount down by 6%and has not cut back since. And Deloittecontinues to recruit graduates, a moveCullen describes as “fundamental to thefuture”.

According to Joe Carr, managingpartner of Mazars, the market foraccountancy services, tax, business

advisory and consulting has become“significantly more competitive,particularly in relation to fees”. In Carr’sopinion: “Clients expect to see discountsto fees and a demonstration of value for money. However many clients arewilling to pay for specific expertise and experience and have a greaterappreciation of the assistance that expertscan provide. So our business continues tothrive, particularly in key areas where wehave extensive experience.”

McInerney Saunders partner NealMorrison said clients are looking at alltheir costs and reducing audit fees is one

target. He added: “We are providingmore strategic business advice. A lot ofour clients are SMEs and some of themdid not need to pay attention to cashflowmanagement or management accountsduring the good times. Now they wantup-to-date management accounts for thebanks in order to make the correctdecisions.”

McInerney Saunders will not be hiringgraduates this year, reflecting the factthat most newcomers to accounting take18 months to begin paying their way.“We do insolvency work and that’s notsomething you can start doing fromscratch.” However the recession canbring opportunities for accountancyfirms too, according to Morrison, asclients of larger accountancy firms shoparound for better value.

Jim Stafford of Friel StaffordCorporate Recovery said his firm hasbecome more selective about what work


‘Clients expect tosee fee discountsand value formoney’

The CCH ProSystem Suite includes:

■ CCH Central - a client and contact practice database

■ Accounts Production

■ Audit Automation

■ Practice Management

■ Document Management

■ Tax - Personal & Corporation

■ Strategic Planning

Whether you’re looking to build client relationships, improve your firm’s profitability, develop new revenue streams or reinvigorate your business processes, CCH Software can help visit www.ie.cch.com or call us on 01-4097341

With a full range of compliance and practice management software already in use in over 3,000 firms in Ireland and the UK, the CCH ProSystem Suite is the first choice for professional accountants

they take on because hotels, land andother property assets are very difficult tosell. “It’s very difficult to get decisions,”he said. “Our clients are satisfied that wehave the necessary skill sets to add valueto their business, and that our feesrepresent good value for money.”

John Glennon, managing partner ofBaker Tilly Ryan Glennon, acknow-ledged that fee levels have declined,particularly in the compliance areas ofaudit and tax. He added: “Consultingservices offering integrated solutions tobusiness problems are still in demand.We’ve had to be flexible on pricing butoverall there is greater need for qualityinformation for businesses and theirbanks. We will take on more graduatesthan last year but it will be down on the peak.”

Anne Brady, managing partner of AnneBrady McQuillans, said her firm’s staffcomplement has been reduced from 33 to26. The firm used to pay a bonus to staffwho introduced work to the firm but nowthat bonus is only paid if the work turnsout to be profitable.

She added: “Most clients have askedfor fee reductions on previous years andwe have reduced our fees across theboard. We are much more aware ofactively managing the business and wework at getting the money in faster.”Brady’s firm took on four graduates lastyear and this year the firm will take onanother three graduates. “Over the longterm the firm needs people with differentlevels of experience,” she said.

Tadhg O’Sullivan, managing partner ofOSK, notes that all companies areconscious of trying to decrease costs andthis has resulted in greater pricecompetition for all accountancy firms.“Our firm has lost very few clients but wehave had to give price reductions in anumber of cases particularly whereclients are in difficulty,” said O’Sullivan.“The majority of clients value therelationship and our service and thereforea cheaper price elsewhere is not the onlyconsideration.”

BDO managing partner Peter Carrollhas no appetite for chasing audit and taxwork where the fee on offer is rockbottom. “We have revised our charge outrates but we are working with people with whom we have long-standing

relationships,” he said. “By agreeing earlythe scope of assignments and respectingthe fact that they need to make a costadjustment, we are taking out the elementof surprise in our charging structure,which is the greatest issue that peoplehave. We want to ensure that clients whoneed help will pick up the phone and notbe put off by our billing system.”

Jacinta Kelly, head of business advisoryservices at Devaney and Durkin, said herfirm has not experienced any real clientchurn. She added: “We have sought toadjust our business model and introducea suite of value-added products andservices to meet the challenges andopportunities our clients face. We haveadded a consulting business andmarketing division with performanceand, in some cases, equity-based feestructures that both existing and newclients have responded to positively.”

At FGS, managing partner JimMulqueen said: “Clients are more feesensitive, which is understandable. Inrunning our own business, we too havebecome more cost conscious. We haveadjusted fee structures in some areas, justas every business has had to adapt.Fundamentally, clients want value andvisibility on fee levels upfront.”

Mike McKerr, managing partner atErnst & Young, said the drive forcompetitiveness across the economy has resulted in downward pricingpressures across all businesses, includingprofessional services. McKerr added:“Some have taken to protecting businessand winning market share by significantlylowering fees, but this needs to be done on a sustainable basis. In Ernst &Young, we are an integral part of an EMEIA region. This has helped us to streamline business processes andreduce costs, protecting our competitiveposition.”


Featured AdvertisersIn This Survey

Tax Computer SystemsTax Computer Systems’ tailored solutionsinclude Alphatax, a sophisticated yet easy-to-use corporate tax software application. Since itslaunch in Ireland in 2003, 12 out of the top 15accountancy firms now use Alphatax along witha growing number of Irish companies.

In the UK, 23 out of the Top 25 UKaccountancy firms along with over 600companies are Alphatax users. According toDaran Gibney, Ireland manager at TCS: “Oursoftware solutions automate the end-to-end taxcompliance process for all types of business,incorporating year-end tax provisioning,computations for the Revenue Commissioners,forecasting, tax planning, tax accounting andmanagement of the compliance cycle.”

Bibby Financial ServicesBibby Financial Services is a provider of invoicefinancing, a flexible form of funding that is analternative to long-term loans and overdrafts.Invoice financing is a great way of freeing upcashflow, so if a business is growing rapidly, orif there is a lag between invoicing for goodsand services and actually getting paid, invoicefinancing can fill the gap.

The pitch from Bibby is that it not onlyprovides an immediate and ongoing supply ofcash linked to sales, but that firms spend lesstime chasing payment and more time chasingnew business. Other services offered by Bibbyinclude Export Finance, a specialist funding andcollections service which can release cash tiedup in export invoices, Trade Finance, a solutiondesigned specifically for importers, and NewStart Business Finance, a funding andcollections package for startups.

CCH SoftwareCCH Software specialises in compliance andpractice management software for accountancyfirms and its CCH ProSystem Suite is used byover 3,000 firms in Ireland and the UK. Thecompany’s newest product available to Irishclients is CCH Audit Automation, which reducesthe amount of time required to plan, customiseand document an audit.

Paul Murray, general manager for CCH inIreland, says that by using audit software, firmscan avail of paperless working, reducing costand making information easier and quicker tofind. CCH facilitates customers to split the costof implementation, training and licence feesover two to five years, with finance provided bya third party provider.

‘We want to ensurethat clients aren’tput off by ourbilling system’

To find out more about why we are so successful, contact us at:Tax Computer Systems Ltd

1 Hatch Place, Dublin 2 Tel: 01 6619977Fax 01 6610642

www.taxcomputersystems.ie

Alphatax is a sophisticated yet easy-to-use corporate tax software application. Since its launch in Ireland in 2003, 12 out of the top 15accountancy firms now use Alphatax along with a growing number of Irish companies.

In the UK, 23 out of the Top 25 UK accountancy firms along with over 600 companies are Alphatax users.

WHY IS ALPHATAX SUCCESSFUL? Alphatax supports all phases of the compliance cycle, from streamlining data collection, simplifying the tax analysis, producing the computation and the tax provision, and integrating with ROS. Alphatax is proven to deliver major efficiency savings to your organisation while introducing an unparalleled level of risk management into the tax compliance process.

DATA COLLECTION The Alphatax approach permits rapid integration with financial systems. Many of our customers now use Alphatax for automated data collection which gives significant time savings. We can integrate easily with any accounting system.

Alphatax also facilitates the exporting of predefined Excel sheets “Tax Packs”. Upon completion by finance professionals, the tax packs can be automatically synched back into Alphatax yielding a significant time saving on data entry.

DEADLINE MANAGER Alphatax monitors deadlines and presents the key compliance information for all cases for which a user has responsibility. The deadline manager is also compatible with MS Outlook or Lotus Notes.

TAX PROVISION Alphatax streamlines the calculation of the tax provisions to be included in a company’s year-end accounts. The function calculates the tax charge to be included in the company’s Profit and Loss account and the tax liability to be included in the company’s Balance Sheet.

CUSTOMER SERVICE Our customer support and back-up are characterised by exemplary professionalism. That professionalism is about quality, consistency and availability of service. We prioritise the solving of urgent and complex problems, even if they are not our direct technical responsibility. Our support desk is staffed by fully qualified tax professionals, who ‘talk the same language’. We also offer comprehensive training.

Deadline Manager


DIGITAL MEDIA

80

Social networking provides a way toconnect people of similar interests,regardless of geography, on awebsite. A wide range of social

networking sites provide networkingtools for individuals and for businesses,depending on the site. Twitter wasinitially about answering the question,“What are you doing?”, in less than 140characters, via texting, instant message, orthe web. A message on Twitter is knownas a ‘tweet’ and people adding messagesare said to be ‘tweeting’.

Twitter started in 2006 and gainedmomentum in 2009. Popular withcelebrities and politicians, Twitter is nowbeing used by journalists, big brands,local councils, sports clubs and smallerbusinesses, as well as individuals in allwalks of life. Increasingly, Twitter is being used by businesses worldwide tocommunicate with customers, potentialcustomers and influencers.

The power of Twitter is that, althoughit is a web-based application, you cantweet from many mobile phones usingapplications such as Twitterfon.Wherever you are, whatever yourexperience, whenever it happens, you canshare it with the world. You can giveinstant feedback on customer service,share information about airport delays,political changes, even the weather and

you can get real-time opinions aboutplaces or events.

Twitter is free of charge, but it doesrequire some time to get to grips with.You need to: ● decide how you can get the best use outof Twitter (to raise your profile, engagecustomers, gain feedback, promote newproducts)● create a Twitter account● start tweeting● gain followers and follow other people.

What can Twitter do for yourbusiness? Many people do not understand Twitterinitially - they just ‘don’t get it’. Frequentquestions and comments include “Whatis the point?” and “It’s such a waste oftime”. But one of the fastest-growingbusiness segments online is creatingapplications to make Twitter more usefulfor companies, and Twitter can add valueto businesses in the following ways:● Comments on Twitter are indexed byGoogle within hours, improving yoursearch profile.● Your tweets can drive traffic to yourwebsite.● Company news can be seen byjournalists and potential customers as ithappens.

● You may have contact with people whomay not normally take your phone call.● Promotional messages can bepromoted to a wider audience than yourexisting customers, with the explicitendorsement of those who retweet them.● Twitter raises your company’s onlineprofile.

In addition, using Twitter you can:● Promote time-limited offers - the lastfew seats for a movie starting in 30minutes time, for example.● Create and organise events online and‘tweetups’ offline - using Twtvite.● Make coupons for special offers forTwitter customers - using Twtqpon.● Post jobs and get applications onlinevia Twitter - on Twtjobs.● Provide customer service and gainfeedback from customers on products orservices. ● Test and promote new products.● Build mailing lists.● Create a Twitter business card -Twtbizcard.● Have conversations with customers.● Monitor your brand.

Using Twitter, or any online tool,should be part of a wider marketing plan.Rather than considering a specific tool inisolation, think about your objectives andwhat your company is trying to achieve.

All A Flutter About

TwitterTwitter may prove to be a fad, but it’s the easiest

of social networking sites to use and lots ofcompanies are making their presence felt.

ANNMARIE HANLON and JOANNA AKINS explain thepotential benefits and what’s involved


DIGITAL MEDIA

Once you have decided what you want toachieve, you can decide your approach.Good business tweets need to beinformative, useful and or good enoughto share. You can tweet about:● New products or services (not hardsell).● New blog posts.● Asking or answering a question.● Facts and figures.● Local breaking news.● Information that may be of interest toyour customers or followers.

The best way to manage Twitter is toallocate ten minutes at the start of yourday to update what you are doing. Notethat if you open a Twitter account anddon’t use it, Twitter will close it.

How can Twitter generate sales foryour business?There are several ways to generate salesvia Twitter. First, promote yourself as anexpert, which can be achieved by:● Tweeting tips on your subject. ● Promoting events such as a webinar.● Answering questions that otherTwitterers ask.

This may lead people to ask you to dowork for them. You can use Twitter tolook for business too. If you are a websitedesigner, you can set up a search columnin Tweetdeck to return results for‘website designer’ or, more specifically,‘can anyone recommend a good websitedesigner’. These results provide you withan opportunity to contact the persontweeting directly and to sell them yourservices.

Alternatively, you can pay foradvertising on Twitter, using the servicesbelow or others:● TwittAd. Twitter users can post ads ontheir Twitter profile.

● Advertisers select categories of Twitterusers, demographics and location.● Be A Magpie: An advertiser createstheir ad message and selects keywordsthat will help identify the best Magpie-Twitterer for the campaign. Theadvertiser then sets their budget, givingthem complete control over the spend ona single campaign, and the number ofTwitterers that can be reached for thisbudget is automatically calculated anddisplayed. Magpie identifies the mostinfluential Magpie-Twitterers for acampaign based on the selectedkeywords. If there are competingadvertisers for a Magpie-Twitterer, anautomated online auction willcommence. Bid prices are guided by thebudgets previously set.

What are ‘tagging’ and ‘retweets’on Twitter and how do you use them? A tag is like an electronic highlighter pen;it makes it easier to spot a particular wordor phrase on a page when you’researching later. In Twitter, ‘hashtags’ thatuse the symbol # are used to #tag tweets.This means you can contribute to aconversation where a specific tag is used -for example, #interior design news or#marketing update.

A retweet (RT) is where someonerepeats your tweet. It’s like forwarding anemail to all your followers. If your tweetis ‘retweeted’ - for example: RT@annmariehanlon Top marketing blogsee http://business2businessmarketing.

blogspot.com - it means that it will beseen by anyone who follows the personwho retweeted you, giving you and yourtweet more exposure.

You can also retweet useful tweetsyourself and share the information withyour followers. The benefit of retweetingis not only that you share informationwith your followers that you and theymight not have had access to otherwise,but also that your retweet is seen by theoriginal tweeter who, if they are notalready following you, may decide tofollow you.

How do you find and get followerson Twitter? It’s not a business card competition.There are people on Twitter with tens ofthousands of followers (they are known as‘whales’) but, for most businesses, qualityis a better plan than quantity. We do notrecommend that you auto-follow peoplewho follow you. Be selective, as otherwiseyou will waste lots of time reading tweetsof no relevance to you or your business.

● To find followers: Use the ‘advancedsearch’ function in Twitter to find peoplewith similar interests - for example, youcan use #sailing to find people interestedin sailing. Leading on from this, look atthe followers of people you are followingor find interesting. Using ‘whois’ andtheir name - for example, ‘whoisbrianokane’ - will show you their briefbiography. Online tools - for example,


Who Should I Follow - will makerecommendations based on your currentfollowers and location.

● To get followers: Ask a question,asking your followers to retweet (repeat)it. Reply to someone else’s question andtheir followers will see your response.Recommend people you’re following onFriday, using #ff or #followfriday. Addlinks to photos, as these create interest.Use a URL shortener to make sure the

link fits within the 140 character Twitterlimit. Add useful tweets which may beretweeted. Use #hashtags, as people willsee you when searching for specificsubjects.

A raft of Twitter directories are nowavailable, including: WeFollow, Twellow,GeoFollow, TweetFind, Twitr andJustTweetIt. Visit them and get listed.

How can you harness yourfollowers on Twitter?Tips for using Twitter to harnessfollowers include:● Vary your posts - no one wants to seethe same tweet repeated every few hours.● Ask questions: “Can anyonerecommend a good designer?” It showsthat you are keen to interact and that youvalue other people’s opinions. SomeTwitter users have set up searches to pickup on keywords - in that case, a designermight respond directly to your request.Tweetdeck provides the facility to returnsearch results for your keywords so youcan respond quickly to those mentioning,for example, your company name.

● If someone recommends you for#followfriday (when Twitter usersencourage other users to follow aparticular user to boost their followers),say ‘thank you’ and recommend themback if you think others might like to seetheir updates.● Respond to questions or comment ontweets that other tweeters are posting.● Direct message (DM) other Twitterusers for more information.● Respond to updates by saying ‘thankyou’ for useful information.● Search for mentions of your companyname and respond to queries andcomplaints. ● Provide offers: ‘Special offer forTwitter users, click here for details’.

What free software can you use tohelp manage Twitter?One of the fastest growing industriesonline is creating applications or tools forTwitter. There are already over 100applications to help you manage, or getthe most out of, Twitter. They include:● Mr Tweet: Makes recommendationson who to follow.● Tweetburner: URL shortening servicefor Twitter.● TweetBeep: Track who is mentioning

you. If you are not using Twitter,TweetBeep is a good way to monitoryour brand.● Tweet Later: Schedule Tweets over aperiod of time.● TweetGrid: Live updates for anykeyword on Twitter.● Qwitter: Emails you when someonestops following you.● Twitter Grader: See how you rank onTwitter.● TwitStamp: Create a personalisedTwitter badge.● Tweetdeck: Makes Twitter easy to use.● Twitterfon: iPhone/iPod touchapplication for tweeting on the move.● Twitpic: Lets you share photos onTwitter.● TweetMeme: Finds stories fromTwitter for you to retweet.

Extracted from Quick Win DigitalMarketing, byAnnmarie Hanlonand Joanna Akins (Oak Tree Press)


DIGITAL MEDIA


C ommunicating on Twitter with sofew words means that you need tobe succinct. It also means that a

form of Twitter shorthand has developed.For example:● @username + message: This directs atweet at another person which can beseen by their followers: @annmariehanlonwe’re attending the SME show in Dublin.● D username + message: A D or DMsends a person a direct and privatemessage. No one else can see a DM orDirect Message: D joannaakins Brianrunning late, delays in Cork.● WHOIS username: Type a whois requestinto your Twitter box and it shows theshort biography of the person, as long astheir updates are not private: whois

joannaakins. (Twitter only lets you see thisinfo for a few seconds.)● GET username: This retrieves the latestTwitter update posted by the person but, ifthey have not tweeted for a while, it cantake sometime: get brianokane.● #hashtag: These are used to #tagtweets to make it easier for peoplesearching on Twitter. They are theequivalent of Twitter keywords:#followfriday to see who people havestarted following. ● RT - retweet: These are like forwardingan email to all your followers. To credit theoriginal tweeter, add “RT” plus theoriginator’s username at the beginning ofthe tweet: RT @annmariehanlon this is aretweet example.

The Twitter Laqnguage


DIGITAL MEDIA

84

Margaret WalshNeon SMS Solutions Twitter users should use a tool such as Tweetdeck or Hootsuite.They make it very easy to manage accounts, leave commentsand include features like stats and traceable links. If the user hasa busy day ahead they can schedule comments the previousevening. Be informative and engaging. Don’t over comment. Isee many businesses now leaving overly personal views whichdo not relate in any way to their own or core business. For this,use a personal account.

Eamonn Grant Flowers Made EasyTwitter allows us to send offers and updates to a targetedaudience of people who want to listen. If we send an offer toour twitter followers, we tend to see a big take-up. Don’t paysomeone to create a presence for you unless you havecommitted enough time and effort to turn your presence into adedicated source of contact with your customer. Blank profiles,tweets from last year and old news on blogs is pointless.

Barry KennyIrish RailThere is a democratic nature to Twitter. One warning tocorporate users is to keep the suit on while you are tweeting. It’svery easy to drop your guard. The initial problem withFacebook was that members were joining the Irish RailFacebook page on a once-off basis to make a complaint. Tocounter this, we have used Twitter and Facebook to offerdiscount vouchers. We did a race-off between our Twitter pageand Facebook page last week offering discount travel vouchers.There was a much higher take up from Twitter followers.

Dave DavisRedfly Marketing A blog is ideal to attract links to your content to help it rank inthe search engines. You can’t just throw up a Facebook page orcreate a Twitter account and be done with it. It’s not a magazine

advertise-ment. You have to take it seriously. These are notadvertising mediums. Start off slowly and give away everythingyou can (advice, products, support) all for free. Don’t ask foranything in return. Learn who the influencers are and watchwhat they do. With blogging, make sure you create interestingcontent that you would want to tell your friends about.Eventually, you will be noticed as an expert in your field.

Iarfhlaith Kelly WebstrongThe key to using social media properly is to get people comingback to you. You won’t do that with loud sales messages.

Using Social MediaTo Boost Business

Wading into the fast-moving flow of social media can be daunting for asmall business. GRAEME MCQUEEN asked ten firms who’ve taken the

plunge about what works for them

Dave Davis, Redfly Marketing


DIGITAL MEDIA

Instead, offer useful information that your audience will findinteresting. Don’t think of it as a one-way medium. Think of itas a conversation. Be honest. If you’re not who you say you are,you’ll eventually be found out. Online reputation is incrediblyimportant and if you are known for being dishonest onlinethen your reputation could be irrecoverably damaged.

Sian PhillipsWhatswhat.ieTo make your listing look good, ensure you have a catchy biowith a link to your website if you have one. This way someonecan find out more info about you or your business if they needor want to. Ensure you add an avatar (picture), preferably ofyourself, as lots of people don’t like to interact with someonehiding their identity. It can be very slow to start, but don’t giveup. It’s handy if you already know someone on Twitter andlook at who they are following or who is following them.Follow their contacts and the majority will follow you back.

Aisling FoleyAisling Foley MarketingCompanies which aren’t actively using their Twitter accountsand tracking followers need to be careful. A lot of these non-active accounts have unwanted types of followers. There canbe a lot of spam on Twitter, so it’s important to check yourfollowers regularly to block the inappropriate ones.

Randall Snare iQ ContentUse your blog to link to the services you provide, staff profilesand anything that showcases what your business can do. Youdon’t necessarily need to produce different pieces of contentfor each medium; leverage the content you have. For example,

you can publish the titles of your blog posts on Twitter. Inorder for your social media presence to fit into your overallcontent strategy, you must have the people in place who areclear owners of that content stream. Nothing is worse than afade i.e. months of latent Facebook, increasingly infrequentblog posts.

Michael KaneCurious WinesSocial media are not for advertising, or pimping how great youare, or constantly trying to push your product into people’sfaces. They’re for interacting with customers and for makingyour company more personable and accessible. The benefitsare in terms of customer accessibility and being able to engagein a two-way communication. Be yourself. I’m not sure youcan credibly maintain an online social media presence withhidden agendas or disingenuous values. It should be the publicface of who you are and what your company stands for.

Vincent DonnellyMovies.ieThe social media tools that attract the most traffic for us areFacebook, Twitter and YouTube. We spent a lot of time onMyspace and Bebo but there is a very noticeable slowdownon both sites. Digg was good for short-term traffic boosts but Digg users aren’t loyal, they just want a quick fix. They’ll read one story and then go elsewhere. Keep yourcontent interesting and fresh. There is a fine line betweenspam and regular updates - be careful not to overdo it. Don’t post too many business posts every day, and keep updates for important stuff, otherwise you’ll losefollowers. It takes time to build a following, so don’t give upafter a week.

1.Segment your target audience. Decidewho your digital marketing is targeting interms of age, geography and profile. Ifyou’re not sure, get help.

2. Create objectives. To measure the successof a campaign, you need to set smartobjectives that are specific, measurable,achiev-able, realistic and timed.

3.Prepare your brand digitally. Operatingonline means your brand may need toadapt its logo, shorten its businessdescription and organise some goodphotos.

4.Monitor mentions of your brand. If

you’re using digital marketing, you needto know if it’s working.

5. Improve your website. Look at thekeywords you’re using and where yourtraffic comes from.

6.Make your website valuable enough tobe shared. Add templates, useful tips andlinks so that others will retweet, share anddrive traffic to your website.

7.Get professional help. There are greatweb designers, graphic designers andmarketing professionals available to helpto organise your website, brand identity,mobile and advertising campaigns.

8. Share. If you’ve found something useful,tell your networks. Don’t forget to makesure others can share your information -include ‘share this’ or ‘add this’ buttons onyour website or blog.

9.Get started. Look at the best networksto meet your objectives and generatesales for your business.

10. Check out the websitewww.quickwindigitalmarketing.com, anonline resource for marketers,entrepreneurs and business managerswho want to understand and use digitalmarketing for the maximum effectpossible.

Top 10 Tips For Successful Digital Marketing

SMART DEVICES

Archos Tablet


If you want to carry around the entirecontents of your computer in your pocket, Corsair's FlashVoyager GT should do the job.The GT is a tad chunkier than mostUSB keys but is considerably smallerthan a typical mobile phone, and youget to store a massive 128 gigabytes.That’s the equivalent capacity of 90,000floppy disks (remember them). The GT claims a 32Mb per second read speed and 28Mb per second write speed and comes in a durable and water-resistant rubber housing. Available from www.scan.co.uk, priced €307 (excluding VAT).

Storage King

Amazon’s Kindle isn’t the only eBook reader intown. Endless Ideas has added a thirdeBook to its range in the form of theBeBook Neo. The device hasa six-inch screen and theNeo's battery promisesup to 7,000 pageturns. Device chargingis through USB. The Neoships with 512Mb of memorybut there is an expansion slot. The company’s website has thousands of out of copyrightclassics available for free download in PDF format. The Neo costs €299 (including VAT) from www.mybebook.com.

Apple isn't the only company tapping into the tabletcomputer market. French company Archos has beenoperating in this space for several years. Its latestdevice is the Archos 9 PC tablet, which featuresan 8.9-inch touchscreen display and operates usingWindows 7. The device is WiFi and Bluetoothenabled, while a USB port is included along with a SIM card slot for HSDPA. The battery life isn'tfantastic at around three hours, although there is the bonus of a kickstand and a webcam. Alsoinside is an 80Gb hard drive and an Intel Atom Z515 processor, while two stereo speakers and amicrophone are built-in. Other notable featuresinclude vTuner, giving access to over internet radioand TV stations, and Skype. Available fromwww.archos.com priced €499 (including VAT).

BeBook Reader

SMART DEVICES


With mobile phones now bundling powerful cameras,digital camera manufacturers are having to up theirgame for a USP. Samsung’s latest model is the 12megapixel ST1000, which it claims is the world’s firstmulti-wireless compact camera. In addition to the 3.5-inch touchscreen LCD, the ST1000 features WiFi,Bluetooth and built-in GPS geotagging. The WiFimeans that pictures can be emailed to a friend orinstantly pinged to Facebook, while the GPScapabilities keep track of exactly where each picturewas shot. Other features include 5x zoom and HDvideo recording. Available from www.pixmania.ie inblack, red, blue and silver, priced €339 including VAT.

Connected Camera

Free As AJaybirdDangling wires can be a pain while listening to anMP3, especially when exercising. New from JayBirdis the Sportsband SB1 wireless headphones, whichwork using Bluetooth. JayBird claims eight hours ofplayback from a 2.5 hours USB charge. Next andprevious track buttons are built into the corner of oneof the headphones beside the volume controls. Theuser can also take phone calls through the Sportsband,thanks to a small built-in microphone. Available fromwww.expansys.ie, priced €56 plus VAT.

88

MOTORING


Despite the name, there is nothingabominable about the new SkodaYeti. In fact it’s a well packagedcompact crossover vehicle (with

optional 4WD technology) that won’tattract the attention of the SUV police.By virtue of its neat footprint and subduedstyling the Yeti looks small and innocentby comparison with the in-your-facestyling that generally characterises theSUV/crossover segment. Its box likeshape is also practical in terms ofproviding good rear head room, althoughit’s a pity the rear styling wasn’t softenedwith more imaginative lines to improvethe aesthetics.

The flexibility of the seating will appealto those who need varying amounts ofpassenger or luggage space. There areeight different ways of configuring therear seats, which slide three ways and areeasy to fully remove. All three rear seatscan come out to maximise the carryingcapacity. With the three seats in place,however, the boot is not overly generous.

One of the big attractions of SUVs formany owners is the so-called ‘command’driving position which seats themconsiderably higher than a normal saloon

or hatchback. The Yeti is a compromisebetween the two. The driving position israised without being ostentatiously high.This contributes to improved visibilityand makes it easy to slide in and out of thevehicle - an attribute of particular value toanyone with mobility issues.

The Yeti is designed to be familyfriendly and comes with plenty of interiorstorage space such as large door bins, a bigglove box and various other cubby holesfor stowing odds and ends. The seats are not particularly wide but they are supportive and adjustable.

The quality of the interior plastics issurprisingly good and while the net effect is plain, the overall fit and finish of the cabin is hard to fault. Theinstrumentation and main controls are

clearly laid out and easy to use andfeatures such as a touch screen soundsystem and Bluetooth are standard on this model. So too is the impressivepanoramic sunroof, the multi-functionsteering wheel, leather upholstery andfront and rear parking sensors. In short, agenerous goody bag for the price.

The test car came with a 1.2 litre(105bhp) petrol engine which didn’tsound promising. Wrong. It’s a perky all-new turbo charged unit that deliversmaximum torque in the most commonlyused ranges. It is economical on fuel butits 154g/km of CO2 pushes it into the€302 road tax bracket compared with€156 for the 2.0 litre diesel version. The entry price for the diesel is €22,570and €21,715 for the entry level petrolmodel.

The test car was front-wheel drive but4WD will be available as an option at alater date. Despite not having 4WD, theYeti is surefooted and the handling is tidy.A good measure of how well a newvehicle meets a need is the level ofinterest shown in it by other road users.Every time I parked the Yeti, it attracteda lot of attention.

Skoda has hit the sweet spot with its new Yeti compact crossover, writes OLIVE KEOGH

Yeti

Model: Skoda Yeti TSI Engine: 1.2 litre petrolSafety: Five star NCAP rating,multiple airbags, ESP, whiplashoptimised head restraintsPrice: €24,370Verdict: Comfortable, capable anddoes exactly what it says on the tin


MOTORING

A8xcellent Audi

T he Prius is currently the world’s best selling hybridbut Toyota quickly needs to allay fears about itsbraking system if it is to remain so. Now on sale is

the third generation of the model and it is a little biggerthan its predecessor. The styling has been tweaked toimprove its rear head room and aerodynamics, and itsHybrid Synergy Drive has undergone changes to furtherimprove fuel economy. While front seat accommodation is

fine, the Prius is not particularly roomy in the back or inthe boot, which makes it problematic as a family car. Also problematic is the rear visibility, which is seriouslycompromised by the raked design of the back window. The Prius is at its best when driven in a calm, eco friendlysort of way. There isn’t much feel from the steering and it’snot designed to deliver rapid nip and tuck responses. Thenew Prius costs €25,900.

Lacklustre Prius

I t is a puzzle why the Audi A8 always plays second fiddle tothe Mercedes S-Class and the BMW 7 Series. It is everyinch as good, and in some respects better, than both. The

fifth generation of the model will arrive here in May with anarray of features to tempt the buyer, from creature comfortssuch as adjustable interior lighting to suit one’s mood andventilated massage seats in the rear, to distinctive full LEDheadlights which are networked with the car’s

multimedia/satnav control system to automatically follow thecurves of the road. The eight speed automatic transmission isalso networked and uses information on the upcoming roadlayout to minimise unnecessary gearshifts. Power units havebeen reworked to be more powerful yet 22% more fuelefficient and there will be three models on offer: a 3.0 litrepetrol and two diesels with displacements of 3.0 litres and4.3 litres. Prices for the new A8 will start at around €95,000.


MOTORING

Peugeot is on a bit of a roll with the launch of interestingnew niche models. Hot on the heels of the 3008crossover comes the all-new 5008 MPV. The 5008 is a

seven-seater (starting price €26,995) and it comes with a flat-folding rear seat arrangement to maximise the load area. The5008 is aimed at families so achieving five stars in Euro NCAPglobal safety ratings is a good start. Standard safety equipment

includes ESP, ABS, ASR, electronic brake force distribution andan automatic electric parking brake with hill assist function. The5008 is the only car in its segment with curtain airbags for allthree rows of seats. Parking an MPV can be a major challengefor some drivers so the 5008 has a clever system on board tohelp. It measures parking spaces and suggests (via a visualdisplay) how best to position the vehicle in the chosen space.

T he Lexus IS 250C is rather dainty, and in dark navylivery with a contrasting light beige leather interior(sounds hideous, looks great) it exudes glitzy panache.

What’s even more impressive about the neat design is that itaccommodates the considerable amount of metal thatconstitutes the folding roof without compromising the sportysilhouette. When the need arises, the roof whizzes into placein 20 seconds. However the sportiness is more in the looks

than in the driving. The ride is sports car firm but theautomatic gearbox feels tuned for cruising. There is somenoticeable wind and tyre noise, though the hard top dampensthe worst excesses. Power is provided by a 2.5 litre V6 petrolengine with 208bhp. It has six-speed automatic transmissionand paddle shift comes as standard. Also standard are airconditioning, alloys, LED tail lights, vehicle stability control andheated front seats. The IS 250C costs €59,215.

Dainty Lexus

Bags Galore


Motor sales -15.1Furniture/lighting -13.0Fuel -12.2Books/newspapers -11.7Hardware/paints -10.4Bars -8.4Food/drink -6.8Electrical goods -4.7Pharmaceuticals -4.3Department stores -1.9

Percentage drop in annual sales volume December 2009

Daniel Radcliffe 41Ben Stiller 40Tom Hanks 36Adam Sandler 32Denzel Washington 31Rupert Grint 30Owen Wilson 29Nicolas Cage 28Russell Crowe 28Johnny Depp 25

Vanity Fair estimate of 2009 earnings ($m)

Dubai -21Dublin -21Zurich -18Singapore -17Madrid -16Amsterdam -14Brussels -12Stockholm -9London -5Frankfurt -4

Percentage drop in average room rates 2009

Romania 76Portugal 64Poland 63Italy 40Spain 34Ireland 30Germany 25UK 24Netherlands 14Denmark 10

Percentage of population who cannot afford a one week annual holiday abroad

Latvia 22.8Spain 19.5Ireland 13.3Portugal 10.4France 10.0Poland 8.9Italy 8.5Britain 7.8Germany 7.5Austria 5.4

EU unemployment rate (%) December 2009

Facebook 15.9Google 4.6O2 3.7Orange 3.6Vodafone 2.0Yahoo 1.9BBC 1.8Microsoft 1.6Apple 1.5Nokia 1.1

Millions of UK unique visitors per month to mobile internet sites

Tiger Woods 121Phil Mickelson 42Arnold Palmer 38Jack Nicklaus 30Greg Norman 26Ernie Els 21Vijay Singh 17Sergio Garcia 15Padraig Harrington 15Gary Player 14

Estimate of on and off course earnings 2009 ($m)

Retail Crunch Actors

Hotel Slump Deprivation Dole Queues

Stock Markets Mobile Broadband Fairway Kings

Champions League final 109Super Bowl 106Bahrain GP 54Men's 100m WAC final 33 Wimbledon men’s final 29Japan v South Korea (baseball) 27World Series baseball 26NBA finals 26Masters golf final day 21South Korea v China (badminton) 19

Millions of worldwide viewers for sports events in 2009

Sports Events

Call in to your local Meteor store or go online today.Subject to availability. Bill Pay device price is subject to signing up to our 15GB contract. Terms apply, see meteor.ie have you got it yet?

Huawei E180PAY AS YOU GO

49BILL PAY

FREE

Sao Paulo 126Bombay 102Shanghai 90Hong Kong 74Toronto 56London 50Nasdaq 44NYSE Euronext (Europe) 37NYSE Euronext (US) 29Dublin 27

Best performing stock markets (%) 2009

business plus march 2010

Documents

fiduciary taxes

payroll taxes payments

incentive forthe directors

tax thieving

business owner

limited liability companies

revenue aeuro

goodbye totheir tax