Archive for category: DCA News & Views

Over the past 18 months or so, a number of our clients have asked our advice on how they can cut business costs without harming the day-to-day running of their company, or indeed productivity. Obviously, there is only so far one can go when it comes to making redundancies – a reduced workforce, after all, harms the capability of the business to produce or provide the product or service that they are in business for in the first place.

 

After a little research and some implementation into our own business, it struck us that there are a number of areas where non-detrimental cutbacks can be made. What’s more, most of these trimmings have a lasting effect on the bottom line.

 

When I delved into it a little further, I found the Sustainable Energy Authority of Ireland (www.seai.ie) to be a great resource for helping with energy costs. With a couple of clicks on the SEAI website, business owners can find the ‘Quick Wins’ section that offers helpful tips on how to ensure that you are making the most efficient use of energy in your business. The helpful people at SEAI have even broken it down by sector so you can see at a glance some useful hints relating very specifically to your own business.

 

That’s not even the best bit. There are grants available from SEAI for commercial entities to help companies introduce better and more efficient energy saving mechanisms. For more on financial help available from the Authority, click here.

 

Also, it seems that the SEAI are pushing hard to promote the use of electric vehicles. The Authority can help those companies with large fleets to make the transition with a grant towards the provision of electric vehicles. There’s also the added benefit that companies can make up to 33% savings in fuel costs by making the switch.

 

Cloud computing

 

We’ve also looked closely at introducing cloud computing into our operations at DCA Accountants and Business Advisors. The big advantage from a savings point of view is that cloud computing negates the need to maintain a main server. It also helps reduce the loss of man hours – staff can get access to their work information from anywhere, which also helps speed up the time it takes to carry out projects. Downloading information and files is also much quicker and more efficient than using a regular server. Introducing cloud computing to a business will save on IT maintenance costs in the long run too. There is also a decreased risk of downtime in the office if there is no longer a reliance on a server.

 

However, what one should be aware of here is that cloud computing is only available in an area where there is fibre optic cable as opposed to copper wiring. There have been giant strides made in getting businesses online throughout the country in recent years so if your area is not equipped with fibre optic cabling right now, it shouldn’t be too long before it is. There’s much more information here on the benefits of cloud computing.

 

There are obviously more immediate measures that can be taken to reduce costs that won’t alter in any way how you do business. By comparing mobile phone providers, or other utility suppliers like gas and electricity companies, businesses can shave a lot off their bi-monthly bills in one go. When making decisions on providers in all of these areas though, it’s wise to read the terms and conditions carefully and to carry out an analysis of what you would typically pay for electricity, for example, over a three year period. Armed with that information, you can make an informed decision on which supplier suits your company best. It’s also a good idea to have a housekeeping discussion with your staff and possibly introduce new policies on the use of printers, company telephones and other resources that are not necessarily for personal use.

 

Spending some time reviewing company outgoings every month is well worth the effort – most businesses that we’ve dealt with or spoken to have made savings as a result, some more than others obviously. Nevertheless, the more that is put back into the company, the more productive it will be in the long term.

 

 

Declan Dolan,

Partner,

DCA Accountants and Business Advisors.

 

If you have a question for our DCA Q&A section, please email us at info@dca-ireland.com and we’ll get back to you.

Individual names and company names will not be published to protect privacy.

 

For more on our services or to receive a free consultation for your business from one of our experts, visit www.dca-ireland.ie or follow us on Twitter.

A client of ours wants us to go into business with him. He currently operates as a sole trader while our company is set up as a partnership agreement, with three partners involved. We’ve obviously discussed the opportunity at length between ourselves and it sounds like a great chance for us to grow our business. However, our client wants us to set up a new company so as to make everything transparent and above board. We’re fine with that but we were wondering how it effects our current situation. For example, are we exempt from corporation tax with the new company under the new rules despite the fact that we’ve been operating our own business for four years now? As I mentioned, we’re very keen to enter into business with this client but we want to make sure that we’ve set it up properly from the outset. Can you advise us on how we should go about it?

 

From the information that you have provided here I think the cleanest way of doing this is to set up a limited company whereby all parties involved decide on a share split. From a legal perspective, if things don’t work out or if the business doesn’t grow to where you would’ve liked it to after a certain period of time, it’s a lot easier to wind up. Hopefully that won’t be the case for you but as a legal entity, there are very defined constraints in terms of who owns what and what the company can actually do in an incorporated structure. If one party decides further down the line that they want out, it’s much easier to buy shares from a limited company than to organise a buy-out in a partnership arrangement, for example.

 

If you do decide to incorporate the company, ensure that there is a shareholders agreement in place from the outset. This basically sets out the rules and guidelines of how the business is run and in the event of a disagreement between the parties involved, it can prevent an escalation of legal proceedings as the rules are defined at the very beginning and everyone involved is aware of them.

 

Another option available to you is to set-up a Joint Venture (JV). Here, you will have to register another entity for tax. While, on the face of it, a JV is similar to a partnership, from a legal point of view they are very different things. For example, with a partnership, you have to make sure that all ends are tidied up – if it’s left open-ended and a partner hasn’t been moved on or hasn’t terminated his/her position within the company, in theory, he or she is entitled to a percentage of the profits earned for the rest of time. However, if the new company is set up as a JV, it protects both parties from the new business encroaching on the other companies that you both already have.

 

I would advise setting up a limited company here on the basis that it’s tidier and it’s easier to wind up if things don’t work out in the future. Also, it offers limited liability so nobody involved will be personally liable for the any debts accrued.

 

The downside is that a limited company is more expensive to run from an accounting and administration perspective – at the end of the year you can expect to add on an extra €1,000 for accounting services. However, there are a lot more tools available to lower tax liability with a limited company so the net financial gain will probably outweigh the extra costs.

 

You will also qualify for a corporation tax exemption given that you are setting up the company this year. Minister Noonan announced that the three-year exemption for start-ups is to be extended for companies that commence trading in 2012, 2013 and 2014 in an effort to encourage entrepreneurship.

 

Best of luck.

 

Declan Dolan,

 

Partner,

 

DCA Accountants and Business Advisors.

 

If you have a question that you would like answered, please email us at info@dca-ireland.com and we’ll get back to you.

Individual’s names and company names will not be published in our Q&A section to protect privacy.

 

For more on our services or to receive a free consultation for your business from one of our experts, visit www.dca-ireland.ie or follow us on Twitter.

County and City Enterprise Boards (CEBs) exist to provide support to new and existing small businesses in the commercial sphere, and it’s important to know how to go about getting this help when it’s needed.

 

There are three types of financial support offered by CEBs: Priming Grants, Business Expansion Grants, and Feasibility Grants. Priming Grants are for businesses that are still in their start-up period and can only be granted within the first 18 months of a business setting up. Established businesses (over 18 months in action) can apply for a Business Expansion Grant; however, if you have previously availed of a Priming Grant you’ll have to wait another 18 months to apply.

 

The maximum amount payable for these grants is 50% of the investment up to €150,000. That said, grants over €80,000 are considered exceptional and generally only apply in the case of projects that clearly demonstrate potential to grow beyond micro-enterprise level and/or export internationally. Subject to the 50% limit, a maximum grant of €15,000 per full-time job created shall apply in respect of any employment support granted.

 

The third form of financial support, Feasibility Grants, is there to assist with market research to examine the sustainability of a product or service. This covers consultancy requirements, hiring of expertise from third level colleges, private specialists, design, patent costs and prototype development. In the Southern and Eastern regions, the maximum amount payable for a Feasibility Grant is 50% of the investment, up to €20,000, while for those in the Border, Midlands and West regions this rises to 60%.

 

CEBs are in a great position to help small businesses, due to their knowledge of enterprise in the catchment area and their understanding of local needs. The businesses they support are considered ‘micro-enterprises’ so, to qualify, your business must have no more than ten employees. CEBs receive many applications for funding but their priority is to support viable businesses that could create sustainable employment and have potential for expansion.

 

There are, of course, other criteria to be met, but a meeting with a CEB Business Advisor, where you can discuss your proposal in detail, should clear up the particulars. If this goes well, you will be asked to complete an application form and provide supplementary documentation to support your application. Enterprise Board staff are available to assist you with this, and the Business Advisor will review your application once it is complete to make sure nothing is amiss.

 

Your application will then be appraised by an Evaluation Committee comprising members of the business community, financial institutions and local authority. These committees usually meet every six weeks, so be prepared to wait for feedback.

 

Following this, a written recommendation from the Committee will be considered by the Board at their next meeting. At this point it may still be deemed necessary to defer a decision pending receipt of additional information, so it’s best to provide as much as you can with your original application.

 

When the Board has made a decision, you will hear from the CEO in writing. This will, hopefully, be a formal offer of grant aid along with the relevant terms and conditions.

 

There are certain projects that CEBs cannot grant funding to. For example, they won’t consider a proposal that could lead to job displacement or result in unfair competition, nor will they provide financial assistance that duplicates support available from an existing programme or agency. If it is believed that a project could be implemented without financial assistance from the CEB, then the application will not be approved.

 

An ideal project for CEB funding is one that is commercial and capable of attaining economic viability without ongoing support. Be sure that you can demonstrate a definite market and evidence of adequate finance to fund the project in the long-term. You must show that you have the necessary management and technical capacity to implement your proposal and that the project can sustain or – even better – create employment. Essentially, your project must be seen to have value, and be of economic benefit to the locality.

 

As well as financial support, CEBs can also provide small businesses with information, advice, training, mentoring and technical assistance. To find your local CEB, visit www.enterpriseboards.ie.

 

Declan Dolan,

Partner,

DCA Accountants and Business Advisors

 

For more on our services or to receive a free consultation for your business from one of our experts, visit www.dca-ireland.ie or follow us on Twitter.

 

Many business owners dread this time of year – it’s the time of year that despite best laid plans, the year ahead can seem uncertain, especially if there’s less work to do than there was in the lead up to Christmas. However, while it may be a quiet time for day-to-day operations, this month provides the perfect opportunity to get out and sell your business.

 

Of course, it’s not an easy thing to do and it’s often difficult to know where to start, but with a little research, finding a good networking event can be a major boon for your business. If you’ve done your homework and are well prepared in advance, you’ll find that you can generate high-quality leads and find new opportunities that you may not have considered to date. Even if you don’t manage to develop any new or meaningful business relationships, talking to like-minded people can often give you a different perspective on the direction of your company. On the other hand, if you feel like you’ve wasted time going along to a pointless event, it’s unlikely that you’ll give over more time when the next meeting comes around. It’s also likely that you haven’t done your homework properly or followed the very simple and straightforward rules of networking in the first place.

 

It might seem obvious, but don’t turn up to a networking event in a crumpled suit, or worse, casual wear. Make sure you have more business cards than you’re likely to need too. More importantly though, it’s crucial that you have a clear plan of what it is you want to achieve with every conversation that you have, so if you’re looking to get your foot in the door, keep in mind that you’ll need a clear and concise outline of what your company does – you may only get a limited amount of time to get your elevator pitch across. If you can’t give an outline of your business and what you do in 30 seconds, you’re not explaining it correctly and your unique selling point (whatever that may be) won’t be clear.

 

Be mindful that you need to leave time to answer any questions and to listen to your conversation partner’s pitch. If you constantly talk about your business without giving the other person a chance, you won’t come across well and any possible relationship will be a non-starter. Remember that they are attending the event to build links and find possible opportunities too. Even if you don’t think you could do business together, either of you may have developed other connections that could help the other.

 

Networking events will give you the opportunity to meet with potential clients, possible business partners or even future investors, but it is a numbers game. That’s why it’s vital that you spread yourself out and don’t spend the entire evening talking to just one or two people – the more conversations you have, the more you’re building up your own network and spreading the word about your company. Speed networking, where you have five or ten minutes per conversation, is becoming increasingly popular. However, if you find yourself in a less structured environment, don’t hesitate to end a conversation politely when it’s appropriate.

 

After the event, make sure to get in touch with everyone that has given you a business card, even if you haven’t identified some of them as a potential business opportunity. It’s nice to be polite after all, and they could well advocate your product or services further down the line. But prioritise – if you’ve been given the opportunity to pitch as a direct result of the event, make sure you do so while the memory of the meeting is still fresh.

 

Declan Dolan,

Partner,

DCA Accountants and Business Advisors

 

For more on our services or to receive a free consultation for your business from one of our experts, visit www.dca-ireland.ie or follow us on Twitter.

We’ve dealt with enough entrepreneurs over the years to know that going it alone is fraught with dangers. Setting up on your own, especially when business and consumer sentiment is so volatile, is very often a difficult choice to make.

 

However, there are ways to give yourself the best start possible. One such avenue is to buy an existing business. Buying an existing business can add significant value to a portfolio or give an entrepreneur a head start. However, without proper analysis, costly or even ruinous mistakes can easily be made.

 

As we’ve all seen, the tide of emigration continues unabated. Perhaps what isn’t so evident is the effect it has on the local economy here. As people continue to leave the country, they leave behind businesses that were presumably, at one time or another, profitable entities. Of course, it doesn’t make sense to up sticks and leave behind a company that more than pays for itself, but with some digging, there are businesses out there that could well compliment an existing portfolio with a little cash and a lot of hard work.

 

For anyone buying a business, or thinking of taking the plunge, the first thing to identify is the opportunity. Ask yourself if it stands alongside an existing business or if it is in a new area where you’ll need additional expertise to make the acquisition successful.

 

If you have established that a certain business holds opportunity, it’s time to look at the nitty gritty. Insist on an information pack from the seller – this should provide soft details like when the company was formed, its background and current profile, identifying key personnel and senior management. It should also mention whether those people are willing to stay on or not during and immediately after any possible buy-out to make the transition as smooth as possible.

 

From there, one can expect detailed financial analysis of the company and its performance over the past three years at least. If this is not forthcoming, insist on it. This should contain details on sales by product and/or sales by geographic area, for example. It should also demonstrate, in detail, the company’s history with its top clients and customers, and outline any contractual details that are in place for the coming months and years. It is vital that this information is timely and correct – having major clients pull the plug at the beginning of a new era for any company can stop any progress cold.

 

Of course, having the financial clout to buy the business in the first instance is a must, but how payment is transferred varies from case to case. In my experience, unless the business is a local shop, for instance, handing over the full agreed amount in the beginning should be avoided. An earn-out period is the best option – by incorporating this into any contract gives the new owners some breathing room when it comes to cash flow and will also allow sufficient time for any anomalies to show up in the accounts history.

 

Buying a business, just like setting up a company, can be a tricky path to negotiate but some careful planning, sound advice, along with knowing what to look for at the full disclosure of accounts stage, will help smooth the ride.

 

 

Eamonn Garvey,

Partner,

DCA Accountants and Business Advisors

 

For more on our services or to receive a free consultation for your business from one of our experts, visit www.dca-ireland.ie or follow us on Twitter.