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High Risk, High Reward

We have spoken at length in the past about the importance of SMEs (Small and Medium Enterprises) are to the Irish economy. SMEs alone currently comprise over half of all Irish businesses, and have come to form the backbone of the ongoing economic recovery. As such, it has become increasingly important to protect and encourage these kinds of businesses.

In recent months we have seen the beginnings of a welcome change in the availability and range of funding and assistance options for SMEs which has shown a real shift in focus towards taking note of the importance of our Small and Medium Enterprises as well as our entrepreneurs.

Something which is rarely focused on is support for the financial backers of these seemingly higher risk enterprises and companies. The Government have created a scheme to act as an incentive for such financial backers called the Enterprise Investment Scheme. This scheme allows qualifying companies access to investment from shareholders, and in turn offers these shareholders tax breaks as incentive.

The purpose of the scheme is to assist some small and higher risk SMEs to raise capital where this may ordinarily be difficult or almost impossible. This will help to reduce the amount of SMEs forced to wind down due to a lack of financial investment.

It is hoped that this scheme will encourage investors to back what may be perceived as higher risk companies, in order to act as a buffer for these companies and increase their chance of continued survival. As these would be a higher risk investment, there are of course a number of enterprises which do not qualify, these are as follows:

Land shares, goods (except normal retail etc.), financial, legal and accountancy, property development, hotels and nursing homes, agriculture and power, etc.

There is also a time limit of two years applied during which the invested capital must be utilised and the investor must never have been previously connected with the business prior to investment.

Companies wishing to avail of this scheme must be EII certified and must directly seek certification from the Revenue Commissioners.

As always we are available for any advice or guidance you may require on business or finance matters.

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DCA PARTNERSDECLAN DOLAN & EAMONN GARVEY

Blowing Up the Housing Bubble

The housing ladder has remained a hot topic of conversation since the economic downturn and subsequent changing of the rules for applying for a mortgage. The conversation doesn’t seem to be going anywhere as the concern of Ireland falling into the housing bubble trap increases as more and more prospective buyers find themselves unable to pay increasing asking prices.

This week it was reported that these increasing house prices do not look likely to slow down in the coming years. Goodbody Stockbrokers have stated in their latest economic report that the average price of a house is set to continue to rise by up to 10% this year followed by another 8% in 2018 meaning an additional 18% cost increase on houses which have already increased massively in price in the previous three years.

The report states that:

“Mortgage approvals, even excluding cash purchases, are in excess of the amount of new supply expected to come to the market, thus house price inflation is expected to remain strong over the forecast period. […]“While supply remains low, demand appears to be running ahead of expectations”.

Existing housing demand is said to be 30,000 per year, and it is reported that it will take another number of years in order for the number or houses built to match up to tahis demand. This lack of balance between supply and demand is what has encouraged this somewhat bleak forecast from Goodbody Stockbrokers, who have also stated that they expect there will be €13.5billion in new mortgage lending in the coming years.

An additional issue with supply and demand is that there are far more prospective homeowners being approved for mortgages than there are houses available, which continues to push prices higher. A recent infographic shows the increasing prices as they continue to grow. Mortgage approvals are being boosted by the Government’s popular help-to-buy scheme but many of those approved will find themselves without a home to buy.

Should you have any queries on home ownership, or any other financial or business matters, please don’t hesitate to contact us here at EcovisDCA, where we will as always be happy to help.

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DCA PARTNERSDECLAN DOLAN & EAMONN GARVEY

SOWING THE SEEDS OF INTERNATIONAL GROWTH

Success is a very strange beast which appears in different forms for all individuals whether business owners or not. For business owners in Ireland, often the first port of call is to establish some small measure of success on home turf, before seeking to grow the business elsewhere. In the years following the financial crisis we have seen a mass exodus of people leaving our country, visas in hand to find their fortunes elsewhere. It would appear that this has slowed considerably in recent times so today we are going to focus on the other side of the coin, managing to grow your Irish business internationally while remaining on home ground.

 

Recent reports have suggested that since Ireland’s financial recovery has started to pick up some form of speed, many of those who have travelled to Australia or elsewhere and found success there have returned to Ireland in order to utilise their newfound skills and level of success. The Enterprise Ireland office in Sydney is said to be working with more than 150 Irish companies, whilst a vast number of Australian companies are now expanding operations in Ireland. Similarly, Irish recruitment agency CPL created a pop-up office in Melbourne in which it interviewed Irish professionals for positions back in Ireland.

 

So what options exist for growing your Irish business internationally whether you are making your return or have stayed put?

 

The Enterprise Ireland Internationalisation Grant gives Irish businesses the opportunity to grow in international markets. This grant focuses solely on supporting the costs of undertaking new market research which is a valuable asset in growing your business in new areas and the research must focus on an area not already being covered by your business. There are a number of eligibility criteria available through the Enterprise Ireland website including that the business must be based in the Republic of Ireland and employ more than 10 people. There is also an available option for much larger companies. The maximum grant available here is €35,000, which would certainly garner valuable information for growing your company. This grant is open to applications all year round.

 

For smaller companies and SMEs, the Enterprise Europe Network is an invaluable resource which will assist in gaining new contacts and support networks beyond the door of your own business. This is a support network for SMEs and other companies with international ambitions assisting in gaining contacts and providing much needed information about funding available. This is also an important resource when looking to grow your business internationally as it provides valuable information on EU regulations which will ensure that your business is following all appropriate protocol.

 

The Enterprise Europe Network also provide an access to EU funding programme for SMEs to assist in this process as well as giving Irish companies the opportunity to give feedback on EU legislation. This is a resource we would urge all Irish SMEs whether dreaming big or small to engage with.

 

If you have any queries, please don’t hesitate to contact us here at DCA Accountants, where we will be happy to assist and advise in any way possible.

 

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DCA PARTNERSDECLAN DOLAN & EAMONN GARVEY

WHAT A WAY TO MAKE A LIVING

We have spoken many times about being a business owner or entrepreneur in Ireland today. Equally, and sometimes even more importantly for the day to day running of any company are its employees. This week we will focus on being an employee or job seeker in this country at the present time. Following the economic crisis, becoming full-time employed in Ireland became somewhat of a minefield with schemes like the JobBridge scheme offering training in new areas but effectively closing off a large section of previously available paid positions. Likewise, college graduates who were unfortunate enough to finish their studies just as the crisis occurred, may have found their new qualifications of little use. Naturally, we then saw a mass exodus of young workers seeking to utilise their skills on other shores.

 

Now that our economic situation has begun to improve, the question arises about the satisfaction of workers in Ireland. The 2016 LinkedIn Talent Trends report seeks to outline what it truly means to be a worker in Ireland. The report suggests that job seeking remains somewhat of an issue with the biggest roadblocks facing jobseekers including being offered incorrect roles by agencies, whilst not having full awareness of what the job entails is cited as another major issue. This calls into question whether our interview and job posting system is adequate enough for finding the right candidate. LinkedIn’s senior HR director for Europe, the Middle East and Africa (EMEA), Wendy Murphy has stated that

“67% of Irish professionals say that culture and values are the most important thing they want to know about a company”.

 

Again, information which is difficult to ascertain by using our current system.

 

Interestingly, Ireland is among few countries where the fact remains that the people you know are important in gaining access to many areas of employment with 40% of people quizzed stating that they gained their current position through someone they know.

 

Finally, it would seem that Irish workers are quite an ambitious group with this report finding that 45% of people left jobs due to a lack of available career advancement, whilst 40% admit to leaving in order to find a more challenging position.

 

In terms of what this report may mean going forward, rather than turning back on our existing employment methods, the recruitment website LinkedIn have stated that Ireland should embrace this method of gaining access to positions through people you know at the company. According to LinkedIn companies should harness this notion and inform current employees of vacancies when they go live in order for existing employees to become ‘brand ambassadors’ and bring new talent to the company.

 

Should you have any queries or require any guidance on your own employment quest and finances, please don’t hesitate to contact us here at DCA Accountants where we will be happy to help you on your business journey.

 

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DCA PARTNERSDECLAN DOLAN & EAMONN GARVEY