Archive for May, 2009
Sunday Business Post – New Business Section – May 24 2009
Read the article on the Sunday Business Post website by clicking here.
Start-ups and other small companies are “gridlocked” by a lack of available finance, according to Eilis Quinlan, the newly elected chairperson of the Irish Small & Medium Enterprises Association (Isme).
‘‘The absolutely crucial issue overriding everything else at the moment is cashflow,” said Quinlan. ‘‘That, teamed with the late payments issue, is absolutely grid locking a lot of companies. The money is just not moving out there.”
Quinlan, who has run her own accountancy practice in Naas for 17 years, said her primary objective in her new role would be to help Isme’s 8,500 member companies to get money flowing through their businesses again.
Stilted cashflow was forcing otherwise viable companies out of business, according to Quinlan.
‘‘Bad businesses will always fail anyway, unless they are particularly lucky,” she said. ‘‘They do not deserve to succeed. Good businesses, which have been operating for ten to 15 years, with fundamental good business models and tight ships, and which are not operating in areas of the economy that are defunct, cannot get paid. Their debtors are taking longer and longer and the banks will not extend their overdrafts.”
Quinlan said small businesses in Ireland faced a number of other challenges.
‘‘The loss of competitiveness is also a major issue,” she said. ‘‘The cost of doing business in Ireland has become massive – labour costs, local charges, fuel costs. For exporting businesses, the fall in sterling is an issue.”
Quinlan said start-ups, and entrepreneurs who might otherwise opt to set up in business, needed forceful action from the government.
‘‘General economic uncertainty is a problem. People do not know what the government’s plans are, or even what government is going to be there in six months. There is no idea in place of any sort of overall master plan.”
Quinlan established her own independent firm of chartered certified accountants and registered auditors in Naas in 1992.The practice employs ten staff to provide auditing services, taxation advice and management consultancy, primarily to SMEs.
Quinlan is a fellow of the Association of Chartered Certified Accountants, holds a certificate in computing from Dublin City University and has an accredited commercial mediator award from the Mediation Forum of Ireland.
Quinlan is also a committee member of Naas Chamber of Commerce, a member of Mensa and a member of the government’s SME Management Development Council. In her new role with Isme, Quinlan succeeds outgoing chairman JJ Killian, managing director of Clonmelbased Flancare Distribution.
‘‘I am a qualified commercial mediator, and I am an experienced liquidator, but more important than any of that is that I am actually an SME myself,” said Quinlan.
‘‘I am a small-time employer and a risk-taker. I understand the business risks, and I hope this will stand in my stead very well in my new role.”
Quinlan said there had been a rise in the number of new businesses formed so far this year, particularly by entrepreneurs made redundant as a result of the recession.
‘‘There are huge amounts of sole traders and small companies starting up, as people do not just want to lounge around on the dole,” she said.
‘‘People are taking the opportunity to set out on their own. A lot of these are highly educated and highly skilled people, who have been thinking about taking the leap for the last ten years.”
Redundancy may turn out to be a positive event for many of those now starting out on their own.
‘‘There are really positive aspects about owning your own business, so this push could be the best thing that could have happened for them,” she said. ‘‘Any SME owner manager will tell you that there is not much work-life balance during the start-up phase, but in the medium and long-term the payback is huge.”
Quinlan advised potential entrepreneurs, with viable business ideas, not to be disheartened by the current difficult-looking business climate.
‘‘My advice would be to go for it if you have a good idea,” she said.
‘‘Entrepreneurs have always been brave and willing to take calculated risks. There are always opportunities out there and there still are. HP and Nokia were both set up during recessions.”
Quinlan added difficult economic times could be advantageous for some new businesses.
‘‘The cost base, in some ways, is now relatively low,” she said. ‘‘Insurance costs can be found cheaper. You can shop around for things like fuel, and rents can often be negotiated down in the current climate.”
Quinlan added, however, that it was imperative that new businesses secured sufficient funding to get off the ground. Access to start-up bank credit was an issue for entrepreneurs at the moment, she said.
‘‘At the time I was setting out, it was easier to get bank support than at present. A bank will want to see the paper, and they will want to see the figures. I can totally understand that as even in the good times banks are entitled to reasonable projections and a master plan.”
Quinlan advised new business owners to seek support and guidance and not feel they had to do everything themselves.
‘‘Do not try and be everything to all people,” she said. ‘‘Reach out and get help. If you have an excellent idea that is your unique strength, do not be embarrassed if you do not know the financial rules or the legal end of things.
‘‘One phone call or e-mail to Isme and we can comeback with the right answer. The support that is available from us is worth ten times the cost of the membership.”
Quinlan said new start-up companies would create the momentum to lift Ireland out of the economic doldrums.
‘‘Small businesses are the lifeblood of this economy,” she said.
‘‘When things get rough, your corner shop or local boutique or garage does not up sticks and move to another country. We are very adaptable and we can change direction quickly.
‘‘We can take setbacks on the chin and come back for more. In a way, we are much better poised to react to things as they happen than bigger business is.”
More government assistance is needed to improve credit access for small and medium-sized businesses, said Quinlan.
‘‘A government commitment to promoting SMEs would help,” she said. ‘‘The banks say they are lending, but we have seen no examples of that, I am afraid. Isme was instrumental in securing €350 million from the European Investment Bank, but it is just not being passed on. ‘‘The lip service paid to an SME stimulus provision in the last budget was pathetic and heart-breaking.
[Minister for Finance] Brian Lenihan had one line about €50 million being given through Enterprise Ireland, but how much of that will filter down to SMEs?
‘‘Then you have to go through hoops and piles of paper to get anything. In the meantime, new and small businesses are failing. Liquidations are coming across my door every day of the week, including good, serious businesses.”
Sunday Business Post – Recruitment Section – May 17 2009
Read the article on the Sunday Business Post website by clicking here.
“There has been a significant increase in the numbers of people approaching us, many of whom are more senior than might have been coming to us before,” said Robert Wasson, managing director of Watershed Interim Management.
“We have a flood of people at the moment, people who have been made redundant recently and others who feel they are about to lose their jobs. The seniority of some of the people coming to us has been a bit of an eye-opener.”
The increase in candidates seeking interim opportunities echoes the growing popularity of this option for employers, according to Patrick Dwyer, managing director of Executives Online.
‘‘We have seen a number of Irish companies, which cannot hire permanently owing to hiring freezes, take someone on in an interim capacity,” Dwyer said. ‘‘There has been a rise in the use of interims for projects that are a direct response to the economic crisis. Demand for interims to work on cost reduction – such as financial directors or procurement professionals – and sales improvements, are up.”
When Michael Cowan decided to enter the interim market in 2005, he already had 18 years’ experience as a marketing director under his belt in the FMCG field. Among Cowan’s previous employers were multinationals, including Proctor & Gamble, Diageo and PepsiCo in Ireland, Britain and Central Europe.
‘‘It was pretty much a deliberate career choice,” Cowan said. ‘‘My wife and I decided to move back to Ireland. At the time, I looked at my CV and felt that interim management just suited my long-term career aspirations.”
Cowan said the move into the interim market was relatively straightforward.
‘‘The first role I had was working for a well-known Irish drinks business which was looking to launch a new product,” he said. ‘‘With my background, the functional skills and experience were there. It was just a matter of focusing on the assignment at hand and delivering a certain project brief.”
He said that the interim management projects he had so far worked on had been varied and interesting.
‘‘I am on my fourth interim assignment in five years,” Cowan said. ‘‘I have worked for drinks companies, an international sports body on a particular tournament, a financial institution and now an iconic Irish retail business.
‘‘Typically, I would be with a client for six months. Quite often, you are replacing someone who has a very specific skill set that might take longer to recruit long-term.
‘‘Also quite often, as in my current role, you are brought in to fill a void that is not just one particular job, but work across the organisation to sort out some fundamental issues and devise the best way forward.”
Working as an interim manager allows Cowan to focus on the project to hand, while avoiding long term management issues and the potential to become involved in company politics.
‘‘Working this way is about meritocracy,” he said. ‘‘You are very much rewarded for getting the job done, rather than being part of a department and getting established within the company politics and infrastructure. You are just there to do a job, which helps keep you focused, and helps you to be much more effective.
You can switch in and out of different companies and challenges. It helps to keep fresh that way.”
The flexible nature of interim work suits Cowan’s personal circumstances. ‘‘I come from New Zealand and this allows me the flexibility to, if I want, take three months off without it interfering with the business,” he said. ‘‘It suits our family lifestyle as well.”
Candidates who make the move from full-time roles into interim management tend to a mass to an established wealth of professional experience, said Was son of Watershed Interim Management.
‘‘Clients tend to select people who are slightly over-qualified for the position,” he said. ‘‘Typically the people we would place would have significant managerial experience, generally greater than ten years in senior management positions.”
Dwyer said interim management work suited people who were flexible in their approach and confident in their own abilities.
‘‘A successful interim manager needs to be very self-directed and resilient, and have a strong track record of delivering results,” he said.
‘‘Interim managers must be able to find their own assignments – although agencies can help – and cope with the on-off pattern of work, live out of a suitcase where necessary and be held to a very high standard for the results they are being asked to produce.”
Lifestyle is an important issue for anyone considering a move into interim management, Wasson said.
‘‘Some people may not want to work at certain times of the year, or may not want to work five days of the week,” he said. ‘‘They may want to keep a few days a week to work on something else, or for family purposes.
That is quite a common thing, especially with senior professional women who often want to work three days a week.”
Interim management and consultancy are not the same thing, according to Wasson.
‘‘The main difference is that consultants come in and advise people what to do,” he said. ‘‘Interim managers come in and roll their sleeves up and do it. Not everyone who is a consultant can be an interim manager, and vice versa, but you do get people who can do both.”
Many different types of organisations use interim managers – and for many different reasons, according to Deirdre O’Shaughnessy, business development manager with Inter IM Executives.
‘‘There is no ‘typical’ client,” O’Shaughnessy said. ‘‘Opportunities come from all sectors of the economy – private, public, and non-profit – and cover all managerial functions and qualifications. Interim managers can support one off projects, such as integrating mergers or acquisitions, product or market diversification or IT initiatives.
‘‘Interims can also be taken on to support organisational change, such as the introduction of new processes or management strategies, or to take over a critical role where a senior executive is absent through illness or pending the replacement of an outgoing executive.
‘‘An interim manager can even test a new or changing role in advance of a permanent candidate being appointed.”
Senior executives could increase their annual power by working as an interim manager.
‘‘Successful interim managers can earn orders of magnitude more than they did in permanent employment,” Dwyer said. ‘‘If they replace a salaried role paying €100,000 per year, with interim roles where they earn €1,000 per day and are on assignment just 75 per cent of the year, they could easily double their earnings.”
Wasson said that interim managers working with Watershed typically earned between €750 and €1,200 per day plus Vat. He warned, however, that working on an interim basis did not automatically guarantee a high annual wage.
‘‘Interim may not suit someone who expects a very high salary, because of the rates available in Ireland and the number of days you can expect to work,” he said. ‘‘There are 220 days available and we would say that 150 days is fantastic. Therefore, you will have difficulty earning more than €150,000 through the interim route.”
Cowan said his yearly earning capacity as an interim equalled fulltime employment.
‘‘I operate through a limited liability company and my interim management services are part of a broader marketing services agency that Iown,” he said.
‘‘There are benefits to doing that versus being a PAYE worker. There are risks though. You do not get sick pay or paid holidays and there are no bonus schemes or share options. The rate takes that into account, so it probably evens out in the long run.”
Wasson said there were more interim managers seeking roles than there were positions available. He said, however, that companies driven to interim management by the downturn were likely to stick with the model when the economy picked up.
‘‘Just at the moment, the stream of opportunities is drier than we would like,” Wasson said. ‘‘Having said that, we are seeing signs that companies are looking to interim managers as the way to start to reemploy people again.
‘‘We are convinced that will be an increasing trend and that the recession will be very good for the interim industry. It will break the permanent-only idea in people’s minds.
‘‘When companies think about taking on a senior executive, they will think about what they really need, and more often consider taking on someone for just six months, or just three days a week.”
Despite the downturn, Cowan said he would continue to work as an interim manager.
‘‘With the risk of the gap between assignments, there is a temptation if an offer came along of a permanent job, but at the moment I am pretty comfortable for the future of interim management,” he said.