Dublin Chamber CEO, Mary Rose Burke at the launch of the 2017 Crowe Horwath SME Pinnacle Programme with Managing Partner, Naoise Cosgrove.
As part of their upcoming Pinnacle Programme, launching in September 2017, Crowe Horwath, in association with Dublin Chamber, conducted a recent poll amongst owners of Irish SMEs. Here is a summary of the findings.
Core respondents were Irish SMEs with up to 50 staff across a wide selection of sectors – from IT and software to PR and marketing through to finance and construction. The majority of the businesses polled were trading for over 5 years and the respondents were split evenly across smaller businesses with up to 10 staff and turnover of up to €1m and businesses with 10 or more staff and turnover in excess of €1m turnover.
Q. When starting a business what were the most important supports you received?
The biggest support for owner-managers of Irish SMEs is their business network of like-minded business leaders, closely followed by their family, customers and key staff. Least important were state agencies and umbrella associations.
Q. What type of funding did you use to start and/or grow your business?
With three quarters of respondents trading for 5 years and more, it was not surprising that crowd funding was the least availed of funding option, followed closely by staff investment and traditional senior debt. Outside equity and the owner’s own capital were the most popular sources of finance. Respondents cited various lending restrictions and challenges with being self-employed as being the main reason so little traditional debt was utilised.
Q. When starting or growing your business what were the biggest challenges you faced?
The biggest challenges SME owners face when starting or growing their business is accessing customers and managing cashflow. When it comes to access customers they largely relied on their own hard work and by attending training and reading about successful entrepreneurs. For dealing with cashflow they lent on their existing banking and financial adviser relationships to help keep the business finances on an even keel.
Q. When scaling your business, what was / is the most important?
Once the business was up and running and business owners looked to scale their operations, access to finance was less of a concern. Most important was to have a clear vision for the business – a clear understanding of what direction they wanted to go in. Key to that was to have the right processes in pace and the right team behind you.
Q. If trading internationally, or are considering growing your business overseas, what are the main opportunities and challenges you face or faced?
What makes SME business owners most nervous when looking to expand overseas is their lack of local market knowledge and clarity around international legal requirements. Currency risk remains a significant focus but it comes behind the importance of finding and training the right senior team to help manage the business as it expands from purely a domestic focus. Business owners feel least concerned about their ability to scale operations to meet increased demand from new international markets.
Q. When sourcing and developing your internal senior team, what has been the most important to attract and retain top talent?
When sourcing and developing their internal senior team, respondents felt that offering flexible working conditionals was most important, followed closely by a matching of values culture between. Offering bonuses or a profit-sharing scheme was third most important, with opportunities for promotion ranking fourth most important. When it comes to holding on to your senior team, it is important to invest in them through training and development. Do not allow complacency to set in and have a clearly defined career path for them.
Q. What is the most important measure of business value to you?
Interestingly, the business owners polled ranked customer satisfaction as their most important measure of business value. Unsurprisingly profit was second most important and finding a recurring revenue model was a key pillar to building a valuable business. Most owners were not distracted by measuring their business value through employee numbers.
Q. Are you planning to exit your business? If so when and how?
Half the respondents were considering exiting their business in the next 10 years, with most looking at a possible business sale. However, 90% of respondents considering an exit has no exit strategy in place.
If you would like to find out more about the 2017 SME Pinnacle Programme contact a member of the Crowe Horwath team.