There s no time like the present

The first thing to acknowledge is this: there s a world of opportunity out there. Thirty years ago we were an isolated people in what was seen as a relatively remote place. We weren t yet part of the European Union. Transport was expensive. Travel was even moreso. Our telephone system was a joke. Our roads were crap. And taxes were high here, and getting higher. Ireland was a very difficult place in which to get any kind of business going.
Now, all those key factors have been reversed. The advances in communications have all but rendered our island status redundant. All of the infrastructure that a thriving modern economy needs or almost all of it, at any rate is in place. And people all over the world are looking to Ireland as a source of ideas, of creativity and of skills. So, if you have what it takes to make an impact well, there s never been a better time. There s a great big world out there, waiting to hear from you.
Of course it ain t always as easy as it might seem at first glance. To begin with, you need a good idea. And that s only the start of the start. Sometimes entrepreneurs get lucky and a business makes money from the off. But more often, getting yourself and your operation established takes time, hard work, energy and commitment. No matter how positive the prevailing conditions may seem, there s no such thing as a free lunch. You gotta put in the hard labour. And you have to be able to sell what you ve got to offer.
One thing s for certain, though. Taking control of your own destiny sure beats donning the mantle of the hurler on the ditch, who s got the solutions to everyone else s problems and promptly sits there, doing nothing about it. Have no illusions: it s very tough out there in the real politic of business, and often thankless too. But the satisfaction of making something happen, and of creating work and employment in the process, isn t easily matched.
Now, had you realised that there s a really big market for pop rivets in outer Mongolia?

1. Finding a Product or Service

Most of the great business successes start with a simple idea. You may have spotted a gap in the market for a service or product, or a better way of doing an already familiar task. Usually the easiest way for someone to find a new product or service idea is to concentrate on a sector with which he or she is already familiar.
Local and international trade publications are a good source of current information on new developments and market trends. Trade fairs and general travel abroad can introduce many new product ideas. Sometimes these can be copied very effectively to supply a local niche.
The main thing to remember when looking for a new business idea, whether it s a product or service, is that it must be in some way innovative.

2. Feasibility Study

When someone has an idea for a new service or a product they are usually keen to get started right away. But prior investigation and research is crucial if the business is to have the best chance of success. This is commonly known as the feasibility study.
A feasibility study should indicate whether the project has a good chance of succeeding or not. If the indications are that the market is already flooded with similar products or services, or that the margins are too low due to cheaper competition, at least the study has prevented a serious loss.
Feasibility studies can sometimes qualify for grant aid to cover up to 50 per cent of wages, expenses, travel and subsistence costs, consultancy fees, and the cost of developing a product prototype. A good feasibility study can take many months to complete.
It s worth bearing in mind that if a prototype has to be developed, help may be available from a regional technical college, a university with relevant specialists or from Forbairt. Finally, if the feasibility study looks good, the next stage is to build a comprehensive business plan.

3. Preparing a business plan

To remain operational, a business must be profitable, or at least have the potential to become and remain profitable after it has recovered its start-up costs. One well-prepared document is essential to introduce a business idea to bankers, investors, state agencies and business support groups: a business plan.
The financial element of the business plan is fundamental. The other key areas are details of the promoters; how the company is to be managed; how production is to be organised and controlled; and a sales and marketing analysis.
The plan should anticipate the questions anyone considering risking their money in a business should ask. It should explain what the product or service being proposed is, detailing how it differs from what is currently on the market, or, if it is a totally new concept, why it will appeal to people at all. The pricing policy is also vital, both for competitive reasons and for the way it will affect the financial projections.
The plan must show how much it will cost to establish the business and how that money is to be raised. An important aspect, and one that every prospective investor will want to know first, is how much the promoters themselves will be risking, who else is likely to invest, and whether there are to be a lot of borrowings.
The business plan will make clear how much money is going to be needed until the business starts to make a profit. At best, this figure can only be an estimate and it should always err on the high side. Starting the business with a commitment for less than may be needed could spell disaster, leaving the business short of working capital and possibly ruining any chance of success.

4. Finding the Money

In many instances, a business can be set up with very little financial outlay and there s a lot to be said for starting small, but a business with real growth potential usually needs a good start. At the very least, a bank overdraft will probably be needed. For this, a relationship of trust with a local bank and a sound business plan will usually suffice, though personal guarantees may also be required.
Where a substantial investment has to be made, there are some very valuable tax concessions which may be available. These include a return of tax paid in previous years for entrepreneurs investing in new manufacturing businesses that qualify under the guidelines for Enterprise Ireland grant aid. This Seed Capital Scheme is part of the Business Expansion Scheme (BES).
A new entrepreneur, investing in shares in a new business, can claim back income taxes paid on up to #25,000 of income per year, in three of the previous five years. This is particularly valuable to someone who was made redundant and now wants to start a business for the first time.
Smaller companies may get risk capital from community-based funds raised to support job creation or from the Business Innovation Centres which have a small venture capital fund
5. Marketing

Marketing is a broad term, which incorporates advertising, promotion, public relations, pricing, packaging, design and all activity that gets your product out, seen and sold.
When you know that you have a product with real potential, it is vital to draw up a clear Marketing Plan. When you know what you want to achieve, you can then pick and choose which marketing tools to use (advertising, PR, direct mail etc.).
A successful Marketing Plan rests on a sound Business Plan which tells you how much money you need to generate in order to break even, clear a profit and, eventually, expand. Don t lose sight of your goals; choose your tools carefully. Some require more time than money, others more money, less time. As your business grows and changes, you will need to evaluate the tools you are using to meet new challenges. Some, however, you should never stop using. Especially those that help you to think and review operations from your customers point of view. Keep in touch with them with mailing lists, follow-ups, thank you notes and personal contact.

6. Decide how you want to trade

Before a business can start trading, its directors need to decide which legal form to adopt. This decision affects the way a business is taxed and the accounting records required. A business can be unincorporated, such as a sole trader or partnership, or an incorporated limited company. A business can also be a co-operative or a limited partnership.

Sole Trader
Simplicity and convenience are the main advantages of a sole trader business. This type of business can be run by an individual using his or her name without any formalities. For tax purposes, the owner is regarded as a self-employed person, though they can employ others. But if that person decides to trade under a name which is different to his or her own, they must register their business name with the Registrar of Business Names at Parnell House, Dublin. Tel. (01) 8045200.

Partnership
A partnership is an extension of the concept of the sole trader to cover cases where two or more people join up to provide a service. It is mainly intended for professional partnerships and is not really suitable for, say, a manufacturing business. The advantages for sole traders and partnerships is that confidentiality is maintained since the public has no access to accounts. It is relatively easy to transfer the business to a limited company at a later date.

Limited Company
The limited company is considered to be the best way of running most businesses of any size. The business is an entity, separate from any individual and owned by the shareholders in direct proportion to the number of shares held.
The shareholders are required to meet at least once a year and appoint a board of directors (at least two) to run the business for them. If the business fails, a shareholder can only lose the value of the shares he or she holds, giving them limited liability. However, a director can be liable for some debts if it can be shown that he or she acted negligently.
Limited companies are regulated by law and must be registered with the Registrar of Companies at Parnell House, Dublin. Tel. (01) 8045200.
The Companies Act, 1963-1990, available from the Government Publications Office, lays out precise requirements for the presentation of accounts and the information to be contained within them. Alternatively, for more details consult an accountant or a solicitor for advice on structure.

7. Register for Tax

You should advise the tax office as soon you start in business. You can do this by filling in a Registration Form STR (for use by individuals setting up in business where anticipated turnover will be less than #100,000 per annum) or Registration Form TR1. Both are available from any tax office. These forms can be used to register for any or all of the following:
Income Tax
Employer s PAYE/PRSI
Value Added Tax
If you are setting up a company you should fill in a Form TR2. This can be used to register for any or all of the following:
Corporation Tax
Employer s PAYE/PRSI
Value Added Tax
Shortly after registration, you may receive a visit or you may request a visit from a Revenue official to assist you in operating the tax system. Any difficulties or queries will be dealt with and general assistance will be given to help you comply with your tax obligations. You can request a New Business Visit from you local tax office or in the Dublin area by phoning the Taxes Central Registration Office at (01) 8746821.
For further advice or information on the above contact the following: Enterprise Link at 1850 35 33 33; The Revenue Commissioners Information Office (01) 878 0000.

START-UP GROWTH

Farrell Grant Sparks is a leading independent accountancy and business consulting firm, with a broad range of clients in major growth sectors, including the media, arts and culture, software and electronics, tourism and leisure, financial service and other manufacturing and service industries
Farrell Grant Sparks specialises in providing comprehensive business planning and support services. Their approach is both practical and comprehensive, blending specialist finance and business skills according to the specific needs of each project. The range of services encompasses business development strategies, tax-based investment and funding, project management, product concept development, economic assessments, and feasibility studies.
Selecting the most appropriate combination of funding mechanisms is central to the success of any project and Farrell Grant Sparks can advise you on your eligibility for funding and on evaluating the alternatives such as equity or bank finance.
If you are an investor, they can help you to find the right project and can maximise your return by sourcing good quality investment opportunities with the potential for high growth. The climate for investment in the entertainment industry has been transformed in recent years, as a result of market expansion and the introduction of key incentives for investors.
Farrell Grant Sparks have recently completed a report entitled Serving the Entertainment Industries on behalf of Enterprise Ireland, which is available from their offices.
For further information, contact. 01 418 2000 or [email protected] www.fgs.ie

HELP FOR NEW BUSINESSES

SoHo What's it all about!
More and more people are now considering the option of working at or from home, at least for a few hours a day. This is due to a combination of factors commuting problems, spiralling property prices and lifestyle choices.
Market research indicates a significant increase in the level of PC ownership in Ireland. It is against this background that AIB has launched its Small Office/Home Office Finance Pack (SoHo).
The financial package has been developed specifically for those who want to set up an office at home, or for small business owners wishing to fit out a small office. Amounts from IR#1,000 to IR#5,000 are available specifically to cover the cost of small office equipment and furniture. Repayment terms can be arranged over periods of 12 to 36 months. Interest rates are fixed at 8.99% (typical APR 9.29%).
If you sign-up and become an active user of either AIB's Electronic Business Banking or AIB's internet banking option, AIB 24hour-online, the interest rate on your loan will be reduced by 2% (from 8.99% to 6.99%) after a three month period from registration.
To apply for a small office/home office loan all you have to do is pick up the phone and call AIB at 1850 27 27 27.

Profile: Caroline Henry
The spectacular success of the Irish music industry over the past decade has created a new breed of entrepreneurs who are willing to identify opportunities and take risks where they arise. Caroline Henry, who first came to prominence working with Hothouse Flowers is a good example. After several years working in a variety of roles within the music industry, she now runs her own successful event/project management company.
"My main motivation for setting up my own business is that I enjoy the diversity that it brings," she offers. "One day I might be working on a television show and the next day I could be tour managing a band. The main advantage now is that I can take on clients and projects that I am interested in. The disadvantage is, of course, that if you have a quiet month the rent and bills still have to be paid."
Henry's route into the music business was not that unusual. Having been, as she puts it, "rejected by every record company and promoter in town," she moved to Dublin from Cork and took a course in sound engineering. "It worked," she explains. "Through the course I got a job in the Factory rehearsal studios, where I stayed for six years, mainly working with Hothouse Flowers."
Following that she began working as co-ordinator on high profile projects such as the Heineken Hot Press Awards, Heineken Green Energy Festival, and the MTV awards. She has tour managed bands such as Therapy? and Joyrider and worked with Bill Whelan on the recording of Riverdance. She also worked extensively with MCD concerts on outdoor events such as Feile, Slane and in the UK on projects such as T in the Park. She also booked music acts on the Kenny Live show for four years.
According to Henry, once the decision was made to go out on her own it was easy to set it up.
"I financed the company with my own savings and therefore didn't have to take out loans. I'm really lucky in the sense that my tools and equipment are my knowledge of the music business and the contacts that I have built up over the last ten years. If you do a decent job, word gets around pretty quickly my customers are people that have been and continue to be very good to me because of the work I have done with them in the past.
"My work now is as diverse as booking a private plane to making laminates," she says. "No job is too big or small. It's what I dreamt of getting into all along, and I'm having a great time doing it."

BACK TO WORK ALLOWANCE

The Back to Work Allowance (BTW) is an incentive for unemployed people, lone parents, and people with disabilities to help them to return to work or to start their own business by continuing to receive part or all of their social welfare payment for up to four years. People applying for BTW must be getting one of the following social welfare payments for 12 months or more in order to qualify.
Unemployment Benefit
Unemployment Assistance
One-Parent Family Payment
Disability Allowance
Blind Person's Pension
Carer's Allowance
Farm Assist
Applicants must also be over 23 years old (except for lone parents and people with disabilities who can be under age 23). Qualified Adults or people getting Unemployment Benefit/Assistance can also qualify (this involves the claimant transferring their entitlements to that of Qualified Adult).
People starting their own business who qualify for BTW can keep their full social welfare payment for the first year, 75% for the second year 50% for the third year and 25% for the fourth year. They can also retain the medical card for four years.
Retention of secondary benefits such as Fuel Allowance may be subject to a combined household income limit of #250 gross per week. The rules for retention of secondary benefits are being improved from April 2000.
Financial assistance is also available for business plans and relevant training.
The rate of Back to Work Allowance will not be affected if your spouse or partner takes up work. However, if your combined income is over #250 gross per week, your secondary benefits may be affected.
The Back to Work Allowance is not subject to PRSI or income tax deductions. However the income earned from employment or self-employment is liable for PRSI/Tax.
As a further bonus, if you employ extra workers you will not have to pay your share of their PRSI contributions for the first two years. The workers you take on must have been signing on the Live Register for at least 13 weeks immediately before you employ them or be under age 23 and taking up work for the first time. People getting the One-Parent Family Payment or who have been on a FAS, CERT or TEAGASC scheme for 13 weeks before you employ them also qualify for the exemption.
For more information contact Employment Support services, Social Welfare Services Office, P.O. Box 3840, Dublin 2. Tel: 01 7043867/7043169, or your local social welfare office.

Jack s Hits

JACK L and his management company 38 SCR are hoping for even wider success, via the internet and BES funding.

38SCR is the management company behind Jack L. Under mainman Martin Clancy, the company has already achieved formidable commercial success, with Jack regularly filling venues the length and breadth of the country, including a recent Valentine s Day gig at The Point, not to mention sell-out shows in Europe and America. Meanwhile, Jack s Metropolis Blue album and Georgie Boy single charted well in Ireland and Jack is one of the artists pioneering eMuse, a new pan-European digital music TV station.
The latest instalment of the whole Jack L/38 SCR liaison comes via the Business Expansion Scheme, a Government initiative which was initially set up in the mid-80s to encourage investment in Ireland s manufacturing industry, but the scope has since broadened to cover other areas, including music. Basically, investors will put their money into the next Jack L album.
Part of what we are doing, on an ongoing basis, is ensuring that Jack retains his copyright and licensing abroad, explains Martin Clancy. Whether that is via the internet or via conventional record companies, whatever way it s done, that is the basis of the business, and the BES scheme is just an extension of that. Essentially, it is the musical equivalent of Section 35 for film.
While there would be no shortage of admirers queuing up to have a piece of Jack L, Martin emphasises that they took this scheme on board in a manner that didn t target the fans.
It is targeted towards people who are looking at investing in BES anyway. We have been very careful to avoid targeting fans so we have kept a relatively low profile. We are basically competing with other BES companies.
BES is merely the latest in an ongoing series of projects involving Jack L and 38 SCR, who have achieved their current standing without the backup of a major record deal, a fact which Martin attributes to two things: hard work, and having the belief to back it up.
About three years ago, myself and Jack took out a #30,000 personal loan from Bank of Ireland. We did that as opposed to taking a small record deal with a multinational label. Any money we have made has been ploughed straight back in. We have often taken the slower road, he admits, in order to make sure that we succeed in our goals.
It has obviously worked. The internet in particular has been hugely successful for them, with Martin admitting that it is the centre of our business . Established just two years ago, the website (HYPERLINK "http://www.jacklukeman.com" /www.jacklukeman.com) has recently recorded its one millionth hit, and has been a vital part of the business, aside from its obvious commercial potential.
The web allows us the ability to skip through time-zones and allows me to deal on an individual basis with each of the territories we re working on, Martin says. So much so that I couldn t conceive how I would have done this five years ago.