AS I SEE IT
BY MARIANNE HERON
Small they may be, but Small and Medium Enterprises (SMEs) are the backbone of our economy. Like physical spines they support the country, providing more than two thirds, yet they don’t get much coverage, and, when they do, the focus is often on their struggle to survive and grow.
Like all of us, SMEs have been battling with rising costs. Other challenges include difficulty in accessing finance, regulatory red tape, difficulty in recruiting and retaining staff and hurdles like Brexit. Pleas for a reduction in the 13.5% Vat rate on hospitality and retail weren’t answered in the last Budget. Key areas for SMEs – companies employing under 250 staff and with turnovers under €50m. – are technology, food, beverages and tourism.
Starting out on your own as the founder of a fledgling business can be a daunting challenge. Founders aren’t alone though, Enterprise Ireland is there in a hand-holding capacity, facilitating business to start ups with supports from start your own business courses to mentorship and grants to grow and maybe go global.
The Entrepreneurship Growth Plan was initiated in 2021 – a kind of national Fairy Godmother – with a longterm vision for the SME sector. The blueprint involves initiatives, to increase export activity, digitisation, cluster hubs to promote networking and climate change initiatives. IBEC, where 90% 0f their membership are SMEs, have called for a competitiveness charter for founders of businesses, with support for research and development, sustainability measures and initiatives to unlock talent via a national training voucher scheme.
Plenty of help and helpful ideas there, but how does it work out in practice? Kilkenny has a strong culture of entrepreneurship with 250 members of the Chamber of Commerce. Minda Client, which represented Kilkenny at the National Enterprise Awards last year, is a happy example of entrepreneurship. A software company offering client management systems, Minda Client was started from the homes of business partners Brian Kelly and Robert Downes 21 years ago. The business has grown from a start, providing management systems for primary schools. to a present where the partnership works with colleges, further education facilities and sells systems for managing scholarship grants in 10 different countries.
Looking back Brian Kelly remembers starting out and then exporting, searching for niche markets against global competition, as two of the most challenging times for the business.
“Starting out with a partner is easier though, two heads being better than with one. There’s a lot of compliance which adds to the burden, particularly at start up if you are not an administrator.”
Technology has made a big difference to exporting where it’s no longer necessary to travel to a country like Australia to do business.
Since the VAT rate increased from 9 to 13.5% almost 600 restaurants have gone out of business. Happily, Thomas Clarke’s popular Fig Tree Restaurant on Kilkenny High Street, offering breakfast and lunch with 15 employees, is not one of them. “Profit margins in the food industry are tight, you can only charge so much for a cup of coffee,” says Thomas.
His restaurant relies on tourism in addition to loyal, local customers.” There have been a lot of price increases since Covid. Most of the profits I make go to the Government, between VAT, PRSI, the increase in minimum wage and extra holidays – and electricity has gone through the roof.” Businesses have to make profits, he points out, in order to replace equipment and renovate.
Goatsbridge Trout is an example of a thriving business. Building on a tradition begun by the monks at Jerpoint Abbey, Mags and Ger Kirwan are the second generation to farm rainbow trout in the clear waters of the Little Arrigle River. Their product range, including fresh and smoked trout and smoked trout caviar is sold at their shop and exported mainly to the UK, France, and Dubai and they have the US market in their sights. Between the trout farm in Co. Kilkenny and their hatchery in Co. Wicklow they have around 40 employees.
“It’s an exciting time. We are investing in infrastructure and modernising for sustainability,” says Mags. “The biggest challenge is to try and find people who want to work in the industry. We really believe in what we are doing and we are ploughing ahead on a journey and loving every minute of it.”
