Business Improvements

Survey reveals one in five businesses in food production sector in danger of going under.

sd — Sat, 01 Jun 2013 16:48:04 +0000

No room for profitability slippage in food production sector.

Following on from last year’s survey of profitability of 50 companies in the food production sector which showed an €11m difference in accumulated profits between the most and least profitable I have updated this for results filed since then. In this latest survey of the same 50 companies the results reveal 2 stark contrasts:
• One in five businesses is doing well – some doing extremely well.
• At least one in five businesses is in significant danger of going out of business due to losses. Cash shortages could mean the figure is even higher.
• The 2nd and 3rd biggest loss-makers had been profitable in the prior year. This demonstrates the volatility and margin erosion in the sector.
• Some of the businesses liquidated since the last survey had lower losses than those still in business.
• Profits and losses are spread across a range of different sectors in food production. One category included 4 of the most profitable businesses plus one which was liquidated.
• The scale of some of the losses raises serious question marks about management & strategy in some businesses.
Copies of the report are available on request.

Change of accountant & change of strategy: Result – A €20,000 tax refund!

sd — Sun, 07 Apr 2013 21:14:19 +0000

Yes that’s right: a €20,000 tax refund.

A business which had for years followed a policy advocated by their previous accountant had put themselves in a position where I identified they had made a large tax overpayment. Following my negotiations with the Revenue Commissioners this company has just received a €20k tax refund.

I’ve come across a number of cases where business owners do not understand the full implications of the accounts they sign. In many cases owners never have the full implications of things such as gross margin properly explained to them often resulting in unnecessary losses.

In this case not only did the directors not fully understand their accounts but the company was overpaying tax to a considerable degree and was borrowing money to pay tax which was not due.

Supermarkets to extract more money from Irish food suppliers

sd — Mon, 11 Mar 2013 10:23:26 +0000

According to a report in the Sunday Business Post (March 10th) Dunnes Stores is seeking an increase of up to 15% in a non-negotiable, one-off payment to fund a ‘lower prices campaign’. No doubt the other multiples will soon follow suit.
For suppliers who do not ‘cooperate’ the consequences of fewer listings, reduced shelf space or even being delisted are very real.
Is it not beyond time that the Irish Government properly regulates the supermarket sector and puts regulations in place which prevents the dominant players from hiding their financial results whilst suppliers in many instances are squeezed of any margins whatsoever to the benefit of the multiples?
It is time for the Irish Government to put a level playing pitch in place to see the real margins being extracted from Irish suppliers and Irish consumers?

Converting pdf sheets to excel

sd — Sat, 03 Nov 2012 14:54:37 +0000

Just started using A-pdf program for converting pdf sheet to Excel. This is a really useful program & can save a lot of work.

Getting the right information & acting on it

sd — Wed, 24 Oct 2012 10:42:02 +0000

Managing a business by just ‘gut feel’ and deciding on courses of action based on the latest bank balance is similar to driving a car in semi-darkness with the lights switched off.
Irrespective of the nature of the business running a business involves owners in
a) Getting reports
b) Reading reports
c) Really understanding reports
d) Taking corrective action
In a world of information overload the importance of dealing with and interpreting this is critical. In summary it involves 5 steps:
a) Getting the appropriate information on a daily, weekly and monthly basis.
b) Interpreting what can be managed and changed.
c) Deciding what can and should be done/changed.
d) Implementing & managing changes.
e) Having a periodic review of where the business is going in relation to the marketplace, competitors etc and a plan to deal with it.

€11m profit difference in SME Food Producers: Why?

sd — Fri, 19 Oct 2012 10:02:14 +0000

The recent survey showing the €11m profit difference between best & worst in the SME food production did not include recent casualties Olhausen or Cappoquin Poultry as they were not part of the companies surveyed. The surprising thing is that one of the most profitable companies in the survey operates in one of those broad product category sectors!

This demonstrates the difference between running a business to a properly researched and evaluated Business Plan implemented with the most appropriate management systems and KPIs (financial and non-financial) for that sector.

Quoting Richard Koch on the 80:20 principles – “If we realised the difference between the vital few and the trivial many in all aspects of our lives and if we did something about it we could multiply anything that we valued”.

€11m sounds like enough of a prize to try harder to ‘get the right things right.’ Very few situations leave no room for improvement.

Food production sector

sd — Mon, 01 Oct 2012 12:01:00 +0000

A recent survey of 50 food manufacturers found the difference in lifetime profits between the best and the worst food manufactures works out at €11m.

Businesses in the food sector are facing significant challenges but there are also major opportunities. To help manufacturers survive and thrive I have written a short paper on the key issues. As well as details of the survey and Bord Bia’s top 10 tips for businesses serving the food service sector the report include:

• 13 key challenges faced by businesses in the food production sector
• 9 issues that need to be addressed
• 6 ways systems and cloud computing can improve profit margins
• 5 benefits of using cloud computing.

If you would like a copy of this paper just complete the form below.

Getting the right information is only part of the solution

sd — Wed, 15 Aug 2012 17:38:00 +0000

Many business owners are faced with numerous issues some solveable by themselves and some outside their control. One of the issues faced by many business owners is getting the right information and getting it on time. In reality there is no longer any reason that business owners should be without the up to date critical information they need.
Through cloud computing this information should be readily available at a low cost.
Getting the right information is only part of the solution.
Getting the right advice to act on the information is also vital.
Formulating a plan and strategy to move the business forward & tackle vital issues is critical for success.

Enterprise Ireland market research centre

sd — Tue, 26 Jun 2012 13:43:50 +0000

Enterprise Ireland have opened a New Market Research Centre for Irish exporters to support Irish companies in developing their export plans. The new centre at Enterprise Ireland’s offices in East Point, Dublin 3, has been designed to provide established and potential exporters with ready access to an extensive set of market research resources. The resources include subscription-based market intelligence databases and leading international periodicals, as well as market and sectoral reports. The service is available to all Enterprise Ireland clients.

Business failure rates. How can we reduce these?

sd — Fri, 04 May 2012 08:35:35 +0000

Stress tests conducted on companies filing their accounts in April 2012 showed a marked deterioration in financial stability compared with Q1 results according to vision-net.ie. 31,070 businesses were subjected to their stress test in Q1. Of these 15,485, (50%) were deemed to be high risk and showing signs of business failure. 17% were deemed to be medium risk. Of the 11,156 companies they stress tested in April, 55% were deemed to be at high risk of collapse, 14% were deemed medium risk and 31% were in the low risk category.
The above highlights the need for businesses to have their key financial information absolutely up to date and their need for updated action plans to deal with the difficult economic environment to prevent business failure. It also highlights the need for very careful monitoring of credit to customers.
What else can be done to reduce the number of companies failing?