Category Archives: Uncategorized

Sensitivity analysis template

A Sensitivity Analysis Template allows you to show the impact of particular changes in your business plan.

For example, if your sales are higher than previously forecast, this can be reflected in the sensitivity analysis several times. The template will automatically modify your gross and net profits for each of those occasions, along with other applicable areas.

To give a detailed analysis, the template also covers:

  • Sales
  • Cost of sales
  • Wages and salaries
  • Sales and marketing
  • Administration expenses
  • Operating expenses
  • Depreciation
  • Operating income
  • Interest on loans

This simple template is a fantastic resource for businesses, and should be used in conjunction with the ThinkBusiness.ie Business Plan Guide.

This post was originally published here - https://www.thinkbusiness.ie/articles/sales-plans/ on
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Protect your intellectual property

Your business idea is often the best thing you have. Here’s how to protect your intellectual property.

Intellectual property (IP) rights are a crucial part of business planning, as they are the only form of protection business owners have for product invention and innovation. Simply put, they are the legal tools that protect your investment in product innovation, and stop others from exploiting that without your permission.

Business owners must protect their own IP, and ensure they don’t infringe on the IP of others. To do this, a plan must be put in place. There are three main areas of a business that can, and should, be protected.

Brand name and logo

The only way you can fully protect your brand name and logo is by registering them as registered trademarks. Just because you have registered a business name with the Companies Registration Office (CRO), for example, doesn’t mean that it can’t be duplicated by someone else.

A trademark is any distinctive sign that can distinguish the goods or services of one trader from those of another and which can be represented graphically, such as Coca-Cola. Trademark registration is similar to registration of title in property. Once it is registered, it cannot be used by anyone else for similar goods and services without the permission of the trademark holder. The initial application fee is modest, and it generally takes around six months to become registered.

It is important to remember that Irish registration does not protect the trademark abroad. If your business wants to protect its trademark in other EU countries, you can apply for a Community Trademark.

Before registering a trademark, it is important to:

  • Ensure no one else has trademarked your chosen brand name or identity.
  • Ensure your trademark doesn’t closely resemble another, or that there isn’t an application pending for a similar trademark.

See the section on trademarks on the Patents Office website for more information.

Patents

A patent is an exclusive right granted for an invention that is a process or product that provides a new way of doing something, or offers a new solution to a problem. It confers upon its holder for a limited period the right to exclude others from exploiting the patented invention except with the consent of the patentee.

Patents can be considered to protect the way something works. Remember that a non-patented invention that falls into the public domain is free for all to use, so completing the process, if applicable, is highly important to protect yourself.

There are three criteria necessary to secure a patent. That it is:

  • New
  • Involves an inventive step
  • Capable of industrial application

So, not every product will be patented. But if you believe your invention meets the criteria above, as long as the invention is secret and not known to the public, you can apply for a patent at any time.

However, you should consult with a patent agent so that you don’t apply too early (when the invention is not fully developed) or too late (when someone could have filed a patent for the same invention before you). Be sure to check whether your patent already exists before you file for one.

Patents last for 20 years. However, short-term patents of 10 years are also available in Ireland. Remember, the Patents Office will not help you to develop or market your patent.

Design registration

This covers aesthetic creations such as the contours and shape of a particular product, packaging or label. Design registration protects the way a product looks, and is the only way to get exclusive rights to such aesthetic creations. An example here would be a perfume bottle.

Benefits of an IP strategy

  • Reviewing competitors’ IP can provide competitive intelligence.
  • Reviewing other patents can help you avoid wasting time on products that are already out there.
  • IP research can identify potential collaborators.
  • Businesses that have planned for extensive IP protection can attract investment.
  • A ‘qualifying patent’ could attract tax relief.

IP pitfalls to avoid

  • Not registering trademarks.
  • Assuming registering a company name with the Companies Registration Office (CRO) gives equal protection to that provided by trademarks.
  • Trying to patent a product after it has been launched on the market.
  • Not registering designs.
  • Not planning for IP creation.
  • Not budgeting for registration of IP.
  • Falling foul of another business’s IP rights.

4 Action Points

1

Create an IP strategy. This is a worthwhile and beneficial process for your business.

2

Protect your brand name by registering for a trademark. This ensures that no other business or person can use that trademark for similar goods and services without your permission.

3

If you have invented a product, apply for a patent. This will ensure that you are protected from exploitation by others.

4

If you have developed an aesthetic element of your product, start the design registration process. This will ensure exclusive rights to the look and feel of what you’re offering.

 

This post was originally published here - https://www.thinkbusiness.ie/articles/how-to-protect-intellectual-property/ on thinkbusiness

Six hidden Irish tourism gems

Here are six inspirational tourist activities in Ireland that are a little ‘off the beaten track’.

Tourism is big business in Ireland. As a sector it will welcome 8.2 million visitors to the country in 2016 and deliver over €4.4 billion to the Irish economy. Here are six gems on the fringes of this vast industry that may inspire anyone thinking of starting a small tourism business in Ireland.

Pure Magic tours

Pure Magic

Where? Dollymount, Dublin

A charismatic water sports company in Dollymount, Pure Magic, has a team of instructors dedicated to all things kite surfing and SUP (stand up paddleboard). It’s known for exceptional customer service. There’s also a Pure Magic Lodge on Achill Island for action-packed getaways.

mor active

Mór Active

Where? Killarney

If you’re searching for a deep insight into Ireland’s natural beauty, culture, and traditions, Mór Active is a good call. It offers tailored activity, culture and eco tours. You can see the wonders of Killarney, the Ring of Kerry, Dingle, and the Wild Atlantic Way through the eyes of an expert. Founded in 2007, Mór Active’s glowing TripAdvisor presence sets an example for other Irish tour operators to follow.

Where? Dublin

Pat Liddy’s Walking Tours of Dublin started in 2005 by local historian, author, artist and cartographer Pat Liddy. It’s by no means a one-man operation, however. The company’s success is also powered by a team of guides, featuring English, German, French and Spanish speakers. As a starting point, book the ‘Highlights & Hidden Corners’ tour, a fascinating stroll from North to South Dublin.

Bike park

Bike Park Ireland

Where? Roscrea, Co Tipperary

With the first trail constructed in 2012, Bike Park Ireland soon became the first official mountain bike park in Ireland to offer a day out for cyclists of all skill sets. There are six downhill trails and the uplift service – an ex-army truck with 30 bus seats and a bike trailer – turns uphill transportation into a real adventure.

howth

Shane’s Howth Hikes

Where? Howth, Dublin

Just half an hour from Dublin city centre by car, Howth village provides a welcome escape from city life. Shane’s Howth Hikes tours are as popular with locals as they are with visitors. Customers can book ‘The Howth Heritage Free Walk’ as a starting point, and if they’re keen to explore more, the ‘Howth Safari’ is an inspiring hike.

Boyne boats 1

Boyne Boats Adventure

Where? Drogheda, Co Louth

One in five tourists visit a destination because they have seen it on a TV show. Boyne Boats’ currachs were used in the filming of Game of Thrones. The Boyne Boats adventures include ‘Paddle like an Iron Islander’ and ‘The King’s Tour’. The tour is an hour of rich local heritage as customers learn to paddle like a true warrior. This is one of Ireland’s real hidden gems.

Do you want to start a tourism business?

Interested in setting up a tour or activity company, or finding tips for your existing one? Here are five tips for finding the right price for your tours and activities.

 

***COMPETITION: Win a brand new iPad Air 2.***

 

READ: Thinking of starting a tourism business in your local area? Make sure you get your business plan right and get the money you need.

Article by Lucy Fuggle of TrekkSoft.

Images from TrekkSoft and Shutterstock.

 

This post was originally published here - https://www.thinkbusiness.ie/articles/secret-tourists-spots-ireland/ on
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New cure in sight for injured horses

A biomaterial that repaired damaged knee cartilage in a horse has been developed in Ireland. It could soon be used to repair injuries in people.

A team of researchers in Ireland has developed a novel biomaterial that has repaired damaged knee cartilage in an injured thoroughbred filly, Beyoncé.

The patented multi-layered 3D porous scaffold, called ChondroColl, was developed by a team of researchers from the RCSI Tissue Engineering Research Group and the Advanced Materials and BioEngineering Research (AMBER) centre led by Professor Fergal O’Brien. 

Beyoncé returned to competitive show jumping following implantation of the new biomaterial.

“We are delighted with the outcomes from both pre-clinical studies and particularly with the results from the Beyoncé case,” says Prof. O’Brien. “Our hope for the future is this technology will benefit human patients. Through our spinout company, SurgaColl Technologies, this is very close to becoming a reality with first human cases anticipated in the coming months.”

“[This] new technology demonstrates our track record of pushing the boundaries of science to discover real solutions for people,” says Prof. Michael Morris, director of AMBER. “As well as improving the lives of thousands of people, this technology could have real applications in the veterinary sector.” 

READ: 10 Irish inventions that changed the world.

Image from Shutterstock.

 

This post was originally published here - https://www.thinkbusiness.ie/articles/new-cure-for-horse-injuries/ on thinkbusiness

Six winners who beat adversity

Overcoming adversity early in life can sometimes drive a person to do great things in the world of business.

 

Shahid KhanShahid Khan moved to the US from Pakistan and washed dishes for $1.20 an hour. 

On his first night in America, Khan stayed in a $2 a night room in an Illinois YMCA. He was 16 and had just moved from Lahore, Pakistan to study Mechanical Engineering at the University of Illinois. He landed a job with automotive manufacturing company Flex-N-Gate, which he ended up buying in 1980, just 13 years after he arrived in the country. Khan grew the company into a multi-billion dollar empire. He is now personally worth approximately $6.5 billion. He is the richest Pakistani-born person in the world. 

Oprah Winfrey money

Oprah Winfrey was born into poverty and wore dresses made of potato sacks. 

Born to an unmarried teenaged mother, Winfrey spent much of her childhood living in extreme rural poverty with her grandmother, while her mother worked as a maid in the city. She was bullied in school for wearing dresses made of potato sacks. At the age of six, she moved to the city to live with her mother but ran away at 13 following years of abuse. She later became an honours student and won a scholarship to the Tennessee State University. She got a part-time job with a local radio station and began forging her career in the media industry. Today, she is America’s first and only black multi-billionaire and considered one of the most influential women in the world. 

“She is the first person in history to have become a billionaire through writing books and is one of the richest women in the UK”

JK Rowling money

JK Rowling was a single mother living on social welfare when she wrote Harry Potter. 

Although born into a middle-class family, as an adult Rowling found herself unemployed with an infant daughter to look after. Living off welfare benefits, she considered herself a failure and was diagnosed with depression. However, it was during this period that she finished her first Harry Potter book which, following a string of rejections, was finally published by Bloomsbury. The series of books became the best-selling book series ever and spawned one of the highest-grossing movie franchises of all time. She is the first person in history to have become a billionaire through writing books and is one of the richest women in the UK.

John Paul Dejoria money

John Paul Dejoria was sent to live in a foster home and was later a member of a street gang. 

A first generation American, born to an Italian father and a Greek mother, DeJoria found himself selling Christmas cards and newspapers at the age of nine after his parents divorced. When it was deemed his mother couldn’t support him and his brother, they were sent to a foster home. Following a stint in a street gang, DeJoria had a number of different jobs – from a brief time in the Navy to working as a janitor – before taking out a $700 loan to co-found John Paul Mitchell Systems. The company made hair care products, and DeJoria initially went door-to-door selling shampoos while sleeping in his car. It was the first of many business ventures for DeJoria, who is now a multi-billionaire. 

sean o'sullivan

Sean O’Sullivan worked as a cleaner at his school to help support his eight siblings and his single mother. 

Originally from Cork, O’Sullivan’s mother found herself raising nine children alone in poverty in Albany, New York after her husband walked out. Packed into a tiny, freezing apartment with his eight siblings, O’Sullivan worked as a janitor in his high school to help keep a roof over his head. Working to pay his way through college, he studied electronic engineering and started a computer street mapping company called MapInfo. He was worth $17m in 1994 when that company floated. He has gone on to become a leading venture capitalist and philanthropist. The multi-millionaire splits his time between New Jersey and Cork.  

roman abramovich money

Roman Abramovich was orphaned and raised by his grandparents in the harsh Russian Arctic Circle. 

After his parents died, when he was only three, Abramovich was raised by his grandparents in Komi, a dark and bitterly cold region of Russia. As an adult, he dropped out of college twice, served in the army and even sold plastic ducks in Moscow (his first business venture). Political connections helped him amass a vast fortune in oil, steel and gold, and today he is the 137th wealthiest person in the world and the owner of Chelsea Football Club. 

READ: Success in business is all about planning. Plan well before you start.

 

Article by Peter Flanagan.

Images: Oprah Winfrey: DFree / Shutterstock.com; Roman Abramovich : magicinfoto / Shutterstock.com; John Paul Dejoria: s_bukley /Iurii Osadchi / Shutterstock.com; Shahid Khan: Forbes; JK Rowling: Everett Collection / Shutterstock.com; Sean O’Sullivan: no-repro.

This post was originally published here - https://www.thinkbusiness.ie/articles/great-business-ideas-winners/ on
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DJ O’Dwyer – ‘My motivation isn’t money’

‘Our business is all about adding years to your life and life to your years.’ 

Our primary aim is to provide people who have had coronary heart disease the confidence to live a normal life again, and we know it is working because doctors are now referring people to us.

Our biggest achievement so far was hitting breakeven after nine months. The feedback for the idea was positive from the start so I wasn’t surprised how well it went, but it was still nice to get to that point. 

My motivation?

It may seem strange, coming from a business person, but I’m not motivated by money. 

I guess everybody wants to be successful but what motivates me is the fact that I can help change people’s lives. I’ve worked with people who literally couldn’t get out of a chair when we started with them, and it’s just great to see the improvements we can bring.

As an entrepreneur, you are going to get disappointing moments along the way. For me, it has been times when we have introduced a new service that didn’t get as much traction as I expected. The only way to respond is to go back to the drawing board and make it better. 

The fact that my wife Sarah now works in the business with me is great. We help each other over disappointments when they arise.

As for the stress of running a business? I love sport. If I can get out on the bike in the morning before work, I feel great. I was a strength and conditioning coach for rugby teams in the past and ran my gym for seven years. I’m a big believer in the importance of exercise. 

“Don’t go into business to be better than someone else”

If I were to do it again? 

I’d sit down more and plan. It’s important to have a plan A regarding what you want your business to look like, but you also need to have a plan B, C and D. In our case that meant adding strings to our bow to include not just coronary care but diabetes and weight management. It would have helped me to know that from the beginning.

Lessons learned in that others could apply?

Don’t go into business to be better than someone else. Go into business to be the best at what you do. 

When I opened my gym, my aim was to compete with 14 other gyms in the Clonmel area. Ultimately it was a mistake. It cost me money, and I had to close it down. By contrast, we are the only standalone business offering the services we do. 

How did I raise the money to start? 

It wasn’t a hugely capital intensive business to establish, but I did have to buy equipment. I had some savings, just enough, but to be honest, if it wasn’t for the financial assistance we got from South Tipperary Local Enterprise Office I don’t think we’d be here today. They provided us with 50% funding of our costs.

What would have made the start easier?

Not much, again thanks to my local LEO. The support I got was amazing. Not just on the financial side but their positivity, and the fact that they got eight different people to go through my business plan with me. You couldn’t buy that kind of help.

“Don’t wait for things to happen, make them happen for yourself”

Who has inspired or motivated me?

My Dad, Don. He had a triple bypass operation in 2013, and when he came out of cardiac rehab he asked me, ‘Where do I go now?’. And there was nowhere, which is what gave me the idea for the business.  

Unfortunately, my father passed away a year and a half ago, not from his heart but from cancer. For me, his legacy is that he was the inspiration behind a business that has helped so many people in the Clonmel area to enjoy healthier lives. 

He was also a great worker, a very honest man, and a terrific father. He always told us don’t wait for things to happen, make them happen for yourself.

“It’s important also to know when to call it a day if something isn’t working”

What’s my attitude to risk?

If you’re going to be in business, you’re going to have to take a chance. I’ve taken a risk before, with my gym. Yes, I lost money on it, but I wasn’t stupid. I didn’t end up owing anyone money; I never let the family suffer as a result of it, and I never put the house on it. It’s important to be able to take a risk, but it’s also important also to know when to call it a day if something isn’t working.

What’s my ambition for the business?

To be a national provider of cardiac rehabilitation services. Thanks to your success here in Tipperary the plan is to roll it out nationwide as a franchise.

If there was one thing you could change about business culture in Ireland, what would that be?

The more people who support local businesses, the better, both for the businesses and for the local communities. I’d like to see more of it because I think it’s a classic win-win.

 

 

This post was originally published here - https://www.thinkbusiness.ie/articles/dj-odwyer-heartwise/ on
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How much is your business worth?

If you are thinking about selling your business, you need to know what a reasonable price for it would be. 

Most SME owners want to know how much their business is worth. If you want to buy a business, you need to know how much is reasonable to pay. Here’s a quick guide.

(Maintainable EBITDA x Multiple) +/- Net Assets = Valuation

EBITDA stands for Earnings Before Interest, Tax, Depreciation and Amortisation. It is the income (also called sales or turnover) of your business minus the costs, but before taking away any interest payments, tax payments, depreciation or amortisation charges.

The value of a small business is worked out by calculating the maintainable EBITDA, multiplying that figure by a multiple and then adding/subtracting the net assets of the business.

“Maintainable” refers to what EBITDA is likely to be in the years ahead, ignoring any temporary developments this year and taking into account factors such as the industry or sector that you work in or the opening of a competitor in the area. 

The multiple could range anywhere from between one to 15. It will depend on your industry. A pharmacy would be worth up to six times EBITDA. A nursing home would be worth 12 times its EBITDA. A hotel could fetch a multiple of 15 times its EBITDA. 

When buyers are deciding on a multiple to use there are many factors they consider:

  •    Type/sector of the business
  •    Turnover level
  •    Sales mix
  •    Gross margin = (sales – cost of sales)/sales
  •    Wage costs
  •    Rent and other overheads
  •    Future growth potential
  •    Lease terms (if applicable)
  •    Future profits and cash generation from the business
  •    Competition, including potential new openings

There is no magic formula for calculating the earnings multiple but all of the above factors should be considered in assessing the valuation of your business.

Jason Bradshaw FCA

Jason Bradshaw is director of corporate finance at PKF O’Connor, Leddy & Holmes Limited. He specialises in advice on the sale and valuation of companies, acquisition of businesses and general business advice.

This post was originally published here - https://www.thinkbusiness.ie/articles/how-much-is-my-business-worth/ on
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A handy business jargon buster

Are you a going concern with internal control of a revaluation reserve? If this is all a bit ‘confused.com’  – read on. We’ve got you covered.

Accounts payable: this is a liability or obligation to pay a creditor or supplier because of a credit transaction. This is money owed by your business. See ‘Creditor’.

Accounts receivable: this is money owed to your business by customers or other debtors through a credit transaction. See ‘Debtor’.

Accrual: this is a provision that an accountant makes for expenses that have not yet been billed to you, but relate to expenses in a specific period. If, for instance, you have a year-end of December and no bills have been received for December, then your accountant will include an accrual for those expenses in your accounts.

Accumulated profit: these are retained earnings. This is the balance of profits retained in the business and not paid out to owners in dividends.

Acid test (quick ratio): this is a key financial ratio that measures what assets can easily be converted into cash to pay your business’s obligations in the event that sales ceased. Work out the acid test or quick ratio for your business by using the ThinkBusiness.ie ratio template.

Amortisation: this is the term given to the process of writing off or reducing the value of an asset (usually an intangible asset such as goodwill) over a period of time.

Asset: something of value which is owned by a business and which has a measurable cost.  Assets are classified as fixed, current or other assets. Fixed assets are assets that are needed for the long-term use of the business, such as property or equipment, and are not for sale. Current assets are those assets which can be turned into cash more easily than other types of assets, such as cash on deposit, debtors and stock. Intangible assets are those that cannot be physically touched. See ‘Goodwill’.

Auditing: the practice whereby an independent auditor reviews accounts and provides an opinion, stating whether or not the accounts give a true and fair view of the financial position of the company.

Authorised capital: also known as nominal share capital, this is the maximum amount of share capital a company is authorised to issue by its Memorandum & Articles of Association. The actual amount of shares issued to shareholders is the issued share capital.

business jargon buster

Book value: this has two meanings. This could be the value of fixed assets plus tangible assets in the books after the deduction of accumulated depreciation. Or it could be the value of ordinary shares in the books, which is arrived at by taking owners’ equity less preference shares and dividing this by the number of shares issued.

Balance sheet: this is often described as a financial snapshot of a business, but in reality it is a historic snapshot. It shows the assets owned by a business and how they are financed through liabilities and owners’ equity.

Budget: this is a financial plan covering a specified period, usually a year, which is a useful tool to allow business owners and managers to set financial targets.

Cashflow: this shows the differences between cash receipts and cash payments. A cashflow statement shows the major cash inflows and outflows. The ThinkBusiness.ie cashflow calculator can help you manage your cashflow.

Cost centre: this is a part of a business which generates no revenue or little revenue, but which has costs that must be absorbed by the business.

Contribution: this is an accounting term which takes account of the amount of sales less any variable costs which is the amount (or contribution) that is available to cover fixed costs.

Current asset: see ‘Asset’.

Current liability: see ‘Liability’.

Creditor: a customer or others to whom your business owes money.

Debtor: customers or others who owe your business money.

Depreciation: this is an accounting process where the cost of a fixed asset (like equipment) is spread out and charged as an expense over its working life.

Equity: capital invested by the owner plus retained profits.

Factoring: this is a mechanism used by some businesses to improve their cashflow. A financial institution buys a firm’s trade debtors and takes on the responsibility of collecting the debts that are due. They pay the company up-front for the debtors less a percentage charge of the invoice value.

Finance lease: lease where the ownership and risks have passed on to the lessee. This is shown as a liability in the balance sheet.

Fixed asset: see ‘Asset’.

Fixed costs: these are costs which tend to remain unchanged even if the level of activity changes, such as rent or depreciation. See ‘Overheads’.

Going concern: this is an accounting concept which assumes that a business will continue to trade indefinitely.

Goodwill: this is an intangible asset which usually comes into play when there is an acquisition. Goodwill represents the difference between what is paid for a business and the net asset value of that business. It is only recorded in the accounts when it is purchased.

Gross margin: see ‘Margin’.

Gross profit: this is sales revenues less the cost of what is sold. So in a retail environment, the cost of the stock is taken away from the sales to arrive at a gross profit figure.

Income statement: also known as a profit and loss account, or an earnings statement.

Indirect cost: this term describes a business expense which cannot be directly attributed to a product service or production. Examples include light and heat, administration expenses, and insurance.

Internal control: these are policies and systems that are put in place by the board to manage financial risk.

Inventory: stock of goods or merchandise which is available for resale. Often referred to as stock.

Invoice: the bill you send to your customers for the goods or the services your business has provided. Apart from the details of the product or service, as well as the amount and the VAT to be charged (if applicable), it should include your company or business name, your VAT number and contact details for your business.

Joint venture: a company which tends to be jointly owned by one company and one other party (or several other parties). Typically, there is a contractual agreement between the parties about the joint venture.

Journal: the chronological record of transactions in your business’s accounts.

Issued capital: these are the actual shares issued or sold by the company. See ‘Authorised capital’.

Key Performance Indicators (KPIs): ways by which a business can measure and monitor certain important measures that are important to the delivery of goals and are critical to its financial success. An example would be the average number of days trade debtors have payments outstanding.

Lease: this is an agreement whereby the owner of an asset allows someone else to use it for a fee, usually paid monthly.

Ledger: a group of accounts.

Liability: this is an amount owed by the business to creditors, the Revenue, or others, outside the business. It can also be an amount owed to the owner of the business (e.g. directors’ loans). A business or person, to whom the business has a liability, can claim against the assets of the business. Current liabilities are due for payment within a year. Long-term liabilities are not due for payment within one year. They include long-term loans (not overdrafts), bonds and mortgages.

Liquidity: availability of cash or assets which can easily be turned into cash if the need arises.

Long-term liability: see ‘Liability’.

Loss: when costs and expenses exceed the amount of income (or turnover) a business generates, this results in a loss.

Loss on sale of fixed asset: if you lose money on the sale of a fixed asset (like property or machinery) this is treated as an “other expense” in the profit and loss account.

Management accounts: accounts that are created for day-to-day use within a business.  They are usually not shared with anyone outside of the business, except perhaps with an accountant or a financial adviser, or in some instances a financial institution.

Mark-up: this is profit expressed as a percentage of costs. So if a product is bought for €100 and there is a 50% mark-up, this results in a retail price of €150.

Margin: this term means profit expressed as a percentage of sale. A gross margin expresses that profit before any overheads and merely the cost of the goods or services, while a net margin takes account of those costs plus any overheads in the business.

business jargon buster

Marginal cost: see ‘Variable cost’.

Mortgage: this is a long-term loan normally secured on fixed assets such as a house or another property.

Net: this has two meanings. The first is that net is a figure after deductions, so for instance gross profits less overheads and taxes equals net profit. The second meaning is payment of the full amount with no allowance for a cash discount (net 30 days, for example).

Net asset value: another term for shareholders’ funds or equity. It’s the total assets less total liabilities.

Net margin: see ‘Margin’.

Net current assets: current assets less current liabilities.

Net profit: profit after tax.

Net worth: another term for shareholders’ funds, or equity.

Non-operating expense: an expense which is not directly related to normal operations.

Non-operating income: income which did not arise from normal operations.

Opening stock: the amount of stock (inventory) held at the start of a financial year or a financial period (in management accounts).

Operating expenses: selling, administration and general expenses incurred during an accounting period.

Operating lease: a financial instrument whereby the asset is used by the lessee for a period that is less than its useful economic life. Ownership of the asset remains with the lessor.

Operating profit: Gross profit less operating expenses (or overheads), but before interest and tax. Also called earnings before interest and tax (EBIT).

Order: purchase order given to a supplier or sales order received from a customer relating to goods or services that will be provided at a later point.

Overheads: see ‘Fixed costs’.

Overtrading: a term given to a situation whereby a business expands too quickly and does not have the funding in place to finance the expansion.

Owners’ equity: another term for shareholders’ funds or equity.

Payable: this describes amounts owed to trade creditors or others.

Plant: how equipment and machinery is often described in accounts.

Premium: amount by which the sales prices for a share exceeds the face value.

Prepayment: expense paid in advance for a future accounting period.

Pre-tax profit: profit after all costs and overheads but before tax. Can also be called earnings or net income.

Profit after tax: net profit after taxes are deducted.

Profit and loss account: statement showing sales, costs, expenses and profit for an accounting period. Commonly abbreviated to ‘P&L’ or ‘P&L Account’.

Profit centre: a business or operating part of a business which is able to create its own profits or losses.

Provision: a liability or reserve for an anticipated cost such as a trade debt which is unlikely to be collected.

Prudence concept: this is an accounting concept where revenues and profits cannot be anticipated. They should only be recognised by inclusion in the profit and loss account when they can be attributed to the financial period and quantified.

Quick assets: assets that can be easily turned into cash. Stock and prepaid expenses are usually excluded from quick assets.

Qualified audit: auditor’s statement to indicate that the accounts do not present a true and fair view, or the auditor was not able to carry out the audit to their satisfaction.

Receivable: see ‘Debtor’.

Recognition: this is an accounting concept whereby profit is recognised in the period in which it is realised in cash or accounts receivable. Profit is usually recognised when goods are dispatched and invoiced to the customers. Losses are normally recognised when they are known.

Retained profits: accumulated profits from current and previous financial years (or periods) which are not distributed in dividends. Also known as retained earnings.

Returns: profits and savings from investments made by the owners or, alternatively, the investment of owners and long-term creditors.

Revaluation reserve: this is an entry on the balance sheet corresponding to a time when a company may have revalued one or more of its assets, to reflect the change in the value of the asset re-valued.

Sales: revenues of the business which are usually recognised when goods or services are invoiced to customers.

Sales discount: cash discount on sales usually given to a customer for prompt payment.

Sales expenses: expenses incurred in promoting sales and retaining customers.

Sales return: goods returned by customers.

Salvage value: term used to describe residual value of a fixed asset when it has been scrapped.

Security: collateral provided against a loan or liability.

Share premium: excess of original price of a share over its face or par value. This is part of owners’ equity which is often listed in capital surplus.

Stock: goods held by company for sale (sometimes referred to as inventory). Not to be confused with shares (in US, particularly, shares are called stock).

Tangible asset: see ‘Asset’.

True and fair view: term used in an auditor’s statement to indicate that the accounts give correct and complete information about a company’s financial situation.

Unqualified audit report: an auditor’s statement that the accounts represent a true and fair view.

Variable costs: these costs will rise or fall in proportion to the volume of trade.  In the case of a retail shop, the cost of its stock would be variable, as it will be dependent on the level of trade the shop does and the terms it enters into with its suppliers.

Working capital: finance needed by a business to finance its operating cycle.

This post was originally published here - https://www.thinkbusiness.ie/articles/business-jargon-buster/ on thinkbusiness

Rebel Chilli’s hot ambition

 

‘We need to keep the momentum going’. The Rebel Chilli founder, Paul Moore, talks about starting and growing his business.

Rebel Chilli was founded by myself and my brother, Ken, when I was in college. We started making a sauce in our mother’s kitchen and selling it at our local farmers’ market.

I took sole ownership of the company during my time in college, where I balanced completing my degree with managing the company.

When I finished my degree, I embarked on full-time operations with the business. I was joined by Graham Clarke, co-founder of Kookydough (pictured above left with Paul), in late 2014 as we teamed up to take Rebel Chilli to the next level.

“Since going full-time, the number of our stockists has grown from 20 to 220 around Ireland.”

The Red Sweet Chilli was awarded a gold medal at the Blás na hEireann Irish Food Awards in 2014 for ‘Best sauce in the country’.

Exports to Dubai began in January 2016 and the products are now on the shelf in Waitrose and Spinney’s in Dubai. Exports to the UK started in May 2016 and more will follow very soon.

What I do every day

I do all of the day-to-day operations of the business, which includes marketing, accounting, sales and production.

There is always so much to do and it can be difficult to balance it all, but it’s about doing what is most urgent and laying everything out so that it doesn’t become overwhelming.

Regarding feelings about the business, it’s my baby and I’ve obviously become very attached as I’ve built it from the ground up.

It is incredibly hard work, but seeing something that I have put so much effort into, grow and progress, is extremely rewarding.

The business is doing well at the moment – sales and brand awareness are growing, but we need to keep the momentum and to focus on the next big thing that will allow us to expand even further.

My business ethos

My ethos is that you need to work incredibly hard to achieve what you want. You cannot relax and be happy with what you have done as you will instantly become irrelevant, others will pass you by.

Running a new company is constantly about solving problems. Once you have one issue resolved, you need to focus on what needs to be done next.

I also believe that you have to try and remain positive as there are so many things that will happen in business that will bring you down.

“Take the positives, learn from your mistakes and move on. Horribly clichéd, but absolutely true.”

Responding to setbacks?

No major setbacks yet, thankfully. The worst was having to drive up the country to drop off a pallet of sauce that was heading to Dubai, on an extremely tight deadline, with the delivery address in the absolute back-end of nowhere.

Inspiration

My mother is an inspiration to me. 

Switching off

I find it difficult to switch off as there is always something to be done. I’ve been running a lot lately and it’s good for clearing my head out.

Advice on growing a business

Make sure that you’ve tested the market for your product or service, and that there is a market for it. Talk to other people who are in a similar position, as it can get quite lonely at times. But everyone faces the same problems, regardless of the size or type of the business, so it’s good to chat to others because it helps to know that it’s not just you.

Ambitions

My hopes for the future are to grow Rebel Chilli into a leading food brand in Ireland and beyond. I want to get the products sold all over the UK and the US, as these markets hold the most potential for us. I believe that Rebel Chilli is good enough to be one of the best chilli sauce brands in the world and we need to get established in both of these markets for this to happen. In the short term, I have a few new exciting products to release to expand the range.

“At some point down the line, I’d love to open a Rebel Chilli Café selling the type of food I love.”

 

Images from Rebel Chilli .

 

This post was originally published here - https://www.thinkbusiness.ie/articles/rebel-chilli-food/ on
thinkbusiness

What to look for in a mentor

If you think you can do it alone, you may be fooling yourself. Mentors make sense. 

If you’re in business, the best piece of advice you can get is ‘You can’t do it alone’. If you’re starting off, it’s common practice to work with a mentor (or multiple mentors). 

Never be afraid to ask someone for advice. A potential mentor will often feel quite flattered.

For a mentor/mentee relationship to work, the mentor also needs to get something out of the relationship. Don’t be too demanding as a mentee. Have something to give back, even if it’s just your enthusiasm or sense of humour.

mentors in ireland

Spread your net far and wide

Don’t limit yourself. Spread your net far. Perhaps have several mentors for the different areas of your business.

Picking a mentor should be approached in the same way you would look for a potential investor. Speak to lots of people and refine your pitch – what are you looking for? What areas of your business need attention?

Be very clear in your head what you want. Is it strategic advice, industry insights, customer contacts, brutal feedback, technical expertise? 

There are many things mentors can bring to your table. Below are a few essential qualities you should seek. 

Six essentials you should look for in a mentor

Support – a good listener with empathy is what most business people need. Business life is tough. Sometimes you need to off-load your insecurities. 

mentors in ireland

Inspiration – they need to be doing, or have done, things in business that you want to do.

Advice – they can point to the potential pitfalls and the potential opportunities in your sector.

Information – they know your sector/industry inside out and have the information you ask for at their fingertips.

Challenge – they are not afraid to ask you the difficult questions and not afraid to be brutally honest when you make mistakes.

A network – a mentor’s network should be reasonably vast and supportive, it’s the one thing you could tap into to help grow your customer base. 

READ: Did you know there are over 80 State supports (including grant money) for SMEs?

 

This post was originally published here - https://www.thinkbusiness.ie/articles/what-to-look-for-in-a-mentor/ on
thinkbusiness