An overdraft is a very useful thing to have. Here’s how to manage one.

Used correctly, an overdraft is a very useful tool for businesses of all sizes. Here’s how to manage one.

An overdraft is a credit arrangement with a bank allowing a customer to write cheques or make payments from the current account up to an agreed limit. It is a form of working capital finance.

An overdraft facility fee is often charged, along with interest on the amount of the (debit) balance on the current account, at an agreed rate.

Key steps

1. Managing your overdraft properly puts you in control. This means that you need up-to-date information. Ensure that you have registered your current account online with your bank. This way, you will be able to easily track the money going into, and out, of your account.
2. Understand the charges and fees which may be applied to your overdraft. There are typical fees, such as:
   Facility fee – This is a once-off fee for setting up your overdraft.
   Renewal fee – This is only charged if you renew your overdraft at the end of the agreed term. 
   Referral fee – This is a fee the bank charges for each transaction made on your current account, when you are over your agreed overdraft limit.
   Surcharge interest – This is extra interest that the bank will charge on top of the standard interest for the overdraft, if you exceed your agreed overdraft limit.
3. Avoid paying by cheque as much as possible. Where possible, use online payments facilities instead. In most cases, it’s a lot cheaper to use online facilities,
4. Ask your customers to pay you electronically instead of paying you by cheque. This will save you money and ensures you gain quicker access to your funds and potentially avoid the need for an overdraft (or at the least reduce the level of overdraft facility required).
5. Never use an overdraft as a long-term borrowing facility. The interest rate for an overdraft is generally higher than for term lending, for example, so you should consider, carefully, the alternative ways of funding your business. Alternatives to an overdraft could include:

• Injecting more cash into the business
• Improved management of your debtor book
• Seeking increased terms from suppliers
• Other bank finance, including invoice discounting, asset finance and a term loan

TOP TIPS

Plan ahead: Keep your cashflow projections up-to-date and understand how your business’s financial needs may change in the period ahead. Stress-test your cashflow. For example, if your debtors take an extra 30 days to pay or if your creditors want payment up front, how will this affect your cashflow

Be cautious: Be realistic about how quickly you expect your customers to pay you. It’s better to expect slow payment and receive the cash more quickly. If you think that you will probably need access to more funding than your current overdraft limit, talk to your bank immediately.

Be proactive: If you do not have an overdraft, or if your existing overdraft limit is too low, contact your bank to discuss a suitable limit, on a temporary or permanent basis, based on the working capital needs of your business. Early contact will help you to avoid any potential embarrassment later, not to mention any additional charges, should an overdraft limit be breached.

YOU MAY ALSO FIND THIS INTERESTING: What you need when applying for a bank loan.

Lighthouse Cinema

Located in the Market Square in Smithfield, the Lighthouse cinema is regarded as one of the coolest places to catch a movie in Dublin. The Lighthouse distinguishes itself from its competitors by offering punters a mixture of Hollywood blockbusters, old classics and art-house films. A stone’s throw from the achingly cool Stoneybatter, the cinema is surrounded by a wealth of hip pubs and restaurants.

Eye Cinema

Galway’s locally-owned Eye bills itself as “the cinema that Galway deserves but has never had”. It sets itself apart from the big cinema chains by giving customers a choice of both mainstream film as well as more arthouse offerings. Visitors get the full multiplex experience with multiple screens, cafés, bars and an ice cream parlour. However, its Eye’s commitment to culture (as well as independent cinema it also host live events with musicians, poets, and comedians) that makes Eye the best in the West.

Phoenix Cinema Dingle

This family-run cinema is just another reason to love Dingle; an adult ticket to its nightly evening showing is only €8 while a matinee ticket will set you back €5.50. The 150 seat cinema also has its ‘Art Film’ night on Tuesdays, with tea and biscuits thrown in for good measure. A good option following a day exploring the Wild Atlantic Way or one of the town’s other attractions.

Century Cinemas

Another family run business, Century has been bringing cinema to Letterkenny for over 75 years. It has all the trappings of a multiplex with eight screens, stadium seating, and 3D movies. However, it also broadcasts live theatre and dance productions. In 2013 it opened its very own ice skating rink, Century Ice, so there’s no shortage of things to do in this enterprising venue.

IFI

Home of the Irish Film Institute, Temple Bar’s IFI is the go-to cinema for Dublin film buffs who want to get their fix of the latest in cutting-edge movie making. Its Georgian building gives visitors a cosy cinema-going experience, while its bar and café give people a place to hang out before sampling what’s on offer on the big screen.

Movie Junction

Cork’s Movie Junction is Ireland’s only dedicated drive in cinema, open seven nights a week. Visitors pick up snacks at the drive-thru kiosk, pull up in the parking bay, tune into the Movie Junction FM frequency on the car radio, then sit back and enjoy the latest blockbuster. Pizzas and chips can be ordered and delivered to your car door, and canopies keep your windscreen clear when it rains. A little slice of American culture in County Cork.

What’s your favourite cinema? Let us know on our Facebook page.

READ: The film sector is big business. If you want to open a cinema find the right finance.

Data leaks are damaging. It’s never too late to put ten basic security practices in place.

52% of firms* in Ireland have no comprehensive strategy when it comes to preventing digital crime or data leaks.

Sensitive data leaks are the stuff of nightmares for business owners (and public representatives). What can you do when the horrible happens? 

When it comes to sharing information, social media strategist Darragh Doyle says business owners should have very clear social media policies in place.

“Along with the policies and a nondisclosure agreement, employers should make it very clear that company information is never published in social groups,” says Doyle. 

Nightmare scenario

And what do you do if customer data or other sensitive data makes its way into the ‘wrong’ hands? 

“You have to own the problem,” says Doyle. “You have to find out how the issue occurred, where did it leak from, and then seek to address the fallout.”

Can someone press the big red button? 

“You also need to know the administrators of your social media groups and trust them. The question is, ‘Can someone hit the big red button?’” asks Doyle. 

Data dumps

It’s also important to keep company devices free from sensitive data. “Employees should be asked to do a data wipe, every day if necessary,” advises Doyle. 

“For example, they may have downloaded a database for a meeting to view it on screen. They should erase sensitive documents. It’s like having a clean desk policy but for smart devices and laptops.” 

The top ten things to do

*Grant Thornton suggested in a 2016 report that only 16% of Irish firms believe that cyber-crime is a credible threat.

The cost of cyber-crime to the Irish economy is estimated at €630m annually.

Here is a list of 10 useful tips that will help protect your business from cybercrime.

• Secure your computers: Firstly, install anti-spyware and anti-virus software and always make sure that your firewall is activated. Additionally, Windows has a standard firewall on all of its computers. Access it from your control panel and confirm it’s switched on. This will help reduce your susceptibility to malware.

• Secure your wireless network: Verify that your wireless network is not available to the public. Verify that your internet access is password protected and restrict usage to employees and guest visitors.
• Encrypt your data: Encrypt, encrypt, encrypt. This cannot be emphasised enough. Encryption allows you to encode your information so that only authorised personnel can access it. Use encryption for any sensitive files or data that you own.
• Avoid clicking unsafe links: The old saying “if it sounds too good to be true, then it probably is” rings true here. Exercise caution when it comes to advertisements online, install ad-blocking software or, better yet, simply ignore them.
• Use strong passwords: Perhaps the most obvious safety precaution, you should implement a strong alphanumeric password policy that consists of numbers, lowercase letters, uppercase letters and special characters with the password requiring a minimum of 12 characters.
• Review statements regularly: A relatively simple action, review your monthly financial statements and check for any irregularities. If you spot anything suspicious, contact your bank immediately.
• Keep systems updated: To combat any new threats that may emerge, keep your anti-virus software and Windows systems up-to-date. Advise staff to update their systems on a regular basis. If this approach is not suitable, automate how your updates are installed and roll it out across the whole business.
• Social media housekeeping: Make sure there is adequate security surrounding who has access to the company’s social media accounts. Ensure that only authorised personnel have access to social media accounts and the log-in details.
• Use multiple email accounts: Use a separate e-mail for financial dealings, another for social networks and one for general queries and so on. In the scenario that a hacker manages to gain access to one of these, all of the sensitive information isn’t compromised. In the same vein, use different passwords for each address.
• Don’t store your credit card information online: Yes we know it’s a nuisance but having to input your card information for every transaction can save you a lot of hassle in the long term. If a hacker does manage to bypass your security they may also have access to your card details. Don’t take the risk. Alternatively, only use a prepaid card online.

If you find yourself the victim of a cyber-attack please contact The Garda Bureau of Fraud Investigation on +353 1 666 3776 as well as the Data Protection Office and your Internet Service Provider.

Performance management is a system of involving your employees to help you achieve your business’s goals.

It’s as important for an SME to have performance management systems in place, as it is for a larger business. Why? Because the more you involve your employees in delivering your business targets, the more you will meet customer expectations, improve productivity and deliver the bottom line numbers.

This 10-point checklist will help you create a performance management system for your business. 

1: Start at the top

The CEO (owner) needs to champion a performance management system, and all senior managers should be involved in the process.

2: Communicate the benefits

The CEO needs to get the message out about why performance management is being introduced and why it’s of benefit to both the business and the employees.

3: Get employee feedback

Don’t just launch a new system without involving employees in the process. Tell employees how it will work for them. Seek constructive feedback and act on it.

4: Identify clear business objectives

Ensure that the business’s objectives are well-defined. Use financial and non-financial measures, such as customer retention, new business wins or speed of customer response. Next, translate them into individual goals.

5: Set tangible individual goals

Employees should be able to understand what they need to deliver, how their performance will be measured and the skills, behaviours and knowledge that are expected of them. Employees should be provided with written business objectives, a clear job description and the criteria that their performance will be measured.

6: Ensure goals meet the SMART test

The business needs to ensure that goals are specific, measureable, attainable, realistic and timely (or SMART).  Here’s an example. A manufacturing plant sets a goal of reducing overtime hours of ten hours per week to five hours per week no later than the end of the financial year.

7: Formalise employee feedback

Managers should continuously review an employee’s progress against targets. Review meetings should be formal and should be held quarterly, if there are quarterly targets. Employees should be asked to contribute and asked about how they perceive their strengths and weaknesses.

8: Give constructive feedback

Feedback should be about encouraging employee self-awareness. Managers should provide timely feedback and use specific examples to support the points. Focus on the behaviour, not the individual.

9: Understand underperformance

There are many reasons why employees miss targets. Sometimes it’s due to a lack of skills, miscommunication or inadequate supports. Employees may have personal problems or lack motivation. Managers should encourage employees to share reasons why targets are missed. Together, they should agree what support or changes are needed.

10: Seek professional help

Performance management is a specialist skill. If you feel you have insufficient expertise in-house, get help. The investment of retaining an experienced adviser to help design the system will likely pay off in the long run.

INTERESTING: You can’t do it all alone. This is why mentors make sense.

Myles Murray, PMD Solutions, on starting and growing a business in Ireland.

What’s your business pitch? 

Today it is well known that the difference between 25 and 29 breaths per minute can be the difference between life or death within as short a time as 24 hours. PMD Solutions has developed the world’s first continuous and accurate respiratory rate monitoring, to improve patient outcomes by making every breath count. We enable medical teams to deploy timely interventions for patients around the world.  

How long have you been in business?

I was first introduced to the clinical need in 2010. PMD was incorporated in 2011 and now employs 17 amazing people. 

What’s your ambition?

To make a meaningful impact in the world. I know this sounds very grand. However, I look at what we’ve accomplished in PMD, and what we have yet to accomplish, it makes me realise that everyone can make an impact. 

What’s the most important thing you have learned so far in business?

There’s the plan, and then there’s reality. What tells successful companies apart is their ability to pivot, adapt, and adjust to the changing landscape. It is so important to lift up your head to look and listen to be aware of what is being said. That whole idea of work on as appose to in your business.

What was your biggest ‘mistake’ been, in business so far?

Cash is king and it’s not real until it is in the bank. 

Who inspires you in the business world?

Nothing gives me a bigger kick than watching the EY Entrepreneur of the Year awards. 

What would you do to change the business climate in this country?

I believe Ireland has a fantastic infrastructure for supporting all types of business. In particular, for the MedTech sector, the Irish MedTech Association, IDA, and Enterprise Ireland. Great people are doing amazing work already. Ireland is a great place to start a business.  

Did you receive any supports to start your business and what do you need most at this stage of your business? 

PMD has been fortunate with support from LEO South Cork and Enterprise Ireland. We also have visionary investors and partners. Right now PMD is focused on growing its market share. Enterprise Ireland’s foreign offices are an enormous asset in helping to make this happen.