Andrew Lambe, Commercial Director of Company Bureau, a Dublin-based business that specialises in company formation and compliance, discusses key ways in which companies can prepare for the reopening of the economy.
Ensuring your business model is viable on returning to the new normal is key. Lambe says: ‘For existing businesses, it’s all about survival and I would strongly recommend researching all available resources and grants such as the Local Enterprise Office innovation vouchers. Businesses must also have contingency plans in place, especially cash flow forecasts under a worst-case scenario.’
He advises companies to review their group structure, saying: ‘Good group structure can also be very practical for tax purposes, once all Revenue conditions are met. This can allow the transfer of trading losses, certain excess capital allowances, charges on income, transfer of assets with no Capital Gains Tax (CGT) arising between group companies, with also participation exemption allowing the sale of shares in subsidiaries exempt from CGT. If businesses have deferred revenue payments and creditor payments then they need to have a plan in place for the time that the repayments are required.’
I believe that companies which develop software to streamline processes and supply chains will prosper in the future.
Lambe urges companies to develop an e-commerce platform where possible and to make sure company websites are optimised for Search Engine Optimisation. He says, ‘Some companies have diversified very well, and are meeting the demand for new products and services. As an example, Vinehall Displays has launched a brand new range of products including C-19 floor graphics, sneeze guards and even a flat-pack weights bench. For other companies, it’s crucial to use SEO to drive traffic to your website.’
Lambe expects to see an uplift in start-ups towards the end of 2020 and advises the new generation of start-ups to begin by recruiting a good external accountant. He says: ‘We saw this increase of start-ups coming out of the last recession. Whilst start-up numbers have dropped by 50% since mid-March, we have seen a couple of interesting start-ups during this quieter period. I would recommend that all new start-up recruit an external accountant who will give you timely advice, register you for taxes and assist with a business plan.’
He emphasises the importance of tax planning for all companies and points to Revenue schemes such as SURE and EIIS. He says: ‘The importance of obtaining the right professional advice cannot be underestimated. A limited company is slightly more expensive to set up and operate, however, it does allow for secession, gives limited liability, credibility and offers more tax benefits in the long-run.’
My advice for the new generation of start-ups is to begin by recruiting a good external accountant. They will give you timely advice, register you for taxes and assist with a business plan.
Lambe predicts that companies which develop software to streamline processes and supply chains will prosper in the future, naming Phorest as an example. He also believes that people will continue to spend on affordable luxuries online and that Zoom, online yoga and pilates are here to stay.
In summary, Lambe points to technology and a company’s supply chain as key areas to look at and improve now in anticipation of the reopening. ‘Invest in technology, your supply chain and website. Speak to your potential customers and network, do surveys and focus groups when you can. Don’t assume you know what they want and, remember, not every good idea is a viable business idea.’
To find out more about the Rebooting Ireland Series and The Business Show, please see here.