Starting a business in Ireland and how to manage risk.

As we are being contacted by more Solicitors outside Ireland to form companies on behalf of their clients, we are delighted to see that the main attraction is the Corporation tax rate of 12.5% . We know this because we ask every new client how they found us, and why they are forming a company in Ireland.
A recent client from Spain asked us to assist in not only forming a Limited Company, but to also get them set up with a remote office. The general feedback from this contact was that we made the process very easy for them to set up a company, and going it alone to navigate the process would have cost a lot of time. The main questions we get from volume customers is “Why should I use Irish Formations?”   I love this direct question, but there is one thing we always say as well as the usual Price, Service, Simplicity proposition, “Fill out the form online, and we will do the rest”

Everyone knows the old definition of an Entrepreneur and risk taking. Starting a business in Ireland should not be about taking risks, it should be about managing the risk that is involved. Creating a business plan is one way to manage the risk involved in which the Financial and the Operational risk can be studied. We were at a presentation recently in which Eddie Hobbs a Director and Finance Spokesperson for the Consumers’ Association of Ireland emphasized huge importance in having a business plan. Areas which can be scrutinised within your potential business to De-risk it are:

Financial Risk: As part of your business plan, the numbers within this plan will help paint a picture for the future. It will also open your eyes to how you should create strategies for each section of the plan. Many argue it is the first document you should create, and you should ask your bank to keep it on file once you are up and running, even if you are not asking for credit. These numbers need to work before you commit to starting your business. Get the assistance from an Accountant to create this plan if you are not strong in this area.

Operational Risk: This area involves the steps it takes from initial contact from a customer to the delivery of goods or services. Its always a good idea to create a visual plan of how this will work in your business, including how different circumstances or buying decisions affect the buyer. If you have a heavy operational burden, it is a good exercise to create ways to cut out the steps between initial contact by the customer to delivery of the product, without affecting quality of the product or service. Making these steps more efficient will also control the financial/operational burden upon the business.

Market Risk: Is the market big enough to support your business? How is the Competition structured, is there a price war in the market?, are you on a local, national, or international playing field? Remember, you cannot eliminate all the risk in a market, you can only manage the risk. For example, if you are opening an off licence in Ireland right now, you might want to see if the change in the base price in alcohol changes with new legislation. Write down everything you know about your marketplace and start documenting a list of questions about the market. The more you know the better you will be prepared once you go to market.

If you have any further questions on any part of this blog please contact us.