Blog

1. Good Reasons to Start a Business in Recessionary Times

• Lower Costs
• Labour is cheaper
• Rents Cheaper
• Using the latest technologies in your business – cost advantage
• People are shopping around looking for better value – this creates opportunities for the starters.
• Cost base will be lower – therefore better able to compete with more established business.
• SME are corner stone of employment in local economy
• SME are flexible and adaptable.
• Think like a large business from the start

2. Financials - Know your numbers

• Enough Cash to get started and keep your business financed until it starts making profits – usually after year 1
• Big failure of start up business – insufficient cash
• Work out the set up costs + running costs
• Project your sales figures
• Tendency to under estimate the costs and over estimate the sales income = ,Leads to early problems
• Sources of finance
Own Savings – be prepared to put your money on the line
Bank Finance = Straight Loans, Leasing (Motors certain Plant) bank Overdraft
Relative Costs of Finances
• Essential to have a well tested business plan.

Here is the main points from the proposed Finance Bill:

• Property Based Tax Reliefs - The proposed new restrictions on property based Capital Allowances and Section 23 Relief have been deferred until an economic impact study has been completed.

• Benefit-in-kind - Legislation has been brought in to tax, as a benefit-in-kind, subscriptions to professional bodies paid by employers on behalf of employees.

• Income Tax returns - From 2011 onwards self assessment Income Tax returns must be filed one month earlier than heretofore, 30^th September.  

• Pensions – Under the new provisions the maximum lifetime retirement tax-free lump sum is €200,000 in respect of payment received on or after 1 January 2011. The annual earning limit for self employed pension contributions has been reduced to €150,000 from 2011.

• Third level fees - Tax relief currently available on third level fees will be restricted and the first €2,000 will not be allowable. For fees relating to part-time courses, the first €1,000 will not be allowable.

• Universal Social Charge – The new legislation imposes a charge of 2 % on income up to and including €10,036, a charge of 4 % for income in excess of €10,036 but not greater than €16,016 and a charge of 7 % thereafter.

Corporation tax exemption for start up companies

• This provides for an extension of the 3 year tax relief for start-up companies who commenced to trade in 2011, modifying the existing relief so that the value of the relief will be linked to the amount of Employers’ PRSI paid by a company in an accounting period, taking account of the Employer Job (PRSI) Incentive Scheme, subject to a maximum of €5,000 per employee and an overall limit of €40,000.
• If the amount of qualifying Employers’ PRSI paid by a company in an accounting period is lower than the reduction in corporation tax otherwise applicable, relief will be based on this lower amount.

RCT

A three-rate withholding system has been introduced as outlined in the Budget.

Tune in to Northern Sound today for Coverage of Budget 2011  at 3.30pm with Des Lowry. Click here to listen live.

The Work Placement Programme facilitates your business to take on a person for a work experience placement for a maximum of nine months. While the person is gaining valuable work experience they are also contributing to your business. You have the opportunity to see how they work and if you are in a position to recruit you will have had ample opportunity to determine if they are suitable.

Payment of Participants is not a requirement of the programme.

It is important to research the markets you wish to export to. This may be the success or failure of your exporting expansion.

The following factors need to be researched to access the viability of your export project:

• Background of the market including political and economic stability, foreign exchange problems,
• Consumer market being targeted – culture, attitudes to foreign products, language, consumer spending power, need for product or service.
• Distribution channels – does the target market have the necessary networks in place to deliver your products/services.
• Competition – who your competitors are and their background information such as current product offering, prices, number of years established.
• Target Markets Legislation/ Customs & Excises – Does your target market impose additional tariffs on foreign goods or import restrictions, level of duties, packaging & labeling requirements.

Market research is the only method of answering all your questions before the decision is taken to export, so if you require any assistance in assessing potential export markets, please contact Amatino Partners www.amatino.ie or Patrick Cunningham on 047 84955.

Any submission in advance of the release will be treated as an Intent to Apply only, rather than an official application.

The timing of project window will be quite tight, this advance notice is intended to initially inform you of the scheme but also to maximise project time window should you intend to proceed with a grant application.

Please see link below for Guideline document and scheme description.

Energy Efficiency Retrofit Fund link:  http://www.seai.ie/Grants/Retrofit/

Here are the key points

•             Open to Public and Private sectors

•             Support is available for buildings, services and facilities upgrades

•             Projects to focus mainly on thermal and electrical energy use in buildings (but facilities, processes and transport are eligible)

•             Grant 35% funding available to private sector, with a grant range greater than €20K and less than €500K, e.g. €100K granted projects are encouraged

•             Usual qualifying costs, external labour, materials, hardware etc, however no internal staff costs included, or costs incurred prior to grant approval

•             The project must be completed and final documentation submitted by 1/12/10

•             An assessment by SEAI to qualify should take 4 weeks

•             Projects must include a effective system of savings verification

•             Generally SEAI are looking for exemplar,  innovative and projects that can be replicated

•             Speak with the programme contacts before submitting an application

•             Applications cannot be taken just yet, but the strong advice is to get them prepared

Applications should be made, in electronic format, using the EERF Application Form. They should be sent to: eerf@seai.ie, and a hard copy (with all relevant signatures) should be posted to: The Grants Administrator, SEAI, Wilton Park House, Wilton Place, Dublin 2.

From 1 May 2009, the qualifying period required for BTWEA is reduced from 2 years to 12 months provided you have an underlying entitlement to Jobseekers Allowance. 

A new Back to Work Allowance Scheme called the Short-term Enterprise Allowance starts from 1 May 2009 - see more about the Short-term Enterprise Allowance in 'Rules' below. 

Rules

Back to Work Enterprise Allowance

You can avail of the Back to Work Enterprise Allowance if you are:

• Setting up as self-employed in a business that has been approved in advance in writing by a Job Facilitator or Partnership Company

And

• Getting a Jobseeker's Allowance for 12 months

Or

• Unemployed for 2 years and getting Jobseeker's Benefit. However, if you have an underlying entitlement to Jobseeker's Allowance and are unemployed for one year you can qualify for the allowance. If you don't have an underlying entitlement to Jobseeker's Allowance, you must have a combination of qualifying social welfare payments for 2 years. Signing on for unemployment credits following your Jobseeker's Benefit will not count towards the qualifying period.

Or

• Getting One-Parent Family Payment, Disability Allowance, Blind Pension, Farm Assist, Incapacity Supplement, Pre-Retirement Allowance, Invalidity Pension, Carer's Allowance, Widow's/Widower's (Non Contributory) Pension, Deserted Wife's Benefit/Allowance or Prisoner's Wife's Allowance for at least 12 months

Or

• Getting Illness Benefit for 3 or more years

Or

• Getting Farm Assist for 12 months, providing that the self-employment is now in relation to the holding and not the continuation of an existing operation.

You may also be considered for the BTWEA if you are:

• A qualified adult of a person eligible to claim the BTWEA.

Five grants worth up to €175,000 are up for grabs during the latest round of their Innova programme, the only all-island R&D scheme aimed at helping companies develop new products, processes or services.

Funding is available for partnership projects involving businesses from Northern Ireland and the Republic, particularly smaller companies and first-time innovators.

As well as receiving a much-needed financial fillip, successful applicants also benefit from “pooling their expertise and resources” with another company, ensuring their innovative ideas are brought to market faster than if they were working alone.

Funding is available for both:

• Industrial Research- aimed at acquiring new knowledge and skills that may be useful in developing new – or significantly improving existing - products, processes or services.
• Experimental Development- taking the results of industrial research and shaping these into a plan for new or improved products, processes or services, including the creation of a prototype which could not be used commercially.

Urging partnerships to get their applications in as soon as possible, Margaret Hearty, director of programmes and business services at Inter TradeIreland, said:

“Developing and exploiting new ideas is critical to business success, particularly in the current climate. Companies need to innovate to survive and grow, but many lack the resources to make it happen.

“Our Innova programme offers an attractive support package for those companies serious about R&D and the unique opportunity to tap into the wealth of expertise that exists across the island.”

Inter TradeIreland has already invested €5 million through the lifespan of the programme.

Expressions of interest in the current funding round must be submitted by 4 June.