Show me the Money - Credit Review

There has been talk on the ground for some time about how the banks HAVE TO lend to the SME sector to try and survive the recession and all the gloom it brings.

Banks involved in NAMA are going to have to play ball with SME's, and Enterprise Ireland have set up a website full of information about making the system work for you.

The "Credit Review Office" as it is called was launched this month, without too much fanfare I'm sorry to say.

Essentially it's there as a support service for those who have been refused credit by banks involved in NAMA.

Some text from their site:
"The Credit Review Office has been established to conduct this review process and will accept applications from SMEs, sole traders and small and medium-sized farm enterprises that have had their application for credit refused or reduced or have had credit facilities withdrawn, and feel that the bank’s decision is unjustified. The Credit Review Office will, on application from the borrower, carry out an independent and impartial review of the bank’s decision."

Best of luck to anyone who needs this service and anyone who gives it a go. Let us know how it works out.

Ireland Inc

There was something else bothering me that I wanted to flag here. The attitude of a small number of people who are not pulling together to try and help companies become more efficient so they can compete in global markets.

Think of this - it has happened twice in the last month - 2 different people asking me if I know anyone in two different foreign markets who might be able to help them find a supplier or two of raw materials. Totally different businesses, totally different requirements - similar request - "can you put me in touch with someone" - which is, let's face it, what business is all about.

I personally don't have a problem with helping international business flourish. The stuff they need can't be sourced here; they're having to buy it in from the UK and elsewhere. I'm an advocate of the ThinkIrish campaign, so if they can't get it here then it's ok by me that we look elsewhere.

Makes sense, right? We all do it, it works, no harm no foul.

Apparently not. When I called Enterprise Ireland (have contacts there from previous employment & some recent research I was doing) I was met with very helpful people who all seemed to point me in the right directions. Then I called the International offices for some detail on how to go about this sort of thing. BRICK WALL. They don't feel "comfortable" assisting these guys in any way. Their role is to assist Irish companies in exporting, not the other way around.

Yes, I realise that, thank you, I'm not entirely stupid. All I'm looking for is a name - like the Exporters Association for the 2 different regions I'm researching. Do you happen to know anyone there? I thought we were all about pulling together for the sake of our poor little broke nation? It always helps to have a specific name in these situations, I can use Google myself.

And that's what they suggested I do. Use Google. Tell the people who were asking me for help, to use Google.

Can you believe that?

So I wrote a stinky email to a few people back in EI that I know, telling them about my experiences and lo & behold - a message came back so fast with names and direct lines that that I had to laugh.

They helped me, I passed on that good information, and away we go, Ireland Inc working hard once again to try and survive this quagmire of economic disaster.

EU Funding

It appears that news stories featuring small businesses & the help available from Europe are like the 46A...none for ages and then 2 come along at once.



Not long after I had the pleasure of posting this about the European Commission, I find something else to be cheerful about.



I have just started following Eoin Ryan on Twitter (I posted about that last week too) and found this interesting tit bit - the European Investment Fund's new programme, called Jeremie.



Think not that I am nailing political support to any flagpoles - this I will never do. I'm too flaky. I am, however, delighted that anyone at all is starting the odd initiative that actually might bring some good to the small and micro enterprise sector. Hoo-bleedin-rah I say. It's not like we don't need it!



So - Jeremie - stands for the Joint European Resources for Micro to Medium Enterprises. No wonder they abbreviated it. I won't ramble about which EU Fund it's coming from (Structural) but the basic gist is that rather than getting a once-off grant, money will be invested, and then can be reinvested in the same business at a later date. The money is not then linked to a specific project, just the financial health of an enterprise.



This makes a lot of sense, since at the moment you have to be incurring a specific cost in your near future when you apply to EI or a CEB. They always ask "well, what do you need the money for?" when truthfully you just need to be keeping your cashflow healthy and could do with a boost.



Now just to clarify - none of the details have been churned out yet. I'm trying very hard to gag the cynic in me that thinks this in reality this will take so long to put in place that the recession will be over by then, or that the hoops and loops people will have to jump through to get the finance in the first place will still be a pain in the -



But! I am tentatively thrilled that something is happening on the funding front. Hopefully it will come to something - at the moment they are only talking about "a range of financial instruments" so when I hear more I will elaborate!



Oh goodie for more good news... On a Monday too! The shock.



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Footnote of Great Import:

JEREMIE funds are not issued directly to small businesses (SMEs).SMEs should therefore not apply to EIF or the EC for financial support.In due course, SMEs interested in obtaining finance will be able to identify and contact financial intermediaries in their countries based on information provided in this website, which will be provided as and when the JEREMIE initiative becomes active in Member States and Regions.

So you need Funding...

That old nugget.

What do you do if you need funds, where can you begin.

Well there are a variety of options available and it does of course depend on what type of business you are in. Risky high-cost start ups are catered for by business angels, banks and of course venture capital firms. Yes they are called vulture capitalists for a reason, but the way they see it - they're taking a huge risk investing in a new type of business so they need some sort of security blanket, and will take up a chew of your business ownership for their trouble.

For the more day-to-day businesses the first stop should always be your own bank or credit union. You have been giving them your business for years, so see what they can do for you. It's all about shopping around and remembering the most important thing - you are in charge. This is your business, they owe you nothing - if they give you a business loan, they are making money on it so although you can thank them for their assistance, there is no need to name your first born after them. Banks are in it for the money - never forget that.

They also hate risk. They are not insurance companies, they are completely risk averse, so the more you can reassure them that there is little risk to giving you a start up loan, the better a position you will be in, in the long run.

Contacts are key to business, we all know that. So apply that to your funding situation. That is why I mentioned going back to your own bank. I have a bank manager I can ring and chat to about my personal finances (or lack thereof!), at my local branch. That is what they are there for. If you are thinking about starting a business down the line and considering your funding options, start chatting with your bank manager now. They are as hungry for business as the rest of the world.

If the bank says no, there could be a million reasons why. So don't lose faith. Like in a sporting situation - have a look at the post-match analysis and figure out why. Ask them straight out, they might just tell you! It might be that your credit history is poor with them. Or that you have no collateral. Or that they believe the market you are trying to break into is flooded already (they may have an inside track on this, their current customers selling the same things as you, at the same location, may be in financial difficulty - a great way to find out the most important info on your new market, could be in your loan-refusal-feedback-chat!).

If that bank does say no, approach the credit union. Find your local one, here. The staff in the branches I have visited are very supportive of indigenous industry! Local business is good for business. Cheesey but true!

Business Angels are people who invest in your business without grabbing all the shares. Almost exactly what it says on the tin really. If you can find one, good on you! There are some around... There was a Business Angel network running for a while but the last I heard it was running out of juice. More recently I have heard of people finding their own angels. Back to those all important contacts! It could be family friends, friends of friends you meet at parties or conferences (or party conferences, shudder!) - it could be anyone at all. Someone whose eyes start to twinkle when you talk about your new business idea. If they have any sort of passion for your business, they might just lend you those all important funds!

First Step is a great organisation, although their coffers are always stretched. They will help you get a small loan, when all the others have shown you the door. First Step are what you call, the lenders of last resort.

I heard the County Enterprise Boards and Enterprise Ireland on Today FM a couple of weeks ago talking about starting a business, but they were more talking about doing Start Your Own Business courses (incidentally, they run all over the country, right through the year so you can find one near you if you really want to impress the bank manager). What they did mention - briefly - was their funding situation. If you are manufacturing something different, or if you are trading internationally, then they can talk to you about money. If you're not - they can't. It seemed pretty clear - if you want to get into retail for example, they won't be able to help fund you.

The one thing everybody will need, is a business plan I'm afraid! That's where maybe the CEB's could help. Some of them run business planning workshops - not all, so you'll have to check with yours. I've blogged about it before, here, so check back for a basic starting point. Email me if you need more detail... I wasn't planning on running any business planning workshops myself but for the price of a pint... ;) Who am I kidding. A hot port please, if this weather keeps up...

After the S.W.O.T...

Start Figuring Out Your Business Plan!

The best thing to do before you sit down and start writing of course, is to have a look at a few ideas online. The most important page to consider at this stage is the Contents Page.

To be honest, the most practical templates are the least complicated ones. As you go through your own plan, you will find that you need to add in relevant chapters and subchapter headings; then all you need do is check back with those listed below. Many of the online tools (found on websites like AIB) are helpful in the short term but the number of subheadings can look confusing (just a bit too academic!) for some entrepreneurs...

Some really helpful sources for a good, decent business plan template:
County & City Enterprise Boards - in Ireland, each county has its own local Enterprise Board - a support and development agency, run by small dedicated teams of business advisors. You can find your local agency online and just click the Downloads tab for a copy of their recommended business plan template.

I would recommend getting in contact with your local Enterprise Board anyway, for real, practical, genuine advice on how to start up a new business idea.

Enterprise Ireland - businesses who consider themselves having the potential to do huge international trade - millions of turnover in just a few short years (wouldn't that be nice for all of us!!) - can contact Enterprise Ireland. Their business plan template is reasonably straight forward, and the rest of their inforamation can be found on their extensive website.

High Potential Start Up businesses (H.P.S.U. for short) are the core target for Enterprise Ireland, a much larger organisation than a 4 or 5 person team at your local Enterprise Board. This can have advantages and disadvantages of course. It takes a long time to develop a good relationship with your "Development Advisor" which is assigned to you if you are HPSU material. When you do, they can open a lot of doors for you.

If you are hoping to start a local, service based business, then the team at Enterprise Ireland will probably direct you toward your local County Enterprise Board.

Of course, no Irish based Business Start Up advice column would be complete without mentioning Brian O'Kane - source of much knowledge on the subject and author of - amongst other things - Starting Your Own Business: A Workbook, published by Oak Tree Press. Brian has uploaded another template for writing a business plan, which isn't bad at all!

There are others out there, all you have to do is pop a search into Google. Dublin Institute of Technology have one, for example.

If I can share any advice with you it's this: writing a business plan is not rocket science! Anyone can do it, believe me. The super-dooper free software out there which you have to download for it to write it for you.....etc......it all gets a bit much.

The truth is, all you have to do is:

• Open a Word document.
• Write 9 or 10 bullet points on your own Contents page.
• Page Break.
• On the first page, write Introduction.
• Page Break (I mean it! Write no content the first time you sit down at your computer).
• Next heading: Executive Summary (leave this until last to write, since it's the "best bits" from the rest of the plan!).
• Page Break.
• Company Description...
• Page break....

You get the idea! Like I said, pick the best bits from all the templates you peruse, the most suitable ones for your business, then just open up the Word Doc! It really is that easy to start. Then save, close, go make lunch/supper, whatever tickles your fancy. The worst thing you could do is get bogged down and go stale on good ideas too quickly! Just come back to it when you're ready.

Good luck!