28TH AUGUST, 2019

10 Biggest Issues Facing Small Irish Businesses Today

It’s no secret that running a small or medium-sized business is hard, wherever you choose to do it. But for Irish SMEs in particular, there are all sorts of common challenges and hurdles, regardless of which industry you operate in. Yes, the Irish economy is relatively strong, but that doesn’t automatically mean everything’s rosy.

The increased cost of living, high rents and slow wage growth have all taken their toll on the finances of many Irish households over the last few years, as well as businesses. It has meant that potential customers or clients may not have the same levels of disposable income that they used to have, and this can affect businesses dramatically.

Unfortunately, at the same time the financial backing needed to start-up a company has skyrocketed. Overhead costs, rent, insurances and regulatory compliance are now all very major considerations. This combined with the explosion in popularity of online shopping means that smaller, local businesses with narrower margins can really struggle to stay afloat. Indeed, it can easily feel like tax breaks, benefits and resources all too easily flow towards international corporate goliaths and away from local small Irish businesses that need it.

Here we take a look at the challenges faced by Irish SMEs in a modern day, global business world.

1. Brexit

Brexit is taking a deep toll on all businesses in general, and Irish ones are no exception. The British public’s vote to exit the European Union has meant huge uncertainly, resulting in issues securing funding in particular. It’s also lead to cautious spending across a range of targeted markets. On top of that, UK nationals that work in Ireland, as well as Irish nationals that work in the UK, are still unclear long term about whether they can stay. Social security arrangements and pension schemes are likely to have been impacted, with companies large and small having to consider the possibility of work permits and visas being required for existing staff.

Then of course there’s the exchange rate. Brexit uncertainty has meant sterling’s value has decreased sharply, which is already affecting businesses in the Irish Republic. Imports are rapidly becoming cheaper, which is good news for business that buy supplies from the UK, but exports are now more expensive. This means that companies looking to sell to UK customers from their Irish base are going to take a substantial hit.

2. Cash flow

The one major issue facing the majority of SMEs across Ireland is cash flow irregularity which in turn makes forecasting the hard times incredibly difficult. Whether a small business is brand new or well established, cash flow problems can quickly affect profitability, financial arrangements and reputation.

After the 2008 financial crash, many businesses had to be rebuilt from the ground up. However, SMEs particularly found that limited cash flow seriously affected not only their expansion plans but their immediate viability. Nowadays, although the effects of the financial crash are less stark, banks are still very wary about lending to smaller businesses. Indeed, money for SMEs in general can be hard to come by.

3. Staffing issues

For Irish SMEs, hiring, training and keeping good employees can be a minefield. Often when they take staff on, the brightest, most qualified and most driven team members don’t stay long before they’re tempted away by bigger competitors. With Brexit looming, SMEs may well also find they lose staff who now need work permits to stay.

4. Competition

Dealing with the competition is part and parcel of running a business but it’s something that many struggle with. SMEs specifically run the risk of clients leaving to go elsewhere, particularly if larger companies are able to undercut them.

5. Regulations and guidelines

When it comes to governmental laws and guidelines nothing stands still – this is particularly the case with employee laws, health and safety and compliance. Although such updates are essential for workers and clients alike, they are often time-consuming and expensive to implement, especially for SME where resources may be limited.

6. Stability

Many Irish businesses may struggle to build a loyal customer base, especially in the very beginning. This can present a major challenge when it comes to cash flow and profit.

7. Time

There really are never enough hours in the day and this is especially the case for managers of SMEs. Looking after a smaller company can be incredibly busy and managers tend to have a large number of responsibilities to take care of. Fitting everything in and still having time for a life outside of work can often be nearly impossible.

8. Strategy and forward planning

When money and time are really stretched, it’s easy to get so engrossed in the day-to-day tasks that planning for the longer term goes out the window. Finding the time and budget to develop a future business strategy is vital - but not easy.

9. Marketing

Marketing is at the heart of a business’ success in getting their message across. However, it requires a unique set of skills, and often a team of people, that many small Irish businesses simply can’t afford.

10. Investing in growth

The only way an SME is truly going to thrive long term is to grow and innovate - but that requires cash. Research and Development (R&D) Tax Credits are a Revenue-backed scheme that’s designed to encourage innovation across all business sectors in the Republic of Ireland. Qualifying R&D expenditure claimed through this scheme will attract a 25% tax credit for offsetting against corporate taxes, as well as a lower rate of Corporation Tax of 12.5%. This means that Irish businesses that undertake eligible R&D activities can claim a Revenue refund of €37.50 for every €100 worth of R&D spent. This effectively means that R&D Tax Credits reduce the cost of R&D by up to 37.5% in real terms - a massive leg up for SMEs especially.

Interested in finding out more? Talk to the R&D tax relief experts today

Submitting a successful R&D Tax Credit claim to the Revenue is often a complex process and mistakes can be very expensive.

Whilst many accountancy firms have some dealings with R&D tax reliefs, here at Tax Cloud (part of Myriad Associates), we specialise entirely in the R&D claims field. This means we can offer the very best, up-to-date guidance so you can be safe in the knowledge that everything is as it should be.

Also don’t forget to try the Tax Cloud calculator. With sections for both businesses and accountants it’s a handy tool designed especially to show companies in the Republic of Ireland what R&D Tax Credits they can claim.

For more information or further advice, feel free to call us on +353 1 566 2001 or use our contact page and we’ll get right back to you.

Barrie Dowsett, ACMA, GCMA
Author Barrie Dowsett, ACMA, GCMA CEO, Tax Cloud
Latest posts
21ST NOVEMBER, 2019 Irish SMEs Appear To Struggle More With Rising Costs Than Their Global Competitors
15TH NOVEMBER, 2019 Innovation In Your Irish Manufacturing Business: 5 Key Areas To Focus On
6TH NOVEMBER, 2019 Small Companies And Start-ups Get R&D Credit Boost Courtesy of Budget 2020
1ST NOVEMBER, 2019 How To Attract The Ideal People For Your R&D Project
24TH OCTOBER, 2019 Plan Your R&D Tax Credit Claim To Avoid A Last-Minute Panic
16TH OCTOBER, 2019 Why Should Irish businesses Use The Tax Cloud Portal For Their R&D Tax Relief Claim?
9TH OCTOBER, 2019 How Ireland Has Innovated: The Top 10 Irish Inventions The World Now Can’t Do Without
3RD OCTOBER, 2019 How The Rise Of Technology Has Affected R&D In Ireland
26TH SEPTEMBER, 2019 How Is Research And Innovation Supported In Ireland?
19TH SEPTEMBER, 2019 How R&D Could Be The Key To Post-Brexit Opportunities In Ireland?
12TH SEPTEMBER, 2019 How Can Irish Farmers Benefit From R&D Tax Credits?
5TH SEPTEMBER, 2019 What Are The Benefits Of Accountants Working With R&D Tax Experts?
28TH AUGUST, 2019 10 Biggest Issues Facing Small Irish Businesses Today
23RD AUGUST, 2019 What Deductions And Allowances Can Be Made Regarding My Corporation Tax?
15TH AUGUST, 2019 Are Only Big Businesses Eligible For R&D Tax Credits?
8TH AUGUST, 2019 Writing An Effective R&D Tax Credit Claim: Get The Technical Narrative Right
1ST AUGUST, 2019 How Can Irish Businesses Reduce Their Corporation Tax Bill?
26TH JULY, 2019 Top 10 Great Reasons To Start A Business In Ireland
19TH JULY, 2019 How Can Irish Businesses Boost Their Cash Flow Post-Brexit
12TH JULY, 2019 Growth Hack For Irish Businesses: Tap Into R&D Tax Credits
5TH JULY, 2019 What Projects Qualify For R&D Tax Credits In The Medical Industry?
1ST JULY, 2019 Why Use An R&D Tax Claim Portal Over An R&D Advisor?
24TH JUNE, 2019 Top Tax Cloud FAQs
21ST JUNE, 2019 Does Your Software Company Qualify For R&D Tax Credits?
Popular Tags
Start your Tax Cloud claim now Discover if you qualify and ensure your R&D tax claim is maximised. Get started
Powered by Myriad Logo

Myriad Associates helps businesses maximise tax credits and secure R&D grant funds. We specialise in R&D Tax Credits, Enterprise Ireland grants.

  • Submitting R&D tax claims since 2001
  • 100% success rate
  • Over €100m claimed and counting
  • Industry leading specialists
  • In-house technical, costing and tax experts
  • Member of the Research and Development Consultative (RDCC) committee

Meet some of the team behind Tax Cloud

Barrie Dowsett Barrie Dowsett ACMA CGMA Chief Executive Officer
David Farbey David Farbey MA, FISTC, FRSA Technical Consultancy Director
Deborah Chapple Deborah Chapple ATT Corporate Tax Director
Lauren Olson Lauren Olson MA, MISTC Senior Technical Consultant