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UK car industry warns next PM no-deal Brexit is not an option

UK car industry warns next PM no-deal Brexit is not an option

Britain’s car industry has warned the next prime minister against a “seismic” no-deal Brexit in October, which it said could add billions of pounds in tariffs and cause border disruption, crippling the sector.

Boris Johnson, the frontrunner to succeed Theresa May, and his leadership rival Jeremy Hunt, have said they are prepared to take Britain out of the EU without a deal on October 31.

Both have said, however, that this is not their preferred option.

Industry body the Society of Motor Manufacturers and Traders (SMMT) warned about the scale of disruption a disorderly exit would cause.

“Leaving the EU without a deal would trigger the most seismic shift in trading conditions ever experienced by automotive, with billions of pounds of tariffs threatening to impact consumer choice and affordability,” it said.

The UK automotive industry fears that a disorderly exit from the EU, its biggest export market, could see the imposition of tariffs of up to 10% on finished models and border delays which could snarl up ports and motorways, ruining just-in-time production.

A hard Brexit border could cost £50,000 a minute in border delays, the SMMT said.

“The next PM’s first job in office must be to secure a deal that maintains frictionless trade because, for our industry, ‘no deal’ is not an option – we don’t have the luxury of time,” SMMT chief executive Mike Hawes told a conference.

The UK car sector, rebuilt by foreign manufacturers since the 1980s, had been a runaway success story in recent years.

But since 2017 sales, investment and production have all slumped, blamed on a collapse in demand for diesel vehicles and Brexit uncertainty.

Brexiteers have long argued that the EU’s biggest economy Germany, which exports hundreds of thousands of cars to Britain ever year, would do its utmost to protect that trade.

The British car sector has faced a series of setbacks this year including around 4,500 job cuts at Jaguar Land Rover (JLR) and plant closure announcements from Honda and Ford.

Several investment decisions are also due, including whether JLR will build electric cars in its home market and whether Peugeot will keep its Vauxhall car plant open.

“If the right choices are made, a bright future is possible,” said Hawes. “However, “no deal” remains the clear and present danger,” he added.

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Report suggests new agri-food area for Ireland, UK

Report suggests new agri-food area for Ireland, UK

A new shared food safety and animal health area taking in the island of Ireland and the island of Great Britain as a whole should be created to prevent the Irish backstop taking effect, according to a report by a UK non-government body of MPs, academics, trade and customs experts.

The report suggests that such an arrangement would mean remove the need for customs, food safety and animal health checks between north and south, or between the island of Ireland and Great Britain.

However, Irish officials have flatly dismissed the idea as tantamount to Ireland having to leave the EU’s single market for agriculture and food safety.

The Alternative Arrangements Commission has set out a range of proposals that it claims would avoid the backstop taking effect in a 206-page interim report published today.

The commission is a privately funded organisation, which seeks to replace the backstop with other solutions in order to ensure that the Good Friday Agreement can be preserved, but that post-Brexit the UK will also in all circumstances have an independent trade policy.

The commission’s work is supported by a significant number of eurosceptics and DUP MPs, although it is headed by two Conservative MPs, Nicky Morgan and Greg Hands, who voted remain in the 2016 referendum.

The group’s interim report says that so-called alternative arrangements to the backstop should be “fully up and running within three years”.

These would include harnessing “existing procedures and technologies and customs best practice”.

It recommends the creation of Special Economic Zones on the Irish border and a “multi-tier trusted trader programme for large and medium-sized companies”, with exemptions from customs checks for smaller firms.

The report suggests that so-called Sanitary and Phyto-Sanitary (SPS) checks – i.e. animal, plant and food safety checks that would normally apply on an EU-third country border – should be carried out by “mobile units away from the border using the existing EU Union Customs Code or a common area for SPS measures”.

The AAC says a legal protocol should be “inserted into the existing Withdrawal Agreement”, or “utilised in any other Brexit outcome”.

Once Britain leaves the EU it will become a third country for trade purposes.

The UK believes that the future relationship negotiated with the EU, and/or the technology, trusted trader schemes and other such exemptions, will guarantee no hard border on the island of Ireland.

However, the EU and Ireland have insisted that a “backstop” is needed if those solutions work, and that it should apply “unless and until” some legal arrangement is found that guarantees no return to any hard border, the avoidance of related checks and controls, and the preservation of north-south cooperation.

The backstop is enshrined in the Withdrawal Agreement concluded between the EU and UK last November.

However, the treaty has been rejected three times by the House of Commons and was instrumental in the resignation of Theresa May.

Both sides have pledged in the Withdrawal Agreement, and its accompanying political declaration on the future relationship, to exploring “alternative arrangements” to the backstop.

But the EU insists that if they are not found to work, then the backstop – essentially Northern Ireland remaining in the EU’s single market for goods, with the UK as a whole remaining in a Customs Union with the EU – should apply until a legally operable solution is found through a free trade agreement.

Today’s interim report from the AAC says that “all future proposals must be based on the principle of consent” in Northern Ireland, and that “derivative of this, there can be no physical infrastructure at the border and no related procedures and controls at the border”.

However, the report recommends checks and controls happening “away from the border” where necessary, using, for example, “mobile SPS control”.

The AAC also says all sides should “understand the need for an executable and real UK independent trade and regulatory policy”.

Critics of the backstop suggest that it could result in the UK being trapped in the EU customs union if future free trade negotiations break down. The EU disputes this.

The AAC paper states: “There is no one solution to the Irish border – we propose a multi-layered approach, involving many different mitigations. We seek to give traders as many choices as possible.”

It suggests that exemptions under WTO rules could apply at the border based on national security and “frontier traffic exemptions”.

However, the most controversial suggestion is that Ireland would join the United Kingdom in a common area for animal health and food safety.

This area then would be “equivalent” to the EU’s legal regime governing these so-called SPS sectors by way of a “common rulebook”. It would be based on the Australia-New Zealand Food Safey Area.

The AAC states: “Such a common area would ensure no customs registration procedures within the islands as is the case for the Common Travel Area for people but would mean customs procedures being introduced between [Ireland] and the EU-26 (as is the case for people now) if the whole area diverged from the EU SPS rules in ways that were unacceptable to the EU.”

If the UK did diverge from EU rules, the paper suggests, the Ireland “could break” with this new common area.

Then, the paper suggests, the Northern Irish Assembly could “determine if NI remained within the all-Ireland common SPS area or stayed within the diverging UK SPS area”.

The AAC suggests that Ireland would have an interest in creating a two-island SPS area because it would make the Dover-Calais frontier more frictionless.

“…The economic data… shows that a significant volume (at least 70%) of trade into the EU-26 flows across the UK land-bridge. The vast majority of this trade ultimately enters the continent via Dover-Calais routes.

“The Irish Government therefore has a strategic interest in making sure the land bridge works (Dover-Calais).”

However, the idea has been swiftly rejected by Irish sources.

“There is absolutely no way Ireland is going to be dragged out of the single market by the UK leaving the EU, and left with this terrible decision in a couple of years time if Northern Ireland changes its rules,” says one source. “What do we do then? We’re left with the mess. It’s utterly unattractive.”

The commission also suggests lessons can be learned from other borders around the world, including the US-Canada frontier, where “the CSA Platinum programme allows highly trusted companies not to deal with customs at all (by filling out the equivalent of tax returns)”.

“These sorts of arrangements are particularly suitable for the Irish border and the largest companies that use it.”

If there was no common SPS area that would mean agri-food products and live animals moving north and south across the border would be subject to checks and veterinary certification procedures via EU-approved Border Inspection Posts (BIPs).

The report suggests these border posts could be moved “away from the border” and that “mobile units” could conduct checks where possible.

Currently, no such checks are required as both the UK and Ireland are in the EU.

The report also recommends a multi-tiered “ladder” system be applied to the current Approved Economic Operator (AEO) system.

Under customs and trade rules, in certain circumstances large “trusted traders” can be exempt from certain customs formalities.

However, most observers believe that the expense and the nature of Northern Ireland’s SME and micro-business economic profile means that AEO status would be out of reach for most companies, especially those that trade in agri-food across the border.

The AAC report suggests that the biggest traders would only have to submit papers on a quarterly basis, with “benefit packages” for those smaller companies on the lower end of the “ladder”.

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Consumers spent €1.7 billion online in March

Consumers spent €1.7 billion online in March

New figures from the Central Bank show that there are more payment cards than people in this country, with just over six million active credit or debit cards in circulation.

In the first three months of the year, Irish people spent just over €1.7 billion using those cards – that is equivalent to the Government’s health budget for the whole year.

The Central Bank figures show that for every €10 we spent using a costly credit card, we spent €53 with a debit card.

In that three month period, Irish consumers conducted 244 million point of sale transactions using debit cards – that does not include taking cash out of ATMs .

The average spend using a debit card was just over €40.

Using credit cards, consumers here made 34 million transactions, with an average spend of €80 – suggesting that consumers use credit cards for more expensive things.

Debit card spending grew by 19% year on year in March, while credit card spending grew by 10%.

The Central Bank figures also reveal that Irish consumers are spending more on online shopping as well.

Consumers bought €1.7 billion worth of stuff on the internet in March alone – that is the cost of the National Children’s Hospital spent in just one month.

Online shopping now accounts for half of all credit card spending and a quarter of all debit card spending.

According to the Central Bank, we are also spending more on overseas trips.

On average €0.5 billion a month went through credit and debit cards physically used outside of Ireland, including ATM withdrawals.

That amounts to a total of €1.6 billion spent abroad in the first three months of the year, 7% more than the same time last year.

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Join industry leader groups to get inspired

Q: I run two successful cafes. I don’t have a lot of space in either and I am really challenged when parents arrive with buggies and young children. How can I handle this delicate issue?

A: This is indeed sensitive. You run the risk of not only alienating parents, but also their family and friends. When I ran Superquinn, we embraced parents with children in every possible way. In fact, we positively discriminated in their favour.

We removed sweets from the checkouts to prevent rows, we provided supervised play facilities to allow mum or dad to shop unstressed, and entertained school tours at our bakeries so children could learn and we could immerse ourselves in the local community.

I understand the space restrictions, but I have seen cafes doing some innovative things which might help. Several have a dedicated number of mornings per week when they encourage parents with children to come and they remove some of the tables and chairs to allow room for buggies for a number of hours at a quieter time. While this doesn’t stop someone wandering in of their own accord, it does encourage those with children to come at a time which is child friendly.

Training staff to take some practical measures would also help. For example, if you have a storage area, perhaps staff can offer to put buggies away and assist parents with seating and ordering.

Other cafes provide distractions such as tablecloths and crayons for children to drawn on, or even a specific tiny play corner which keeps the children occupied while the parents eat. My advice is to make your response one of proactive management, rather than thinking about imposing some sort of ban that could have dire consequences on your business.

Q: As a young managing director of a successful company, I am unclear how I keep my role fresh and can use it to guide the company to success.

A: Congratulations on taking on a challenging role at a young age. There are lots of debates about what makes companies successful, and these centre on having the right product to offer, the right team, great marketing. But while all of those things are important, if you don’t have strong leadership within a business it may not succeed.

Your single biggest role will be to keep the business energised and challenge those around you to strive for perfection. The biggest problem you are going to face is that you will have no one to challenge you, and the role of managing director can be isolating.

I suggest you join a number of industry leader groups which will help to inspire you. Those leaders don’t necessarily have to be from your sector. The fact you are sitting with other senior level people will be inspiration in itself.

During my decades of running Superquinn I travelled extensively as I found that, in the majority of cases, for every problem we faced someone else around the world had solved it already.

Think about how you want to spend your typical week too. It is all too easy to get caught up in meeting after meeting and, before you know it, months have gone since you have last spoken to the customer. Whether that is a business-to-business customer or a consumer coming through the front door, you need to have some mechanism to keep in touch with the grass roots.

Article Source: http://tinyurl.com/kbwqb42

Mum-run firms organise pop-up event to encourage shoppers to buy local this Black Friday

Five small businesses are joining forces at a two-day event to encourage consumers to buy local, and Irish, this Black Friday.

Owner of online store CHAOS+HARMONY Roisin Scott is behind the ‘Indi Pop-Up Shop’, where herself and four other “hard working mamas” will set up stall and sell their wares.

“I’ve been in business just over two years now, set up just before Black Friday 2016, so I know what the pinch feels like at this time of year,” she told Independent.ie.

“I’ve met other small firms whose sales have suffered similarly, and consumers who follow us on social media know how hard we need to work, so I decided to do something about it.”

Roisin has participated in a number of SME events previously, including with Google and Facebook, but she decided to organise her own pop-up, and asked a number of businesses in her network to come along.

“As the mother of two smallies [Saoirse (4) and Cuán (2)] I thought it would be a nice idea to work alongside other mothers who run businesses, either full-time or on the side, and sell products that complement each other,” she said.

“There are so many other business I would loved to have on the day but were limited due to the space we had available.”

Irish shoppers have embraced ‘Black Friday’ and ‘Cyber Monday’, eagerly participating in the traditional American shopping bonanza, which falls on November 22 this year.
A recent PWC survey of 1,000 adults found that one in five Irish people will do the majority of their Christmas shopping on the Black Friday/Cyber Monday weekend, while a further 37pc are considering it.

The other stores taking part in the ‘Indi Pop-Up Shop’ at The Baths, Clontarf on November Friday 23 and Saturday 24 are Goose and Gander, My Higher Shelf, Primp & Style, and Under The Willow Paper Co.

Leather baby moccasins, children’s books, handmade Italian leather handbags, illustrated prints and children’s clothing will be sold over the two days “with a few bits and pieces for adults too”.

“We want to encourage people to shop local but we also want to push the idea that buying something as a quick gift to simply tick the box shouldn’t be the main goal,” said Roisin.

“Make an effort to buy something of more substance, something that won’t be forgotten, that will stand the test of play time and will be handed down again and again.”

Article Source: http://tinyurl.com/kbwqb42

One in three Irish SMEs targeted by fraud

A third of Irish small and medium businesses have been targeted by fraud in the past 12 months.

The most common types of fraudulent scams encountered by SMEs are phishing emails, which seven in 10 have experienced, according to research carried out to mark National Fraud Awareness week.

Other types of fraud encountered by businesses include invoice redirection scams, which one in five SMEs have experienced.

Of those that have been targeted, one in every 18 attempts at defrauding SMEs has been successful.

Despite considerable awareness among SMEs regarding the threat of financial fraud to their business, the research has found that two-thirds do not have fraud awareness guidelines and training in place.

In addition, more than a third of businesses surveyed stated that they do not confirm the legitimacy of new bank details from suppliers before confirming a payment.

Niamh Davenport, of FraudSMART, said that the impact of falling victim to a financial fraud scam can be devastating.

“I would encourage SMEs to familiarise themselves with the types of scams they can be targeted with, and take the necessary precautions to protect their business,” Ms Davenport added.

Fraud Awareness Week is spearheaded by FraudSMART, an initiative led by Banking & Payments Federation Ireland on behalf of the banking sector. The awareness week, which began yesterday, will focus on financial fraud prevention among SMEs.

Article Source: http://tinyurl.com/kbwqb42

Tech hub’s rocket man helps high-risk startups fly high

“People come into incubators and very often it’s just for space, they are thinking ‘that’s what I need, a nice space would be good’.

But actually, by the time they exit what you find is that the real value they’ve gotten is the networking, the connections, the monies they were able to attract as a result of making connections and talking to people, and the advice that they got from one another, the pure learning that they have.”

Tom Flanagan is director of enterprise and commercialisation at NovaUCD, an incubation centre for new ventures and entrepreneurs that has supported around 350 companies that in turn have gone on to create more than 2000 high-tech jobs since 2003.

Flanagan has been in the role just over a year, and his own background is in engineering. After graduating from UCD he worked in the UK, then moved to Canada where he worked as an engineer and then found himself moving – up the corporate ranks and out into the wider world.

From Canada, he moved to San Francisco with Nortel Telecommunications. “That was a Canadian company that spread into the US at the time of telecom deregulation and I became vice president for sales and marketing for Canada and a central part of the US for professional services. It was a global job so I was doing work all across Asia and Europe as well,” Flanagan says.

“And then we had the dotcom crash and at that stage there was an opportunity to come back to Ireland. My daughter was four at the time so it was perfect time for her to meet the grandparents and for the grandparents to meet her, and it all worked out nicely – she’s 20 now!”

Back in Ireland Flanagan worked in consulting roles, “supporting people, helping people develop businesses”.

“I found that was really interesting, then I went into Dublin Institute of Technology as the industry liaison person and set up the first tech transfer office in DIT, expanding it out into Tallaght and Blanchardstown and built up the ‘Hothouse’ incubation facilities at the college.

“Then this opportunity [with UCD] came up and this is a great opportunity in terms of coming into an established incubator and tech transfer hub to see what we can do to grow this – I’m a year in now.”

The incubator in UCD works with two types of companies, what they call ‘spin-ins’ and university-grown companies.

Naturally he is a big advocate for the benefits of startup hubs.

“I have seen this before when I set up the first tech transfer office in DIT and in other colleges as well, researchers tend to do great research and they publish papers and they go to interesting conferences, but nothing comes of the research in terms of making new products and services,” he says.

“What the transfer offices do is look at the opportunities, look at the inventions, and see what applications they might have and develop what those applications into real projects, and either you can license it to a company or there is a need to put together a team around the technology and develop a business, and that’s new ventures, so that’s what we would do here,” Flanagan adds.

“There are [professors that set up their own business] but I consider them to be the exception, people that can transition from an academic environment to business.

“More often what we are looking for is the academic who will have a great technology or a great business potential project, then it is important for us to kind of marry them up with somebody that has the business experience, that has the commercial experience.

“We are all the time on the lookout for mentors or people who want to come in and be a CEO, and we would show them the different opportunities that might suit their area.

“They would have to meet with the researchers and the rest of the team and would have to like one another, it works out quite a lot, there are times when it doesn’t work. The researchers recognise the skill set that is needed and that there is a lot of heavy lifting in being a CEO to go get investment, to go convince customers that this is the right product for them.”

On average the hub would develop four or five new ventures a year from different research.

Success stories from NovaUCD include ChangingWorlds acquired by Amdocs in 2008 for over $60m, BiancaMed acquired by ResMed in 2011, and Logentries acquired by Rapid7 in 2015 for $68m.

In addition to the companies it develops, it has around 80-100 inventions that it sees every year, from which it files between 20-30 patents a year. On top of that it is doing 20-30 licences a year to different companies including the likes of Glanbia.

As well as the university founded companies, NovaUCD also has a lot of ‘spin-ins’. “Companies where the idea might have come from another university, or they might have come out of an industry with a business proposition and then they would come in here and we would support them develop that proposition and take it through to raising finance.”

With university-grown companies, UCD will acquire equity in the startup.

“We would typically have 15pc equity in the company on formation, which gets diluted over time as more investments come in.

“For a spin-in company we don’t take equity, we just support them. They pay their way in terms of paying for the facilities here and support services, and we will do everything we can to help them develop. The fees are based on the space that they want to take.”

Giving up 15pc of equity in a business is no small decision for a startup, and the discussion turns to the benefits for companies in being part of an incubator.

“It makes a lot of sense to be in an ecosystem like Nova here or any of the innovation units, where you are surrounded by people of a like mind.

“They learn more from one another than they do from anybody else and they have contacts and connections, so getting into the ecosystem of startups is really important. It will help you shape up your idea, give you access to talent, give you access to finance and plenty of advice to set you on the right direction.”

Flanagan adds: “If you set up a company today and you have a good business proposition and you could benefit from all the services that we provide here then we would interview you to see what the match-up might be; is there research going on that might help your company have a competitive advantage? Is there finance? Could we put you in front of the right kind of investors? Can we add value to your business plan?”

In terms of the type of businesses that NovaUCD is looking for, gesturing with his hand, Flanagan says “rockets”.

“We are not looking for ones that trundle along. It is about high-risk, high-reward, it is about looking at companies that would meet the kind of Enterprise Ireland High Potential Start-Up, the €1m turnover in three years.

“And we would have a mix of companies, it wouldn’t matter what the technology was because UCD has everything from data analytics and computer science all the way through to medical.”

Funding is obviously a big concern for the businesses.

According to Flanagan, most of the companies start out raising finance in Ireland through angel investment and Enterprise Ireland funding and then venture investments.

“Some of them go to the UK and raise money there as well, and some of them go to the US and raise money there through venture funds there. As then as they grow they might get additional investments from corporates also.”

With some companies in the hub looking to the UK to acquire funding, not to mention its proximity as a market for businesses, one imagines that Brexit is a concern for NovaUCD.

“Everybody is very aware of it and everybody has been thinking about it.

“Your suppliers may not be in the UK and they may not appear to be impacted by Brexit, but maybe their suppliers are, so there can be a ripple effect.

“Maybe the customers you sell to aren’t immediately impacted by Brexit, but their customers could be and therefore they will be.

“So, for companies it is about looking in both directions, looking at the impacts on supply chains that they are involved in and the opportunities that are there, the risks that are there, particularly for food and agri-tech companies where the initial market will be the UK.”

However, he says that a lot of the high-tech companies are more focused on developing their product here and selling it in the US.

“If they are doing that then Brexit has less impact on them.”

Before we conclude, the question of advice to entrepreneurs comes up. For Flanagan it’s simple: “Don’t keep your idea to yourself.”

“Talk to people about it because you will get lots of feedback and you need to get lots of feedback to shape up the idea.”

“There can be a tendency to hold off on telling people about it because somebody is going to steal your idea, but people don’t usually steal ideas because it is only the person who comes up with the idea that has that energy to put behind it and has that insights as to how it can be developed.”

Article Source: http://tinyurl.com/kbwqb42

Fewer than one in ten SMEs embracing remote or flexible working

Fewer than one in ten small and medium businesses in Ireland are embracing remote or flexible working.

This is despite the fact that a majority of SME employees are in favour of such working conditions, according to a study of nearly 600 small businesses carried out by Vodafone.

Smart working is the combined use of technology with flexibility and agility for employees to work from home or co-working hub or hybrid model. One in three employees see it as top priority in their current role, while half of SME employees feel that it will be in a future job.

While Brexit is repeatedly highlighted as a concern for many businesses, nearly 90pc of SMEs are predicting growth between now and 2021.

This optimism was shared by employees, with nearly two thirds expressing confidence about the future prospects of their company. Munster is the most optimistic region, with 67pc of SME employees living in the region feeling confident about the future prospects of their company.

When asked about investment, 60pc of SME business owners surveyed confirmed that they plan to invest in their business within the next 12 months; with the majority (71pc) being spent on staff attraction and retention.

This is followed by sales, cited by two thirds as an area of investment and technology & digital tools (57pc).

When looking at digital skills, 22pc of employees felt that they did not have the necessary skills required for their role, with a further one in five unsure whether they had the relevant digital skills required.
Commenting on the findings, Sven Spollen-Behrens from the Small Firms Association said that the economy is growing and so is Ireland’s SME sector.

“However, we need to take measures to protect this growth.”

“Whilst we are seeing confidence among our members we also see concerns around our competitiveness especially in light of Brexit. Challenges like attracting and retaining talent, the increasing cost of doing business in Ireland and a tax system that puts smaller businesses at a disadvantage need to be addressed.”

Article Source: http://tinyurl.com/kbwqb42

Irish banks must shed a further €9bn of bad loans to meet ECB targets, Moody’s has warned.

Unlike the early period after the crash, when sales of commercial real estate and developer loans dominated the great bank sell-offs, further disposals will be dominated by home loans, the rating agency said.

“This is because legacy mortgage arrears, which take a long time to resolve internally in Ireland due to legal constraints on home repossessions, now account for most of their remaining non-performing loans (NPLs).”

The report by Moody’s Investors Service said Irish banks’ high stock of problem loans is still a burden, despite action since 2013 to reduce the scale of the issue.

And it confirms that the target to cut bad loans to the European average is becoming harder to hit, as the average elsewhere declines.

“The largest Irish lenders will need to shed about €9bn of problematic exposures to bring their ratios of NPLs to gross loans into line with the European average, which has now fallen below 4pc,” said Roland Auquier, a Moody’s assistant vice president

At the start of this year the main banks here came under pressure from Europe’s Single Supervisory Mechanism (SSM), a regulator, to cut their bad loans to around 5pc of all lending, the then average.

That prompted major loan sales this year including by AIB, Ulster Bank and Permanent TSB, and has triggered Bank of Ireland and KBC to rethink their previous and long-held policies of working through customer loans rather than selling.

Bad loans remain a major issue on bank balance sheets here, Moody’s noted, despite, Ireland’s strong economy although it will drive further problem-loan reduction.

Moody’s expects real gross domestic product (GDP) to grow by 5pc in 2018 and 3.5pc in 2019, fuelled by rising employment and investment rather than credit growth

Irish banks’ NPLs will drop to 8pc by the end of 2018, once portfolio sales planned by Permanent TSB, KBC Ireland and Ulster Bank are completed, Moody’s said.

One reason mortgage sales now dominate is that bad loans across other lending areas – such as property, SME, development and buy-to-let property loans happened faster and earlier.

Residential mortgages account for over half of the stock of remaining bad loans, Moody’s said. If they are not sold, the rating agency says they’ll take years to resolve.

“In the absence of loan sales, we expect that the legacy portfolio of non-performing residential and buy-to-let mortgages would require a long time to wind down, as it consists largely of long-term arrears,” Mr Auquier added.

Article Source: http://tinyurl.com/kbwqb42

Startup diary: For every €1 you spend in marketing, make €2 in revenue

Our podcast is now live. (A search for voxgig on iTunes will bring it up.) It is, as with most things we do, a soft launch. There’s only one episode just yet. Our general strategy for getting things done is accept embarrassment with version 1, and then iterate our way out of mortification. It might be a little painful at the start, but it helps us avoid wasting resources – it’s easy to be wrong about what you think people want.

Before we get into our tactical approach to publishing a podcast with a new episode each week, let’s step back and review the strategic reasons for going to the effort of doing so.

We’re a Software-as-a-Service (SaaS) business. That means we need people to come to our website, like what they see, sign up, and use the system.

Getting people to visit your website is something you have to work very hard at. The cost of doing ends up as the major cost for any SaaS business. It is technically known as the Customer Acquisition Cost (CAC). This is an important metric for our business model, as it helps you determine if you have a real business.

You couple it with another metric, Lifetime Value (LTV), which is the total revenue you’ll generate from a customer over the total period that they use your service. For example, if your service costs €50 a month per user, and each customer has on average 10 users, and the average customer stays for 20 months, then the LTV is 50 x 10 x 20 = €10,000. If you add up, on a monthly basis, all your marketing and advertising costs, and I mean everything, including salaries, and divide that by your number of customers in that month, you can estimate your CAC. Let’s say it’s €5,000 (If you’ve ever spent money on Google or Facebook ads, you’ll know that’s easy to rack up).

That means that for every €1 you spend on marketing, you can generate €2 in revenue. That’s good! You can express this idea as a ratio: LTV/CAC. If it’s greater than one, you’re good. If it’s less than one, you might have a problem.

Things are not quite as simple in real life as my example workings. There are more accurate ways to calculate these metrics, and you might push your LTV/CAC under one to gain market share. A quick google will turn up far more than you ever wanted to know about LTV/CAC if you go looking.

One way to reduce your CAC and improve the ratio, and hence improve the ‘unit economics’ of your business, is to use inbound marketing. Instead of paying for expensive high-volume advertising (you will end up doing this later anyway), concentrate on building a highly qualified audience for good quality content. This gives you a initial community to kick start things when you launch.

To build our community we’ve invested in the speakers’ newsletters – you get the numbers on that each week. We’ve also decided to launch a podcast, where we interview public speakers about speaking at conferences. Both of these activities are very much focused on the needs of the reader or listener. We’ve not talking about more traditional product newsletters or pitches here. This is about community-building. The other way we build community is via our event professionals meetups (I’ll need to give you an update on those next). And we also plan to launch a newsletter for event organisers soon. All of these things come together to generate an highly-engaged audience that will hopefully both trust us (great content, no ads), and find our product useful.

How will we know if we are succeeding? You have to track ‘conversions’. That means, of your monthly audience, what percentage are turning up at the website, and what percentage are signing up for user accounts? We will live and die by these numbers. In practical terms, we will continue to experiment with the content and production of our inbound marketing mix, and try to find ways to increase the audience and improve conversions. This approach has to be quite scientific – the content costs money to produce, and the premise is that it is a least an order of magnitude less expensive than simply advertising all the time.

So that’s why we do a podcast. Now, how do we do a podcast? We’ve figured out how to produce the audio, but we’re still figuring out the promotion piece. As with the speakers’ newsletter, we need to ‘operationalise’ the podcast – turn it into a weekly, disciplined and measured process.

For the newsletter, we use a project-management tool (asana.com – highly recommended) to track each recurring weekly task. Every day brings together some element of the newsletter so that we can hit ‘send’ on Fridays. For the podcast, we’ll need to work out which day of the week we’ll publish on (it is received wisdom that some days of the week will see higher audience engagement – we’ll see), but unlike the newsletter, we have a much longer preparation period.

The biggest challenge with publishing a weekly podcast that is based on guest interviews, is scheduling those interviews. Great guests are great speakers, and tend to be very busy successful people who travel a lot. The scheduling effort (and associated costs) was not something we fully appreciated. Then each podcast episode needs: a separately recorded introduction, audio preparation, written show notes, a blog post, updates to our website, quality review, and uploading to the distribution service (we use libsyn.com – I’ll let you know how it goes). Most of those activities do not happen in the week of publication. Our challenge is to track the flow of work for each podcast and ensure that every week we have one ready to go. Our initial strategy is to build up a reserve library of recording as we figure this out – we have 12 podcasts in various stages of readiness right now, but it has all been pretty ad hoc so far. That will need to change once we launch. Then we need to build a process to promote the podcast. We need a social media strategy, of course, but we also need an outreach strategy – just like the newsletter we may decide to reach out to people who would probably be interested in subscribing. Finally, the newsletters, podcasts, and all of our material needs to cross-promote – and we’ll need to figure out the best way to measure all this.

If that sounds like a lot of work, you’re right. We have had a lucky break that makes all of this possible – a new head of marketing will be joining soon, and will take on much of this work. In a startup you always hire only when the need is utterly desperate and you just can’t keep up with the workload anymore. When it comes to our marketing, we’ve reached that point.

(Newsletter update: 4,624 subscribers, and an open rate of 14pc. Podcast update: six downloads – well, you’ve got to start somewhere)

Richard Rodger is the founder of voxgig and former co-founder of Nearform, a Waterford-based tech consultancy

Article Source: http://tinyurl.com/kbwqb42