Three EU flags in front of a Eurozone recovery banner on the Berlaymont building of the European Commission

Eurozone Recovery, Irish Opportunity: How Irish companies can benefit from the EU’s recovery plan

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Key takeouts

  • NextGenerationEU funding represents an opportunity for Irish companies to break into new markets or scale their presence in existing markets
  • From digital health care and green technology to smart cities and cybersecurity, there are hundreds of Eurozone recovery projects that will be fully funded by the EU
  • The Enterprise Ireland Eurozone team can help you find the right markets and projects to target

 

 

What is NextGenerationEU?

We are living in extraordinary times, but it’s not all bad news for Irish business. Over the next couple of years, those who can or who are keen to export can take advantage of a significant opportunity, fuelled by the NextGenerationEU funding package put in place by the European Commission. At €750 billion*, it’s the largest ever stimulus package in Europe and some is directly aimed at SMEs.

“The objective is twofold,” explains Marco Lopriore, at the European Institute of Public Administration (EIPA). “It is recovery, to help the European economy recover from the past year, but it is also resilience.

“This is a push for a radical transformation of consumption and production to prepare European economies to withstand future crises in a better way. We’re speaking in Brussels about a paradigm shift. This is basically changing the way we function completely.”

Within the overall project, the EU level of investment is supplemented by the agendas and priorities of each national government.

*The current value of the funding is €806.9 billion. It was €750 billion when agreed in 2018.

 

 

What does the Eurozone recovery plan mean for Irish SMEs?

This Recovery and Resilience Facility (RRF) means a wave of funding unrolling across all 27 EU member states to support investment in public services and infrastructure, to make Europe greener, more digital and more resilient.

As Ireland seeks to build a deeper trade relationship with Europe, that funding represents an excellent opportunity for Irish companies to break into new markets or to deepen and scale their presence in existing markets.

Across everything from digital health care and green technology to smart cities and cybersecurity, there are hundreds of Eurozone recovery projects to complete across the EU over the next few years. All of them will be fully funded.

“SMEs are not always directly affected by macroeconomics,” says Anne Lanigan, regional director, Eurozone at Enterprise Ireland, “but when that volume of money is going into it, especially to drive the green and digital agenda, it has to have an impact on what is happening at a business level.”

 

 

Core focus on green and digital

European Commission bannerThe overall fund is focused on six pillars, with the green transition and digital transformation being top of the list. The European Commission has specified that each country must assign at least 37% and 20% of their spending to those pillars, respectively.

“Several member states have gone beyond those minimum thresholds,” says Lopriore. “Luxembourg, for example, is putting 60% to green, while Germany is putting 50% to digital.

The green transition covers everything from clean tech, renewable energy and energy efficiency, sustainable transport, improving water quality to creating greener cities and making farming more eco-friendly.

Digital projects to get funding span 5G, digitalisation of public service, cloud computing, smart cities, artificial intelligence, blockchain and more, including projects focused on reskilling and upskilling to improve digital literacy.

 

 

Leaning into Irish tech expertise

Areas in which many Irish firms specialise, such as cybersecurity and the digitalisation of health are a significant focus in many plans, says Lopriore, who wrote extensively on national areas of focus for NextGenerationEU funding in a recent paper.

“In Belgium, for example, the plan is to spend €585m on digitalisation, of which almost €80m is allocated to cybersecurity. Spain wants to reinforce cybersecurity on its rail network, its air traffic control, its central public administration and in the tourism sector.”

When it comes to providing health and medical services online, France will invest €2 billion in the digitalisation of health, while Germany will invest €3.8 billion.

 

 

Breaking into a new European market

The funding offers new momentum to Irish exporters targeting Europe, a trend that was already soaring, says Lanigan.

Anne Lanigan, Patrick Torrekins, Leo Varadkar, Leo Clancy“Since we implemented our Eurozone strategy in 2017, we’ve seen a 33% jump in exports from Ireland to the Eurozone,” she says. “Even in 2020, when some sectors were hit very hard, we still saw a 1.6% growth in exports, which is significant considering economies across Europe shrunk.

For companies that want to export for the first time or to diversify their export markets, Enterprise Ireland can offer support and advice. This includes everything from market research and helping a company to get export-ready to tapping into a wide network of contacts and making the right introductions.

“The easiest model is where a client is looking for a customer and we can introduce them,” says Lanigan. “Exporting often involves a local partner and we introduce companies to the right people– the local influencers, the potential partners and those they could collaborate with, including other Irish companies.

“We work to build clusters that bring companies in the same space together,” she explains. “If there is an opportunity around smart mobility, for example, we can bring companies working in that area together and introduce them to the right people.”

 

 

Finding the right market to target

The markets of interest to individual companies will depend on the nature of the products and services they offer. Those selling into the tourism and hospitality sector, for example, will find more extensive opportunities in Southern Europe, where governments are placing more emphasis on this sector.

Many countries mention renovating buildings to be more energy-efficient and installing more electric vehicle charging situations, but Germany is putting particular emphasis on hydrogen production and AI, for example.

Detailed country-by-country information in English on the plans and priorities of each Member State can be found here.

 

 

How will the Eurozone recovery funding work in practice?

  • While SMEs may believe trying to tender for public contracts is too complex and likely to be choked by red tape, 15% of the NextGenerationEU funding will benefit SMEs – more than half of that in direct business.
  • Furthermore, Enterprise Ireland can advise on the tendering process.
  • In practice, each EU state has its own national Resilience and Recovery Plan (RRP), with all projects in it open to public tender on an online portal.
  • Some of these portals, such as those of France, Italy and Portugal, are already up and running.
  • Every project linked to this Eurozone recovery funding must be completed by 2026.

 

 

Rising to the export challenge

While deciding to expand export operations can seem daunting to some, Lanigan encourages Irish business owners and managers to examine the RRP options open to them. That includes going beyond the UK, even as a first export market.

“Diversifying our export markets has become even more important since Brexit,” she says. “Now, 29% of our clients’ exports go to the UK, but that is down from 45% a decade ago.

A marked improvement in marine links is helping, she adds, as more routes with more capacity mean it is much easier to trade directly with EU customers.

“We have a huge market on our doorstep. After all, we have the biggest free trade agreement in the world, with no customs, no tariffs and no regulatory challenges. And, of course, for 19 countries in the Eurozone, there are no currency costs.”

“Irish companies have a great reputation across Europe, with customers having a really positive view of them. And when you see the Irish products and services selling into Europe – they are top notch and born of incredible innovation – it’s evident why they are well regarded.”

 

If you’re interested in starting to export to the Eurozone or in growing your exports to the Eurozone, get in touch.

Market Watch – Spain

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Overview

  • Spain has begun to officially open up again, but some restrictions will remain in place for the coming weeks.

  • Challenges around transportation and quarantine still exist, but supply chains are moving.

  • Irish businesses should continue to communicate with their existing clients as the country is very much open for business.

Like the rest of Europe, Spain was badly impacted by the global pandemic but Alberto Cisterna from the Enterprise Ireland office in Madrid, says restrictions have begun to be lifted and businesses are easing towards a new normality.

“The Spanish healthcare system was overwhelmed by Covid-19 and Spain was one of the first countries to enact a total lockdown,” he says. “But we are very happy to see that the number of cases has fallen sharply, and this has enabled the government to start easing some of the measures which have been in place since March.

“This plan for a Transition Towards a New Normality was announced at the end of April and consists of four phases which are intended to relax the restrictions in a gradual, flexible and adaptive way. And although it started officially on the 4th of May and will last for eight weeks until the end of June, we are still in a state of alarm.”

 

Challenges and opportunities

Cisterna says while businesses in Spain are getting back to normal, some challenges do lie head.

“Firstly the challenge exists regarding transportation options and border restrictions as Spain’s air, land and sea borders have been closed for entry from May 15th and remain so – with limited exceptions,” he says. “And until the 30th of June, passengers arriving in Spain from other countries will be required to quarantine in their place of accommodation for the first 14 days immediately following their arrival.

“It is also important to highlight the fact that the supply chain in the country is fully operational as these measures do not apply to the transport of goods.” Alberto Cisterna, country manager Spain and Portugal

“And also teleworking, or video conferencing, is still the main priority for businesses across the country in response to the pandemic and this will continue to be the same for at least one more month.”

But despite the hurdles which need to be overcome, he is quick to point out that there are also some opportunities to be had, providing clients continue to engage with their counterparts in Spain.

“I would like to remind our client companies that Enterprise Ireland in Madrid is open for business and we are conducting as many engagements as possible,” he says. “In fact we are very happy to say that we have seen some deals confirmed even during the worst phase of the pandemic.

“One important recommendation for our client companies is to stay in touch or to reconnect with their agents, distributors or business partners and also to plan ahead for the Covid-19 post new normality – it really is very important to keep communicating.

“In addition, I would like to remind people that Spain is the fourth biggest economy in the Eurozone, and it represents a great opportunity because of its market size, particularly in sectors such as ICT or digital technologies.

“So my key message today is that we are looking forward to continue working with our Irish client companies as Spain is definitely open for business – and as sale cycles in this country have historically been very long, let’s use this time to plan for the future as Spain is a big economy with a lot more room for new opportunities.”

 

Get key insights on doing business in Spain and the supports available from Enterprise Ireland.

Managing Cashflow

Managing Cashflow in a Crisis

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As managers reset the business for recovery, companies need to adopt a lean culture where expenditure is minimised and every cost is questioned.

One of the greatest risks facing many businesses in the current environment is running out of cash. A company that can’t pay its bills, regardless of how profitable it is, will quickly go out of business. Cash conservation is therefore key to survival.

While in the medium to longer term companies will have to look at reengineering their business and operational models in order to meet challenges presented by the post-Covid-19 world, the short term is going to see a focus on cash according to Business Financial Consultant Brendan Binchy.

“There is much more urgency relating to cash now,” he says. “And there are many things a business can do to manage its cash. Almost everyone out there is availing of debt payment deferrals, for example. They are trying to hit the pause button on cash going out wherever they can so that they can preserve the status quo as much as possible. They are also looking at other areas like aged debtors. You almost have to look at it like a company threatened in a pre-receivership condition.”

Binchy recommends a structured approach to cash conservation and this starts with the balance sheet. “The profit and loss account is a record of a business over a period of time, but the balance sheet gives a snapshot of the business at a particular moment in time.”

Companies should pay particular attention to their gearing, he advises. This is the ratio of debt to equity on the balance sheet. “The lower it is the better, but losses will erode equity and increase the gearing ratio,” Binchy continues.

A healthy gearing ratio will allow companies to borrow judiciously in order to bolster their cash position. “This can be very helpful, but companies need to be aware of the associated debt service costs.”

The next step is to look at asset funding, where they may be scope for some reverse engineering. “Businesses frequently purchase assets for cash during good times,” Binchy notes. “They could be re-financed now with bank debt and this will improve the cash position. Generally speaking, the asset lifetime and the funding cycle should be the same. It is important to remember that trade debt, like invoice financing, is for working capital not capital expenditure.”

The sales lead to cash cycle is the next area for examining.

“It takes time for marketing effort to translate into sales leads, buying decisions, billing, and cash collection”, Binchy explains.

 “This can be quite protracted, and companies need to look for ways to get to close sales quickly and speed up invoicing.”

The supply chain should also come in for attention to slow the outward flow of cash. “Companies should identify strategic supplier relationships, tighten stock management overall, improve workflows, and negotiate new arrangements such as stockholding facilities with key suppliers. Talking to key suppliers and developing strategic partnerships is a very good ongoing strategy for companies. The more they do it the better.”

And then there are what Binchy calls the common-sense measures.

“Defer capital expenditure and other spending decisions wherever possible,” he advises. “Companies need to adopt a mean and lean culture where expenditure is minimised, and every cost is questioned. But this must come from the top down and everyone must share the pain and to be seen to share it.” 

Once those actions have been taken, it is time to put together a budget plan. “Having these measures in place means you already have your fingers on the pulse and you can make a budget plan to take you from where the business was before the crisis to what’s likely to happen afterwards. The most important thing about the plan is that it should be iterative. You’re not going to get everything right first time around. The plan gives you a framework to forecast and plan for what might happen. You can adjust it weekly and monthly rather than having to build new plans all the time.”

And businesses don’t have to do this on their own. Binchy recommends the Enterprise Ireland Lean Business Continuity Voucher as a good starting point. This offers eligible companies up to €2,500 in training or advisory services to help them identify and implement the measures needed to ensure they can continue to operate during the Covid-19 pandemic.

There is also the Covid-19 Business Financial Planning Grant, which is worth up to €5,000, and can be used by companies to pay up to 100% of the cost of engaging an approved financial consultant to assist them prepare a financial plan, understand their immediate financial position, manage costs and identify their funding requirement.

When it comes to cash for the business, Binchy points to the Temporary Covid-19 Wage Subsidy which he says has been very helpful to businesses throughout the country.

Sources of working capital and loan finance include the €450 million Covid-19 Working Capital Loan Fund and the €200 million Future Growth Loan Scheme fund available through the Strategic Banking Corporation of Ireland. Businesses which have difficulty accessing bank finance can apply for funding of up to €800,000 from the Enterprise Ireland Sustaining Enterprise Funds. There is also a fund for smaller companies which offers funding of up to €25,000 and €50,000 depending on the size of the business.

 

    Hear from financial expert, Brendan Binchy and Enterprise Ireland’s finance team in our Accessing Liquidity & Managing Cashflow webinar.

    Market Watch Germany – Webinar – Managing and supporting channel partners

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    Enterprise Ireland’s offices in Germany have launched a series of Webinars: Market Watch Germany. Every Wednesday at 14:00 BST/15:00 CET a new theme will be addressed to help Irish companies exporting to Germany navigate the challenges and opportunities presented by Covid 19.

    Managing and Supporting Channel Partners in the German market’ is the fourth installment of Market Watch Germany webinar series. The purpose of this webinar is to help Irish companies exporting to Germany navigate the challenges and opportunities presented by Covid-19.

    Panellists:

    Brian English an Engineer and Marketer with over 30 years international sales and routes-to-market experience.

    Dr. Andrea Seidel, with a wealth of experience in business development and strategic partnership.

    Paul Browne from Enterprise Ireland’s Client Management Development & Client Skills department.

    Financial planning to accelerate your recovery

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    The global economic crisis triggered by the Covid-19 pandemic is unlike any seen before in history in terms of the rapidity of its onset and its scale. It has been variously referred to as a black swan event or as a perfect storm, and for individual businesses worldwide its effects have included state- mandated shutdowns, a near total collapse in demand and, for the lucky, an enforced shift to new ways of working and business models.

    As Ireland begins its first tentative steps towards a return to something approaching normality, businesses too must start planning their pathway to recovery and beyond. According to Business Transition Consultant Brendan Binchy, the first step for business owners is to analyse the company’s current position and develop a vision for the future.

    He advises people not to panic. “It’s not a question of asking if the crisis will impact on the business and worrying about that,” he says. “It is self-evident that it will impact. You have to be proactive, not reactive. You might know how it will affect the business this year, but what about next year? Where do you want to be then? You need a to have vision for that. And from there you can work out what to do and what not to do and what you need to change.”

    There are also actions which need to be taken immediately to stabilise the business. In Binchy’s view, these actions require businesses to examine and reset their business models, develop and implement very tight cash management strategies, and adapt and modify their operations to meet the new conditions in which they find themselves.

    “You have to look at where you are financially, ask where your customers are coming from and why they buy from you, and if it is possible to recalibrate the business, to come up with a new model which will see it through the current period,” he advises.

    That might be termed the firefighting or survival phase. The next stage is to plan for recovery and beyond. While planning in such times of massive uncertainty may seem an impossible or even futile task, Binchy believes it is worthwhile and an absolute necessity.

    But the plan must be flexible and adaptive in order to deal with sudden changes in a highly dynamic environment. “We have to accept that what we think will happen may not come about. But if you don’t have a flight plan, you have no way of getting to your destination. When you’re up in the air you need to know where you’re going. You may get knocked off course from time to time and you will need to adjust the plan in response.”

    Even the process of putting the plan together can be helpful, he notes. “It is cathartic and helps clarify things.”

    This clarity comes from the examination of the business and its environment. Questions Binchy puts include:

    • Is your industry shut down or is it still working?
    • Are there opportunities there?
    • What has been the impact of the crisis on customers?
    • Do they still have money?
    • Do they still need your products or services?
    • Are there customers you no longer need?
    • What has been the impact on competitors?

    Fortunately, there is help out there both to develop plans and implement them.

    He points to the Enterprise Ireland Covid-19 Business Financial Planning Grant as a very important support. The grant, worth up to €5,000, can be used by companies to pay up to 100% of the cost of engaging an approved financial consultant. The consultant will work with the company to prepare a robust financial and business plan that identifies the funding needs and the potential sources of this funding.  

    Another valuable support Binchy advises businesses to take note of is the Lean Business Continuity Voucher, which offers eligible companies up to €2,500 in vouchers for training or advisory services to help them identify and implement the measures needed to ensure they can continue to operate safely during the Covid-19 pandemic.

    Support for the implementation of the plan is there in the form of the Enterprise Ireland Sustaining Enterprise Fund, which offers funding of up to €800,000. Very importantly, no repayments are required for the first three years of the five-year term of the advance and there is an annual administration fee of just 4%, making it a very attractive source of finance.

    Smaller businesses can also apply for advances of up to €50,000 depending on their size under the Sustaining Enterprise Fund – Small Enterprise scheme.

    “Businesses can also look to shareholders to put in new capital or go to the banks,”, Binchy concludes. “The important thing is to develop a plan and have the finance in place to implement it.”

     

    Watch our webinar addressing the critical challenges facing Covid-19 impacted businesses – Accessing liquidity and managing cashflow.

    Get advice from financial expert, Brendan Binchy on how best to navigate these issues and hear from Enterprise Ireland’s finance team on the financial supports available from Enterprise Ireland.

    Offshore Wind Webinar – Global Market update and Covid-19 Assessment

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    In the second of its Offshore Wind Webinar series, Enterprise Ireland’s Offshore Wind Cluster are joined by the Renewables Consulting Group which provides an update on the global offshore wind market outlook and assess the implications of Covid-19 on the industry.

    Dr. Lee Clarke and Sebastian Rae present detailed analysis from RCG’s recently published Global Offshore Wind Annual Report and focus on the following:

    • Provide an overview of the industry’s evolution
    • Outline key development hotspots
    • Highlight several markets of interest to Irish companies in the space
    • Assess the implications of Covid-19 on the offshore wind industry and supply chain

     

    Anne Lanigan Enterprise Ireland

    Market Watch – A view from Europe

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    Key Takeaways

    • Business in Europe has been severely impacted by Covid-19, but many countries are now beginning to re-open and are determined to get industry and business moving again
    • Movement of products is improving while movement of people is still a challenge.
    • Opportunities are likely to emerge for example in digitisation across industries; or in the healthcare sector for non-Covid related health issues.
    • Preparation and planning is vital.
    • Enterprise Ireland offices around the region are on hand to offer support.

    There is no doubt that Europe has been heavily hit by the effects of the current pandemic, but regional director Anne Lanigan says many countries are beginning to move into recovery phase and countries across the Eurozone are determined to get their industries and businesses moving again. There is a general acceptance in Europe that we need to learn to live, as safely as possible, with the virus. Construction and manufacturing industries are gearing up while observing social distancing and using personal protective equipment; digital technology and office based businesses are for the most part still working remotely but increasingly effectively and in a number of countries e.g. in France and the Netherlands some services like hairdressing have re-opened under strict guidelines.

    “The numbers speak for themselves in terms of infections and fatalities, but most countries have passed their peak and are moving into exiting confinement and reopening – all at slightly different stages,” she says. “But there is alot of similarity in terms of the timing of countries coming out of lockdown at this point and what this is really saying is that Europe is opening up again.”

    Lanigan says while we are inclined to look at when schools, shops, and social outlets open, what is really important to the restarting of economies is when industry is recommencing.

    “Whether or not you can get a haircut isn’t relevant to most of our clients, what is really vital is the restarting of construction and manufacture and the returning to work in businesses. Of course movement of people and products is crucial to this” she says. “Movement of product is definitely improving but movement of people, particularly across borders, is still an issue which of course affects our clients.

    “Each country is different and even regions within countries can be at different stages and have different restrictions, so it’s important to get up to date and accurate information from your partners, customers and logistics providers.  For example most countries will have a requirement to use face masks in certain circumstances, and social distancing rules will differ between countries. So don’t assume that the Irish rules will work – it’s important to know the specifics of the country you are working in.” Enterprise Ireland offices across the Eurozone can also help clients with this.” Irish companies with personnel on the ground in Europe are in a lot of cases eligible for state support from the country they are operating in and again our offices can offer advice and direction on this.

    Thankfully many Enterprise Ireland client companies have maintained business in the Eurozone throughout the crisis and some have won new business. However while some clients have continued to do business in a similar fashion to pre-Covid days, most will need to get used to new requirements and many may also need to diversify.

    “Our clients will need to be creative in adjusting to the new normal” says Lanigan. “Digitisation will form a large part of this. Localising (not just translating) websites is more important than ever – ensuring that websites are easily found, are easy to navigate and provide all the necessary information in a clear format. Social media is also getting a lot of traction at the moment, so making sure to be ‘out there’ in terms of social media, will help to raise a company’s profile.”

    “As countries open up, travel will continue to be restricted so if companies can digitise their maintenance and servicing by providing online videos or some kind of instruction online or via a webinar in a sophisticated and professional manner, this will help them to hold on to business. Online shopping functionality may also be an important capability to add for some businesses.

    Understanding how each country works is vital for Irish exporters, but the regional director says keeping in touch is even more important.

    “Communicating with customers is still crucial whether business has slowed, stopped or continued during the current crisis,” she advises. “The communication lines must be kept open – and ear-to-ear or ideally face-to-face on a virtual platform is much better than an email. So virtual meetings, webinars and virtual distributor forums will all help to maintain communication and build strong relationships.

    “This will keep businesses up to speed on what is happening in the markets and what is happening with their customers and so position them to adjust more quickly and in the right direction to maximise potential.

    In every crisis there is opportunity and the current pandemic is no different with several sectors set to do well out of the situation. Lanigan says “Every industry is now seeing digital transformation at an accelerated pace and there are opportunities for businesses who digitise fast and opportunities for businesses who offer digital and tech solutions.”

    “Our clients and Irish people are typically good at spotting opportunities,” says Lanigan. “I would encourage companies to look at how they can pivot in the current crisis – anything which reduces human contact and allows remote operations will have opportunities i.e. digitisation. 

    “Another area likely to surge is non-Covid related healthcare. In most countries routine treatments have been put on hold or much reduced in order to deal with Covid 19 cases. As things move back to normal, there is likely to be a big demand for other med tech and pharma products. Now is the time to prepare for that.”

    Lanigan advises companies to be look toward the future, reset and get ready for the recovery. “There is a danger that we just focus on the immediate – we are advising clients to also look at the medium to long term and get plans in place” she says. Future business may be a continuation of current business but with added value or an adjusted value proposition; it may be with a repurposed product pivoting to a different sector; it may be exploiting brand new opportunities created by Covid 19; or it may be replacing global products with ‘made in the eurozone’ products. “We are nearing the end of the stabilise phase and moving into reset but we need our eyes on the recovery – so be prepared, be aware and look forward. Enterprise Ireland’s team across the Eurozone are here to help you reset, recover and build your business.”

    Anne Lanigan is Enterprise Ireland’s Regional Director for Europe. To learn more about the steps companies can take to address the impact of Covid-19 visit our business supports page.

    Supporting great people in difficult times

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    Developing employee engagement now will pay dividends long into the future

    Up until the pandemic, the biggest challenge facing many firms was attracting and retaining talent. That hasn’t changed, says Ryan Williams, CEO of Conscia, a training provider which specialises in employee engagement.

    Conscia is the architect of a series of online modules designed to help companies maintain employee engagement throughout the Covid-19 crisis.

    Each provides practical steps to take, plus easy to use templates and frameworks, to help companies maintain their employee value proposition (EVP).

    Those that succeed in doing so will not only optimise productivity throughout this current, difficult time, but will be well placed to capture the opportunities of the post-pandemic surge.

    Those that neglect employee engagement, however, risk damaging their reputation as an employer of choice long into the future. “It’s about asking yourself, how you want your company to be remembered after this pandemic,” says Williams.

    Your EVP is an invaluable retention tool and should be robust enough to support employees in good times and in bad, he points out.

    “The market for talent will be equally as competitive when we come out the other side of this as it was when we went in,” says Williams.

    “Though some sectors will suffer more than others, the fact remains that if you needed a software developer before this, you will still need one after it, so it is important to get the best talent that is out there.”

    The top priority for employers right now is communication.

    By this stage new work practices will be established, either from home or, socially distanced, in the workplace.

    “The novelty of the early stages has well and truly worn off, the buzz of setting up meetings on MS Teams and Zoom has ebbed, and people are starting to feel this will never end. The risk is that employers stop communicating when in fact it is vital to over-communicate now and throughout this process.”

     

    Deliver your communications with confidence

    In a period characterised by uncertainty and anxiety, it’s important to display “honest confidence” he says.

    “Be honest and transparent and deliver your communications with confidence, even if it is bad news, such as, perhaps, having to take a pay cut to get through this. People can cope if they realise there is light at the end of the tunnel.”

    Empathetic leadership is essential.  “You need to communicate your company’s vision and mission with empathy. It’s about understanding that your people are going through challenging times.”

    Weekly ‘all hands’ meetings online are an opportunity to show that everybody is part of what is a communal effort.

    “Be very honest about what you do and don’t know. The rumour mill can be difficult to manage so share the good, the bad and the ugly with honest confidence.”

    Decision making in a time of crisis should be quick and decisive, with resources allocated speedily. Employee polls are a quick and effective tool for effecting change, offering maximum transparency and ‘buy in’.

    Regular, scheduled and consistent communications help keep fear and anxiety at bay. Use video as much as possible. “People want to see their leaders.”

    Be cognisant of the impact not just of your words, but of your tone and body language too. “Lean forward, be expressive, use your hands,” he says.

    As well as large town hall type, and team meetings, make sure to set aside time for one to ones, to check in with people and see how they are doing.

    Recognise and reward output. “Celebrate team wins and individual efforts more than in ordinary times. People are doing fantastic things right now so make time for shout outs in meetings and promote them on your social media too.”

    Fostering ‘water cooler’ moments online helps to replicate the everyday interaction of the traditional workplace. “Don’t lose your social cohesion.”

     

    Building trust and loyalty

    At every step, focus on building trust and loyalty. “Very many companies have spent years building up their culture. Don’t lose it. Find new ways of maintaining it instead.”

    Social distancing will likely continue for some time, as will working from home. “We are all living with uncertainty at present, so ‘What does this mean for me?’ is the key question people have. While you can’t control this, you can help by removing as much of the uncertainty for employees as possible.”

     

    Provide purpose and stay positive

    The current situation provides a great opportunity for learning and development. “This doesn’t have to cost you money,” he points out.

    “It could be online learning opportunities, or a situation where an experienced member of staff helps train up others on a new software tool, such as cucumber. It could be a buddy system, where someone experienced is matched with someone who may be feeling overwhelmed.”

    Spare capacity could be given over to executing planned projects that had previously been put off. “We have one client company, for example, who built an entire logistics platform in eight weeks, a project it had long wanted to do,” says Williams.  

    Such initiatives help provide purpose, an important component in employee engagement.

    Set short term goals for long term results. “Focus on bite sized projects to help people navigate through.”

    Finally, stay positive. “Remember, this is different from the financial crisis because it is the same for everybody. From Ireland to China to the US, the base line has lowered for everyone. So, while there is uncertainty, and a need to paint as honest a picture as possible, it’s also important to look to where the opportunities will be post-pandemic.”

     

    To find out more about building employee engagement during the Covid-19 restrictions see here.

    Market Watch Germany – Webinar – Enhance your digital presence for the German market

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    Enterprise Ireland’s offices in Germany have launched a series of Webinars: Market Watch Germany. Every Wednesday at 14:00 BST/15:00 CET a new theme will be addressed to help Irish companies exporting to Germany navigate the challenges and opportunities presented by Covid 19.

    The third webinar in the series; Website Optimisation: Enhance your digital presence for the German market, took place on Wednesday 29th April

    The team was joined by consultant Suzanne Dirks, Ed ​Kelly, Creative Director and Emmet Dunne, Managing Director of Digital Agency Kooba providing expertise on:

    • how to leverage your website in terms of layout and localisation

    • how to increase traffic to your website by creating an enhanced user experience

    Finally, Eoin O Siochru from Enterprise Ireland’s Internet Marketing Unit discussed the supports available to Enterprise Ireland client companies to drive these activities.

     

    jenny melia

    Support where it’s most needed for HPSUs

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    The innovation and dynamism of Enterprise Ireland-supported high potential start-up (HPSU) firms are vital to future economic growth, and it is absolutely essential that HPSUs that were progressing prior to Covid-19 receive the support they require to get through the Covid-19 crisis.

    “These firms and their founders are the future leaders of the economy and our focus is on ensuring that they have sufficient fuel in the tank and the right resources in place to get through the next three to six months and be ready to take advantage of the upturn when it comes,” says Enterprise Ireland Divisional Manager for HPSUs Jenny Melia.

    HPSUs do face particular challenges in the current environment, mainly due to their early stage of development. “Many of them are not yet revenue generating and are continuing to fundraise to drive business development,” Melia explains. “This can mean that they do not qualify for some of the Covid-19 supports available at the moment. It can also be the case that they haven’t been in business long enough to have built up a relationship with a bank.”

    According to Melia, the three main problems faced by these fast-growing firms relate to cash flow, investment, and talent retention.

    “In a lot of cases sales have just stopped,” she says. “They have no cash coming in from that source and that can turn into a double whammy if investors back off. There is a softening of sentiment in the investment community at the moment and that is presenting problems. Holding onto key skills is another real pain point for a lot of companies. We were nearly at full employment in the economy just a few weeks ago and they had to work very hard to get the right people. They are in danger of losing them now and these skills will be critical to support future growth.”

    Support is available to deal with these issues, however. In the first instance, Melia advises firms to avail of the Enterprise Ireland Covid-19 Business Financial Planning Grant scheme, with supports of up to €5,000 to help companies prepare financial plans with the assistance of an expert.

    “We are asking start-ups if they have assessed the impact of Covid-19 on their business and if they need assistance and financial support to do that,” she points out. “We are already seeing a great deal of interest in the scheme. This will help start-ups develop a stabilisation plan, which should look at resetting their business plan e.g. reducing the cost base and lengthening the financial runway to tide them through the next 3-6 months and prepare for the upturn including raising new investment.”

    The next step is to work with existing investors and shareholders. “Companies should discuss the possibility of bridging finance with their investors,” says Melia.

    “Enterprise Ireland is also willing to co-invest as part of this investment. That is a new departure for us. Typically, when we invest in a company it’s to fund a growth plan for the next two or three years. In this case, we are absolutely willing to play our part alongside existing funders and investors in ensuring HPSUs get through the current financial crunch. Companies should speak to their Development Advisor about this.” advises Melia.

    There is also the loan scheme from Microfinance Ireland. “This is open to start-ups with fewer than 10 employees, and the amount on offer has been increased from €25,000 to €50,000. The interest rate has been reduced to 4.5%, with a moratorium on interest and repayments for the first six months. I would encourage start-ups to look at the scheme to see if it is suitable for their needs.”

    The Covid-19 Wage Subsidy Scheme is a valuable source of assistance in helping to hold onto talent. “The scheme was initially aimed at firms suffering a reduction in turnover but, recognising the particular circumstances of start-ups, Revenue introduced another criterion, which was a downturn in the level of investment companies had projected. Some companies are not aware of this.”

    Enterprise Ireland is also organising a series of webinars to provide advice and support to HPSUs. “We have a number of former HPSU founders that have come through a number of recessions and downturns and have very valuable advice to offer.”

    Companies should also leverage the advice available through their own networks, she adds. “They should contact their Enterprise Ireland Development Advisor, their investors, business angels, suppliers and customers out in the market and so on. These are the things that entrepreneurs do anyway, and they are more important than ever now. We firmly believe that there will be opportunities out there for firms when the crisis ends, and our focus is on helping our clients to be ready for these opportunities when they arise.”

     

    Market Watch – How Covid-19 is impacting the Asia Pacific region

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    Just as it has affected every corner of the globe, Covid-19 has made its presence felt in the Asia Pacific region. But according to Enterprise Ireland’s regional director for Asia Pacific, Mary Kinnane, while there is no doubt that it has had a disruptive impact on economies, businesses and lives, the level and magnitude of the impact differs by country and even sector.

     

    • While countries have been impacted in different ways, there is no doubt that Covid-19 has disrupted business and lives across the region.
    • Providing solutions for clients and showing commitment is crucial for Irish exporters.
    • Many sectors have been badly hit but there are still signs of growth in a variety of areas including life sciences, health care and education solutions.
    • The region has shown resilience and is likely to be one of the first areas to emerge from Covid-19 restrictions.

     

    “China and South Korea were amongst the first countries hit by Covid-19, and life there is slowly but cautiously getting back to normal,” Kinnane says. “More and more businesses are now operating as before with public facilities reopening, while other countries in the region are still undergoing lockdowns and strong containment measures.

    “Adverse economic impact, at least for this year, is evident as seen from the revised GDP growth projections from the IMF earlier this month.  And the world economy is now projected to contract by -3% from the previous year, with growth projections for China at 1.2%, Japan at -5.2%, Korea at -1.2%, ASEAN 5 at -0.6%, and Australia at -6.7%.”

    Although Irish exporters will undoubtedly be affected, Kinnane say showing unwavering, commitment during these challenging times to customers and partners is particularly important.

    “Saving face is an important aspect of business culture in Asia so carefully managing the knock-on effects for your customers and partners is advisable,” she says. “If your business is adversely impacted by Covid-19 and consequently if you cannot fulfil orders, contracts or deadlines, then be clear with your customers and suppliers, but also try to provide alternative options and support. This will be perceived as a measure of your seriousness and commitment for the long term.

    Enterprise Ireland has made available new funding and capacity support programmes to help companies through Covid-19. says Kinnane.

    “We are acutely aware that our support is ever more critical so our network of offices from Beijing to Sydney are providing virtual introductions to buyers and partners, market research on trends and emerging opportunities and challenges along with other in-market business continuity and development supports.” says Kinnane

    “We also see that some Irish businesses are taking this time to develop market entry and expansion strategy for some Asian markets with a medium- to long-term view.  We are aiding those businesses to achieve the objective, using our market knowledge, insight and networks in local markets.  Customer targets in ANZ & the ASEAN region are proving quite receptive to remote new enquiries with this being somewhat more challenging in the north of the region where facetime and relationships really matter.”

    While travel restrictions have been problematic for tourism and many businesses have been heavily hit by uncertainty, the regional director says there is increasing attention on the life sciences/healthcare sector with more favourable government policies likely to underpin increased investment in the sector. Cloud based SaaS systems, teleworking tools, and paperless processes are also seeing an increasingly rapid roll-out with opportunities well suited to the innovative and agile solutions provided by many Irish businesses.

    In addition, various Asian companies have announced their intention to develop antibodies or vaccines to combat Covid-19, so Irish businesses with strong expertise in pharma servicing, regulatory consultation, clinical trials and supply chains are actively probing for new and enhanced opportunities in the region.

    “Many companies tended to take a conservative approach relative to their western peers to remote work, “says Kinnane. “But Covid-19 has prompted companies, particularly in China, South Korea and Japan, to re-assess the value of remote-working. And there is now more leniency and openness in corporate culture to embrace the practice with a more strategic and long-term view. Hence, it’s timely that Irish companies now look to the east to capture untapped opportunities. But they may need to be prepared to conduct business for a prolonged period under current conditions and be more creative and resourceful than ever in developing and maintaining customer intimacy.”

    The regional director says it’s projected to be one of the first regions to emerge from the Covid-19 challenge, with economies faring relatively well. So as economic and business activities begin returning to normal, it’s imperative for Irish businesses to provide best-in-class services and products to their existing and potential customers in order to exhibit commitment and capability to perform in times of crisis.

    “Companies are currently reviewing their supply chains so if there are prospective customers and partners that Irish businesses have wanted to work with, this can provide a context to approach or re-approach them,” she advises. 

    “The overarching message from APAC is that of a region demonstrating real resilience with economic fundamentals remaining strong, and the opportunities for world class Irish companies being very compelling.  Our teams, from Beijing to Sydney are fully operational, ensuring a continuity of service with clients and networks and have a range of business supports and funding options to support exporters.”

     

    Learn more about supports available to businesses impacted by Covid-19 at Enterprise Ireland’s business response.

     

    The funding landscape – surveying the options

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    Funding Landscape

    With entire business sectors forced to either cease trading completely or go into a period of near hibernation as a result of the Covid-19 pandemic, many companies are faced with a situation where income has slowed to a trickle while outgoings cannot be eliminated entirely if the business is to survive and emerge from the crisis intact.

     

    Look Inside the Business First

    These factors make a company’s state of readiness for access to funding, from all sources, critically important. When surveying the funding landscape, John Power, director of specialist financial advisory firm SGL, says the best place for companies to start is internally. That potential source encompasses existing debtors and customers who may be willing to pay in advance for a discount and also maximising terms with creditors which may include payments to Revenue.

    “Firms must still submit their returns on time, but Revenue is not going to apply penalties and interest for late payment,” says Power. “Revenue has really stepped up to the plate here. Companies should appreciate that flexibility and use it while they can.”

     

    Investigate State Support Schemes

    He also points to the range of supports on offer from the State, including the €450 million Covid-19 Working Capital Loan and €200 million Future Growth Loan schemes available through the Strategic Banking Corporation of Ireland (SBCI) and the €180 million Sustaining Enterprise Fund through Enterprise Ireland to help companies in the manufacturing and internationally traded services sectors to adapt their business models and return to viability. A Rescue and Restructuring Fund for worst-case scenarios is also available.

    “The SBCI Working Capital Loan Scheme offers loans of between €25,000 and €1.5 million over three years with a maximum interest rate of 4%,” says Power. “The funding is available on an interest-only basis for the first three months, and that will help companies get through the initial period of the crisis. Also, the first €500,000 is unsecured. That’s very important for service-based companies who may have limited assets to use as security.”

    Enterprise Ireland also has a new €5,000 Covid-19 Business Financial Planning Grant to help companies prepare financial plans for their internal needs and to better prepared to present a strong lending proposal to banks and the SBCI. There are also a number of strategic consultancy grants and other supports available to help companies maintain and enhance their competitiveness.

    Smaller companies also have other options. “Microfinance Ireland has stepped up with loans of up to €50,000 over three to five years at an interest rate now reduced to 4.5%, with no repayments required and no interest charged in the first six months,” says Power.

     

    Engage with your Bank

    Bank finance is, of course, an option worth pursuing but can be difficult to get in the current environment. “Banks look principally at two things,” Power explains. “Capacity to repay and security. And they need both before they will advance a loan. I hope that banks take a forward-looking view or else look back on 2019 performance when assessing companies’ ability to repay loans. If they just look at the first quarter of 2020, it will make things very difficult.”

     

    Credit Guarantee Scheme

    Companies which can demonstrate capacity to repay, but fall down on security, can always utilise the Credit Guarantee Scheme, he adds. Managed through the SBCI, the scheme guarantees 80% of the value of the loan in return for a half a percent premium on the interest rate. “This gives the banks the security they require in many cases,” says Power.

     

    Sustaining Enterprise Fund

    For companies that have been unable to raise finance through either the SBCI or the banks there is the Enterprise Ireland Sustaining Enterprise Fund. The purpose of the €180 million fund is to sustain companies which have been impacted by a 15% or greater reduction in actual or projected turnover or profit, or which have seen significant increase in costs as a result of the Covid-19 outbreak.

    In order to qualify, businesses must provide a Business Sustainment Plan outlining how the company will be stabilised and return to viability. Qualifying businesses will be offered a repayable advance of up to €800,000 to support the implementation of the plan.

    Very importantly, there is a three-year grace period on repayments. The advance must be repaid by the end of year five.

    “I am pleased to say that the new Sustaining Enterprise Fund is now open for businesses who are unable to raise adequate funding from the market,” says Enterprise Ireland CEO Julie Sinnamon. “My strong advice to companies is, if you haven’t already done so, to prepare an assessment of your financial requirements and progress funding applications to the banks and the Strategic Banking Corporation of Ireland (SBCI) immediately. Enterprise Ireland’s new Business Financial Planning grant will help companies to prepare a Business Sustainment Plan.”

    Other supports available through Enterprise Ireland include the new €2 million Covid-19 Online Retail Scheme which offers grants of up to €40,000 to retailers employing over 10 people to develop a more competitive online offer. Companies can also avail of the new €2,500 LEAN Business Continuity Voucher to help them access the expertise to identify the key measures needed to ensure continued operations.