Channel sales

Channelling Success with Channel Strategy

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Máire P. Walsh, SVP Digital Technologies at Enterprise Ireland’s Silicon Valley office, explains how an effective channel sales strategy can give Irish companies a wide international reach.

The business plans of start-up companies often focus on direct sales, aiming to sell as many products and solutions to as many consumers and end users as possible. The right channel sales strategy can, however, give Irish companies of all sizes and stages of maturity a wider reach, helping them to grow more quickly than a business plan that relies on direct sales alone. A successful channel strategy enables Irish exporters with unique technologies to harness sales opportunities at scale, driving business results in the US market and beyond.

Enterprise Ireland recently held a Sales and Channel Strategy Seminar in Dublin, which featured US industry thought leaders and senior executives, and was designed to advise and guide high performing Irish start-ups to expand into the US through the channel ecosystem. World-class experts on sales planning and channel strategy shared tips and success stories, while the event showcased a number of Irish companies that are already capitalising on the potential of the channel ecosystem to drive rapid growth.

Irish companies can apply insights shared by the event’s global speakers to use a smart channel sales strategy to quickly grow their business.

A “Best Practices in Channel” panel featured Kevin Morata, Global Channel Strategy at Dell EMC, Gerard Sheridan, Global OEM Sales Director at DataStax, and Kurt Hoppe, Global Head of Innovation at GM. The panel discussed how true collaboration is key to building successful relationships with channel partners. Companies should be aware that not all channel partners are created equal. With 20% of partners driving 80% of sales, Irish companies should allocate more time and resources to partners that will help to maximize business results. One tip for building trust is to feed leads to new channel partners at the beginning. That will allow them to gain experience in selling your product while developing a strong understanding of your value proposition.

Tiffany Wagner, Global Head of Sales Planning at SAP, described how a successful strategy must focus on your value proposition, rather than on the features and functions of your solution. At SAP, design thinking is key to well-orchestrated enterprise sales planning programs. All enterprise sales require a “3 x 3” influence model – three decision makers and three influencers must contribute to the process.

Insights were shared by Irish companies, including AltoCloud, Channel Mechanics and PlanNet21 Communications, that have scaled by partnering with the channel ecosystem. Kenneth Fox, Channel Mechanics CEO, described the three points of the channel triangle:  vendors, distributors and partners. The Channel Mechanics solution sits at the centre of the triangle, providing automation that runs the entire ecosystem.

Barry O’Sullivan, AltoCloud CEO, described how his company was formed with the channel in mind. Leveraging the business and personal relationships of partners has allowed AltoCloud to build a strong partner channel. One tip for Irish exporters is to have a ‘corporate vendor resources’ presence in the US and not attempt to drive it from Ireland.

When launching as an ambitious company almost 20 years ago, PlanNet21 Communications convinced partners to accept them into their channel program. The strategy has delivered revenues close to €50m, with the company on a mission to hit €100m within the next two years. Denise Tormey, co-founder of PlanNet21 Communications, described the strategy that drove their success, “Trust is hard won. We manage communication face-to-face, over the phone and by mail, to build those interpersonal relationships. We listen. We respond in a timely manner. We ask ‘Why?’ We care. We are true partners.”

The insight echoed the guidance of many of the day’s Irish and US speakers. A foundation of trust must be established to build effective relationships. Otherwise channel partner alliances are destined to fall flat and fail to deliver the growth promised. For channel strategy support, contact Enterprise Ireland’s Strategic Marketing Review program, which acts as a mechanism to review and develop your market development strategy overseas.

This article was originally published in the Sunday Independent.

Hanley Energy’s path to powering giants of the internet

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Innovative solutions and a partnership approach have been central to the success of Hanley Energy, a global innovator in energy and power management delivery.

Headquartered in Stamullen, Co. Meath, Hanley Energy was set up in 2009 by co-founders Dennis Nordon and Clive Gilmore. The pair started out in a Local Enterprise Office incubation centre and, thanks to decades of experience in designing and delivering turnkey solutions for Europe’s most power-intensive users, they quickly built up a portfolio of domestic clients, including CIÉ, Glanbia, Roadstone and Largo Foods.

“Initially all our work was with indigenous Irish companies, providing energy management solutions, in real time, for companies who wanted to see exactly what their energy usage was,” says Nordon.

While the company still operates across a range of sectors, from food production to pharmaceutical, transport and heavy manufacturing, in 2010 it began developing specialist power management solutions for the country’s burgeoning data centre sector.

Powering data centres – lynch pin of the digital world

Used to house the vast banks of computing power required to store, process and distribute an insatiable amount of data, these data centres are the lynch pin of the digital world and one for which continuous, clean energy supply is mission critical.

Hanley Energy developed a range of bespoke solutions to enable its Tier 1 data centre clients to maximise uptime and minimise operational costs. Because of the secrecy that surrounds data centres, it cannot name these clients but suffice to say, “they are the giants of the internet,” says Nordon.

In 2013, the company opened a new headquarters and manufacturing facility in Stamullen. Within 18 months it had doubled in size. Demand is such that in 2018 a further extension will see it expand its physical footprint by 50%.

Today Hanley Energy employs 57 people and has grown by providing clients with a one stop shop solution for energy products, software and service, from consultancy and advisory, to design, build & maintenance, as well as the complete life cycle management process.

“Essentially, we help our clients to reduce their overall energy costs, ensure 100% up-time and optimise their operational competitiveness,” says Nordon.

But it isn’t just technical know-how that accounts for Hanley Energy’s success. “While innovation is our unique selling proposition, a key driver of our growth is relationships,” he says.

“Our commercial tag line is ‘Trusted Energy Partner’ and that is our ethos. It’s by being a trusted partner that you can really add value for clients. It’s about building relationships and working with clients on a partnership model over the long term.”

It is this partnership approach that has helped them develop its significant overseas business, starting with an invitation from a client located in Ireland to deliver a cutting-edge solution to one of its overseas plants.

“They realised we are not some ordinary ‘me too’ vendor and asked us to look into a problem they were having in the United States,” explains Nordon.

“Hanley Energy is not simply a reseller or integrator but a developer of innovative technologies. We’ve been working with big data centres for long enough now that we understand the challenges they face. They are enormous power consumers with a mandate that requires them to keep that power on 24/7 365 days a year. For these clients, an outage simply cannot occur. We are tasked with keeping the power on and we create the solutions to do that,” says Nordon.

“We also provide the metrics that allow granularity as to how much power they are using and where they are using it. When you are using energy at this level, a percentage saving is colossal.”

Leveraging the overseas presence of multinational clients based here has enabled Hanley Energy to establish operations in Germany, Sweden, the US and Australia, with a further office planned for South Africa.

Once Hanley Energy has established a presence in each new market it then seeks out additional opportunities there, which require its skillset and expertise.

Resourcing global expansion

“Enterprise Ireland’s overseas offices have been a huge help to us in that, from providing us with initial office space, to making introductions and identifying opportunities,” he says.

Expanding into international markets can put a massive strain on resources. To avoid this Hanley Energy has implemented a Global Competence Centre model as part of its strategic growth plan, based at its Irish headquarters. 

“Our senior management and technical expertise resides in Ireland and all our research & development and new product development operations take place here,” says Nordon.

“Many of our products are IP (intellectual property) protected and have taken years to develop. So when we enter a new market, operating on a Global Competence Centre model allows us to parachute our expert personnel in wherever and whenever they are required, to train up the teams on the ground. This has helped us get up to speed quickly in each new market. It is a very effective way to scale and has been our strategic driver for growth.”

To learn more about expanding your business internationally visit Markets & Opportunities.

Local Enterprise heroes

Following in the footsteps of Local Enterprise heroes

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For many companies, becoming an Enterprise Ireland client is a significant step on a journey that started at a regional level. Local Enterprise Offices throughout Ireland provide supports, advice and training to start-up companies and existing micro-enterprises of up to ten employees. It is in this environment that experience is gained and vital lessons are learned which allow companies to prepare for growth and to take their ambition global.

A recipe for successful growth to €21 million annual turnover

It was in 1993 that a young man from Clonakilty got in touch with his Local Enterprise Office (LEO) in West Cork to ask if they could help him turn his business idea into a reality. Diarmuid O’Sullivan wanted to produce traditional churn-made yogurts. He knew how to make yogurts but he didn’t have enough funding to get the venture off the ground.

“I had the idea but not enough money,” Diarmuid recalls. “I heard there was funding available from the Local Enterprise Office, so I contacted them and put in an application. The maximum support they could provide at the time was £50,000 and the LEO in Clonakilty was able to help me put my ideas into a business plan to help secure funding.

“I also received quite a lot of mentoring and coaching. That was all done at concept stage – I hadn’t even identified a production site – but the support meant that I was able to get Irish Yogurts up and running by March 1994.”

Diarmuid’s yogurt-making idea was a recipe for success. His company grew quickly and its products were soon on the shelves of Irish food shops and supermarkets.

“In one of those early years, we grew by about 78.5%. That brought its own challenges, with regard to working capital. The Local Enterprise Office suggested that I move onto Enterprise Ireland, where there were financial supports for fast-growing companies which were creating jobs.

“We hadn’t really focused on exports, not at that stage. That came after we started working with Enterprise Ireland. Our first export customer in the UK was Tesco.”

This progress was recognised in 1998, when Irish Yogurts was named winner of Ireland’s first ever National Enterprise Award. In just a few years, it had gone from being a bright idea with insufficient funding to becoming an award-winning food producer.

Today, Irish Yogurts employs 160 people at its Clonakilty base and sells to every major supermarket chain in the UK and Ireland. Its annual turnover has grown from €300,000 to €21 million, with exports accounting for 30% of their business.

“We appreciate the input of the Local Enterprise Office and Enterprise Ireland, who supported us and our staff every step of the way,” Diarmuid says. “We still work with them and avail of supports and advice. Enterprise Ireland is very much a part of our team.”

A roll of honour

Irish Yogurts is one of hundreds of companies from every corner of Ireland that have transferred from Local Enterprise Office support to become Enterprise Ireland clients. Last year, 80 companies made the move. In 2016, the figure was 40. The roll of honour includes 10 other former winners of the National Enterprise Awards:

It is a track record that the Local Enterprise Offices are proud of. Oisín Geoghegan, chair of the network of Local Enterprise Offices, said, “It’s one of our targets to transfer companies to Enterprise Ireland – it’s progression. Companies which transfer into Enterprise Ireland are companies with growth ambitions to be exporting and creating jobs, which is incredibly important, particularly for the regions. So we would see it as an indicator of success when a company moves on to Enterprise Ireland.”

Local expertise supporting global ambition

Engineering services provider Obelisk engaged with their Local Enterprise Office in Cavan, even before they set up the company in 1996. Four years later, Obelisk won the National Enterprise Award.

Founder director Colm Murphy said, “We were looking to capitalise on the growth of mobile phone usage by offering installation services for operators. The people in our LEO understood the idea that opportunity was coming down the track. That gave us the confidence that our idea was good and could to grow into something big.

“They had an incubator office which we were able to rent and provided grant aid for early employees. They also provided us with advice about how to set up a company, and other supports such as training and mentoring – there was a lot more to it than financial support.”

The support has been paying off ever since, Colm says. “Last year we turned over €27 million. Employee numbers are between 250 and 300 people. We’ve expanded to include infrastructure solutions for fixed telecoms and the energy sector in Ireland, the UK, and South Africa.

“We want to continue growing. We’re looking for further investment. Over the next two to three years, we’re looking to hit the €100 million mark in sales. Exports are currently a third of our turnover but we expect that to become a 50/50 split.”

So what part did being able to access business expertise and support at a local level play in the company’s success? “Back in 1996-97, we would have found it difficult to kick-off from a zero base,” Colm explains. “We were just a couple of guys with an idea, and sometimes going for funding and that kind of stuff can be daunting. But when you get the kind of support that we did from the Local Enterprise Office, that’s a massive kick start.

“I would recommend that any company should be in touch with their Local Enterprise Office. They’ve always been good at describing the product set they have and how they support you. If you don’t ask, you don’t get and if you’re not engaging with them then you won’t necessarily be aware of new supports that are on offer.”

Reassurance and support

The view that “if you don’t ask then you won’t get” is shared by John Lynch, Chief Technology Officer of Acutrace. The Dublin tech company provides software and hardware which allows companies to control and monitor their energy usage. They count the likes of Google, Twitter and IBM among their customers.

Founded in 2015, Acutrace wasted no time in contacting their Local Enterprise Office in South Dublin. John says, “We reached out to the Local Enterprise Office immediately and they were brilliant. They gave us an employment grants and we managed to employ two engineers under that scheme. Within the first three months, we were exporting to London.

The company was growing quickly and the Local Enterprise Office was instrumental in steering Acutrace towards Enterprise Ireland’s High Potential Start-up (HPSU) programme.

John says, “Once we learned the criteria for the HPSU, we used that as our yardstick to reach for. We knew we had to have significant exports, we knew we had to have a scalable product that would generate employment and we needed to have the magic number of a turnover of €1 million, so it was a good objective to hit and we exceeded the target that year.

“By the end of 2016, we had turned over more than €1.5 million and we were exporting 40% of a product that was created in Ireland to the UK.”

The advice, professional support and reassurance they received has left a lasting impression on John and Acutrace.

He says, “I’m coming off the back of 20 years in the industry and so is my business partner Aidan, but it’s a little bit different when it’s your own enterprise – the risks are higher and there’s an isolation you feel, it can be profound. Then you engage with your Local Enterprise Office and you feel part of something, that you’re being protected or mentored.

“There’s funding and that’s important, but it’s also having that extra bit of confidence that there’s someone else behind you who has your back, that if you are going to create employment, well there’s someone there who’s grateful for that and they’re helping you, and they’re encouraging you.”

“You might be destined for Enterprise Ireland but until you hit that criteria the LEOs will mentor you and steer you in the right direction.”

Working hand in hand

That direction involves advice and supports, which evolve and change to meet the needs of encouraging start-up companies and other micro enterprises of ten or fewer employees, says Oisín Geoghegan.

“We provide a very broad range of supports – initial business advice, information and guidance, training and mentoring, and financial supports such as feasibility, priming or expansion grants. It can include money to employ people or towards marketing costs, business development, and so on.

“We also point entrepreneurs and companies in the direction of other supports that are available, such as the New Frontiers incubation programme and Innovation Vouchers from other agencies such as Failte Ireland, Intreo, Bord Bia and Microfinance Ireland.”

“For companies with strong growth ambitions, we work hand in hand with Enterprise Ireland on their journey and ensure that they make that contact at an appropriate stage so their development continues to be supported.”

Focus on Exports Helped Kirby Triple Turnover

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“We’ve achieved growth in three ways, through strengthening our capabilities, going deeper into our chosen sectors, and through geographic expansion.”

Jimmy Kirby, MD Kirby Group Engineering

Key Takeouts:

  • Kirby provides full mechanical and electrical engineering contracting services, as well as specialist voltage design and construction services to clients.
  • Has achieved growth in three ways, through strengthening capabilities, going deeper into chosen sectors and through geographic expansion.
  • Enterprise Ireland has supported Kirby to develop its international operations.

Case Study: Kirby

Developing export markets has helped Kirby treble its business in just seven years.

Founded in 1964, Kirby provides full mechanical and electrical engineering contracting services, as well as specialist high voltage (HV) and medium voltage (MV) design and construction services, to clients across several key sectors. These include data centre, life sciences, industrial manufacturing, commercial, petrochemical, and substations and renewables.

With the support of Enterprise Ireland, Kirby operates in a number of markets including the UK and Northern Europe.

Growing international operations

“In 2008, we began our first overseas work in the UK, initially focusing on the pharmaceutical, industrial manufacturing and power sectors,” says Jimmy Kirby. “Originally, we were invited in by one of our large multinational power sector customers to deliver projects for them; then we successfully expanded into the other sectors.”

Kirby has continued to develop and grow its international operations.

“Over the past seven years, we have almost tripled our turnover, from €58 million in 2010 to €167 million for 2017. To meet our growth targets, we increased employee numbers significantly. We currently directly employ over 700 people.”

Kirby has strengthened its management team too. “Earlier this year we announced a number of key appointments at senior level to support growth and success,” Jimmy Kirby says.

The company has recently announced further expansion in its international operations to include the new geographical area of the Nordics. “Expansion into the Nordics market is proving to be a successful development for us, having secured a data centre project and with more in the pipeline. We have the capability to execute projects in Ireland, UK, Sweden, Finland, Denmark, Netherlands and Belgium, and are currently developing the capability to execute projects in Norway, Germany, Switzerland and Luxembourg.”

Preparing for further growth

The business is poised for significant further growth. “Kirby has excellent future prospects due to the strength of our management team, our staff and associated capabilities, our strategy formulation and implementation capability, and our customer value proposition.”

The company has developed an in-house, integrated project execution process called the Kirby Way. “At the core of the Kirby Way is efficient and successful project delivery” explains Jimmy Kirby, Kirby Group Managing Director.

“It involves understanding our clients’ needs, collaboration, building high-performance teams and supporting our clients through every stage of the project,” 

Strengthening its systems and processes is helping too. “Lean practices, such as standardisation, have become important components of our project delivery, bringing significant value to us and our customers,” says Kirby.

Staff members have taken ownership of continuous improvement. “We operate an Innovation Suggestion Scheme with participation encouraged among all of our workforce. This approach allows us to encourage a culture of innovation and continuously generate innovative and lean ideas from our site and office employees. The suggestions are focused around introducing efficiencies into the business through cycle-time reduction.”

Recent project wins include Gemini Data Centre and Substation in Dublin and Kilgallioch Windfarm Substation in the UK. Kirby is currently working on a confidential data centre site in Sweden, a biopharma facility in Meath, and Wembley Park Energy Centre in the UK, among many others.

Three ways to achieve growth

“We have achieved growth in three ways, through strengthening our capabilities, going deeper into our chosen sectors, and through geographic expansion,” Kirby says. “To ensure that there is a continuous pipeline of projects, it is important to track the investment levels in our selected geographies and sectors.”

Working with Enterprise Ireland is helping. “Enterprise Ireland has supported Kirby to develop its international operations over the years in a number of ways. It has done so by providing market research support, local market information and advice on new markets, providing access to its global network of contacts, and hosting networking events and seminars – such as a construction seminar held in Stockholm recently.”

Jimmy Kirby personally participated on Enterprise Ireland’s International Selling Programme in 2010, and went on to do a Masters Degree in DIT afterwards. The company also availed of a Market Access Grant, “which was a valuable support in our internationalisation efforts,” says Kirby.

Learn more about Enterprise Ireland’s Competitiveness supports here.

Fuelling company growth AsiaPac

Fuelling your company’s growth in AsiaPac

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The size of Asia reflects the scale of the opportunity it presents to Irish businesses, delegates at Routes to Growth AsiaPac, a major conference held in Dublin’s Aviva Stadium, heard recently.

“Three of the four top economies of the world are in Asia. It accounts for half the world’s population and a growing middle class,” said Julie Sinnamon, chief executive of Enterprise Ireland, which organised the event.

“China, India and the ASEAN countries are showing more than double global growth rates, so they are not alone large markets but ones have massive growth within them. And ASEAN is one of the world’s largest economic zones, with a population greater than the EU and economic growth of double the EU’s.”

The AsiaPac region also includes Australia, remarkable for enjoying more than 25 years of continuous growth.

The region offers particular opportunities right now for Irish businesses in sectors such as aviation, financial services, international education and construction & engineering.

But there are challenges too.

“With Asia, you can’t go in, do a bit of business, and come home. You have to be really committed to the market. You need a balance sheet that can withstand the investment and you need an understanding of the culture,” she said.

There are logistical challenges related to distance, cost, lack of relationships and the need for a local presence. It’s not a homogenous block either. “Each of these countries has different culture that we need to recognise and appreciate. The Western mentality – believing we have the answer to your problem – doesn’t go down well in AsiaPac, you have to listen, and have patience.”

Be aware of distinct operational requirements in markets such as China, said MJ Guan, a partner at the China Ireland Growth Technology Fund.

It isn’t a question of simply translating your marketing materials but of doing first hand, on the ground market research for yourself. “Don’t just rely on third party agents,” he said.

Localisation requires much more than translation too, as companies such as Google and Uber have discovered. To assume that just because your business is successful in the Western world it will be successful in the AsiaPac region is a mistake.

Trip wires can include not finding out if you can get a direct licence to operate in your sector, and, if not, partnering with a local business. If you sell B2B get your “China Pricing” right. “In China we like to ask for a high discount from a vendor. If you don’t give a discount the customer may think you are not serious about the business,” he said.

Guan was at the event representing the second China Ireland Growth Technology Fund, which is newly launched. It aims to support Irish companies looking to access the Chinese market, as well as Chinese firms looking to use Ireland as a European base.

Announced in March 2018 by Ireland’s sovereign wealth fund, the Ireland Strategic Investment Fund (ISIF), and its Chinese equivalent, the CIC Capital Corporation (CIC Capital), the Euro 150 million fund is a successor to the now fully-invested China Ireland Technology Growth Fund launched in 2014.

That USD 100 million fund supported six Irish technology firms expanding into China, including Irish-founded Movidius, the global leader in machine vision technology that was subsequently acquired by Intel.

The new Fund will once again be co-managed by Dublin-based Atlantic Bridge and Beijing-based WestSummit Capital.

The sectors it is open to applications from are quite wide, said Elaine Coughlan, founding managing partner of Atlantic Bridge. They include agri-tech and med-tech, enterprise and consumer software, semi conductors and industry-4.0 “all the things China wants access to and wants to buy,” she said.

Even where a company is not ready for investment, the Fund can help applicants make contacts and start building crucial relationships.

“We look at thousands of companies on an annual basis and with a lot of them we say ‘You are not ready yet, here are some contacts, here are some relationships, do a little more work, a little more market research, and come back to us’” said Coughlan.

“It’s very rare we say ‘no, never’. We say ‘not now, come back to us’, and give them some pointers to think about in terms of execution. We’ve a portfolio now of companies – of CEOs, VPs (vice presidents) and BDs (business development executives) – who are in China and who can share that knowledge with other Irish companies.”

One company the Fund has already invested in is indoor positioning systems company Decawave, which currently has five people based in China.

“You need to get out there on the ground so use Enterprise Ireland and the Department of Foreign Affairs and all the resources open to you. There is always someone who can give you introductions,” said Paul Costigan, chief sales and marketing officer at Decawave.

Its technology is based around “really precise GPS that works indoors, with very many applications for robotics, drones, AI, automation and smart factories, all the areas that China is so far ahead in,” said Costigan. In fact, “China already accounts for 60% of our revenues and we haven’t even got going yet.”

Set the SatNav for France: Irish businesses guide the way

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Desk research is important but sometimes the best way to find out about a market is to get stuck in, delegates at Ambition France, an Enterprise Ireland event were told recently.

The suggestion came from Shane Lyons, export marketer at Ei Electronics. He was speaking as part of a panel discussion on the theme of ‘Starting the Journey, from first customer to sustainable business’.

Today, Lyons has decades of experience in the French market but his first posting made a deep impression, taking place soon after leaving college and securing a position with an Irish agricultural engineering firm.

“Within a couple of weeks of getting the job I was in a field in the middle of France demonstrating farm machinery – with no experience of either farm machinery or of agriculture in France,” he said.

Get on the ground in France

“My philosophy since then is to get on the ground straight away, meet the customer, find out how they buy and what they are interested in. Then develop a solution that suits them,” he said.

“Get out there yourself. Use Enterprise Ireland, use their contacts, get to exhibitions and get a sense of where the market is going to go.”

Ei Electronics, originally a subsidiary of General Electric, was set up as a general components maker in 1963. By the time it was bought out by its management in 1988 it specialised in smoke alarms which it sold into the UK.

It made its first foray into France in 2004, a time when fire alarms were still unregulated and largely unknown. “People had no interest. The most common reply we got was ‘Je ne fume pas’, I don’t smoke,” he said.

Ei Electronics set about creating awareness of fire safety in the home through lobbying, “convincing firemen it wasn’t going to put them out of business,” and setting up an industry association that would help it access professional installers.

“That kind of work wasn’t creating sales so, in parallel, we went to Enterprise Ireland to identify all the buyers of different retail groups. By getting out and meeting them we generated around €1 million euro worth of business in retail channels, while at the same time developing the professional channels and trying to create a bigger overall market.”

There was an additional hurdle too, in that France had its own fire alarm standard, which took two years for Ei Electronics to secure.

The hard work paid off and is still paying dividends today, in so far as Ei Electronics is currently going through the same process in relation to carbon monoxide alarms.

Given that France has 30 million homes, compared with Ireland’s 1.5 million, the potential it offers is enormous. “There are 400,000 new homes being built every year in France and Macron is pushing through legislation to speed up their construction. That will benefit Ei Electronics and everybody in this sector,” he said.

Choose the right channel to market

Because Ei Electronics started off selling to DIY retailers, when its real target was the professional installer, it had to create different channels to market, pricing and communications strategies.

“From day one we had to employ a public relations company to hone our message to each of these channels. That’s a step I’d recommend to anyone looking to get into this market, to help you translate your documentation and your brochures,” he said.

An ability to build and maintain relationships is key to success in France, added Clem Garvey, director and chief financial officer of Escher Group Holdings.

“In France’s culture, you create a customer relationship. You do not get the business solely on the basis of having the best price or the best product but also by having a relationship forged over many years.”

Garvey has extensive experience of winning major public and private tenders in France. “It’s a massive market,” he said, pointing to 36,000 companies in France with revenues of between Euro 10m and Euro 500,000m. “There are more HQs of Fortune 500 companies in Paris than in London or New York,” he said.

This represents a massive opportunity for Irish businesses.  “But because it’s big, it requires multi-channel distribution. You will not achieve all your objectives simply by going with one channel over time. You’ve got to have your fingers across the country through different areas. And, regionally, you will not necessarily sell using the same people in, say, the Alsace region as you will in La Rochelle.”

Winning major accounts in France requires a layered approach, consisting of “some degree of direct presence, a network of distributors or wholesalers, and ultimately some form of web or phone selling for very low spend customers,” he said.

“Yes you will have channel conflict but if you don’t have channel conflict, you’re not trying hard enough,” he said.

Margins can be tight but revenues can be grown by adding additional, billable, services outside of the tender terms.

Irish firms can have an advantage when it comes to bundling, especially if it involves the intervention of personnel, because employers’ social charges in Ireland are a fraction of what they are in France, he pointed out.

But if you don’t have a direct relationship with a client, “integrate your offer with someone else who does,” he said.

“Look around to see who has a direct relationship and see how you can integrate your offer with theirs. Joint ventures can be a great way to start.”

US flag - exporting to the US

Top 10 Tips for Exporting to The USA

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Ireland enjoys a unique advantage in trading with the US because of our deep historical links. Relations between the two governments are exceptional; and cooperation at an institutional level is excellent including in areas such as research, innovation and education.

There is, without doubt, huge opportunity in the US. Around 700 Enterprise Ireland client companies are exporting there and companies like Aerogen, Fenergo, Cylon Controls, Candidate Manager and Rubicoin have set up offices and accelerated exports in the past 24 months. To date, over 20 clients have won contracts worth over €500,000.

1. Preparation

Before entering the US market, extensive research at home is strongly advised. Make contact with State agencies, relevant support organisations and companies who currently export to the US, if possible. Targeting the US usually requires additional financial and human resources, so to keep costs and operations manageable in such as geographically big country, first-time entrants are advised to segment the market and target a particular region or state. Give careful consideration to the resources needed to serve the selected market, for instance, will the operation use a direct or indirect sales channel. Some companies hire locally and others (often in the early stages) put a C-level member of the team in the market for a short period to get things off the ground.

2. Legal

Corporate – Confirm your corporate structure. Typically setting up a US subsidiary makes sense both for tax and liability reasons. Your US subsidiary also will need to appoint a registered agent, and “qualify to do business” in every state in which you have an office or similar presence.

Intellectual Property – Address US trademark issues defensively (confirming that no one else has prior registered or unregistered rights in respect of name and key brands); and offensively (by filing a US trademark application). Patent issues may need addressed depending on the business.

Contractual Terms and Conditions – These must be converted to the laws of a US state, for legal and commercial reasons.

Employment – Get professional employment advice locally. Most US employees do not have employment contracts but employers are bound by offer-letter terms, employee manuals and other undertakings. Also, ensure confidentiality and IP assignment agreements with all employees are established.

3. Tax Structuring and Compliance

Establish appropriate arm’s-length arrangements between the Irish parent and US subsidiary to separate taxable income. This is particularly important because US corporate tax rates (federal and state), totalling about 40% are typically three times the level in Ireland. Have appropriate compliance procedures in place to address federal and state corporate income tax, as well as other potentially relevant tax regimes (sales tax, personal property tax, etc.), particularly at the state and local level.

4. Trends

US import trends indicate high potential for Irish exporters. Meat imports were valued at €9.4bn which was the second fastest-growing import; while dairy went up over 40% to €2.8 billion. The US also imports pharmaceuticals worth $86.1 billion; medical and technical equipment worth $78.3 billion and organic chemicals worth $52.1 billion. These are all among the top 10 Irish exports by category. It is also a big importer in sectors such as aviation and aerospace, mechanical and electronic equipment, insurance and ICT services – all of which are growing in Ireland.

5. Banking

It can be difficult for a non-US company to set up banking for its US subsidiary. Some banks are particularly focused on banking high-growth companies on a trans-Atlantic basis, which can help ease the process.

6. Immigration

Most Irish companies exporting to the US find it critical to establish a presence in the market. This is particularly true in software and high-tech. An estimated 65% of Irish exporters to the US have a full-time presence, ranging from a single-person sales office to manufacturing operations with thousands of employees. Route-to-market decisions are crucial and the role of agents and distributors cannot be ignored. Buyers rarely purchase directly from manufacturers, particularly those from overseas. So fulfilment centres have become increasingly important in the supply-chain, especially since the growth of e-business. This approach is better suited to non-perishable items and consumer products.

7. Insurance

The US is a high-risk environment. Get an insurance broker with trans-Atlantic experience to advise on types of cover, terms and limits.

8. Recruitment

The most difficult aspect of setting up in the US is finding the right people. Obtaining recommendations from trusted people including investors and advisors is often the best way. Otherwise get professional support (especially with sales people). Consider outsourcing for book-keeping, employee tax withholding, HR and mandatory employee insurance and benefits, and similar matters. Also note that visas permitting Irish personnel deployed in the US to work are needed. Allow three to four months to sort this out.

9. Offices

Get professional advice on office space and other properties such as co-working spaces (like WeWork), accommodation offices (like Regus) or renting an individual premises.

10. Incentives and Supports

US supports should not be overlooked. Federal, state and local development agencies and international chambers of commerce can provide very useful support. State and local incentives for investment and job creation also may be available.

 

Movidius

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“These connections are worth far more than any amount of money they can give you.”

David Maloney – CTO & Founder

Who

Movidius are a leading developer of high performance computer vision platforms with applications in drones, VR headsets and robotics.

How

Enterprise Ireland’s connections with universities enabled Movidius to access technologies that they needed, enabling their ability to expand to international markets.

Result

Movidius’s success in international markets led to the company being acquired by Intel in September 2016.

See How We Helped Movidius

How H&MV Engineering achieved high voltage growth in new markets

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“When you have access to that funding, it gives you comfort, as the alternative seems costly to explore a new region.”

– PJ Flanagan, CEO

Key Takeouts:

  • H&MV had grown steadily from a small electrical sub-contractor to high voltage specialist.
  • The Enterprise Ireland Market Access Grant helped them set up in new regions.
  • With a country by country, market by market approach, the focus is on the quality of the contracts and having the ability to be selective.

Case Study: H&MV Engineering

Headquartered in Limerick, high voltage solutions specialist H&MV Engineering (H&MV) has experienced rapid growth in recent years, breaking new ground in the UK and Norwegian markets. Enterprise Ireland has provided valued assistance to H&MV throughout this busy growth period.

“We specialise in grid connections”, says CEO PJ Flanagan. “If a high-energy user customer wants to connect to the power grid, they need H&MV to build a sub-station and connect them. We also work for distribution network operators (DNOs) and transmission network operators (TNOs). If a company is developing a data centre, the first thing they need is a grid connection. That’s what we do.”

The firm was founded in 1997 and Flanagan joined the following year as its first apprentice electrician. Growing steadily since 1997, the company has transitioned from a small electrical sub-contractor to a high voltage specialist, operating as principal contractor on major projects.

In 2015, Flanagan and his business partner John Stokes led a management buyout (MBO) of the company with the support of MML Growth Capital Partners. “MML is backed by Enterprise Ireland and AIB”, says Flanagan. “That was our first introduction to Enterprise Ireland. We had turnover of €7 million and 70 employees at that time. We now have 155 employees, turnover has grown to €33 million, and we have just announced our planned expansion. This expansion will result in H&MV doubling our workforce here in Limerick over the next five years. In the last two years, our design team alone has grown from 1 to 14.”

As part of the MBO process, Flanagan and the management team set out a long-term vision of how they wanted the company to develop. “Our ambition was to grow the company in the UK and across Europe”, he says.

“Enterprise Ireland’s market research supports have been very beneficial for us. When you have access to that funding, it gives you comfort, as the alternative seems costly to explore a new region. We have been very successful in the UK to date and anticipate UK turnover to reach £4 million in 2018.”

H&MV has also focused on the Norwegian market as part of its strategic growth. “Business in Norway is progressing for us now and we secured a €6 million contract outside Oslo last year. We have applied for another grant to assist in researching and validating the Dutch market.”

This country by country, market by market approach is a deliberate strategy. “We are looking for steady organic growth”, Flanagan points out. “We don’t chase numbers. We chase quality in terms of the contracts we work on and the clients we work for. We are very selective and we don’t take on just anybody. Our clients tend to be very large companies in industries like pharmaceuticals, utility provision, data centres and renewable energy. Many of our customers are state-owned.”

Growth ambitions are not limited to Europe. “I am travelling to South Africa in the near future to look at that market. We might explore the Far East as well. Advance research to ensure market viability is imperative.”

Enterprise Ireland support has played a key role in the company’s growth in recent years. “It has been massively important to us”, says Flanagan.

“Enterprise Ireland helped us make initial contact and build relationships in new regions. They are very helpful in terms of organising meetings and introductions. We have been able to use Enterprise Ireland’s overseas office network as well. Support from the organisation gives you great confidence. It can be lonely at first when you’re trying to break into a new market, so it’s great to have someone on the ground to give you support and help. I would encourage other companies to approach Enterprise Ireland if they have ambitions to expand into a new region.”

R&D lights the way to LED sales spike

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“Thanks to Enterprise Ireland’s RD&I grants, we do the knowledge-economy part in Ireland now. This has created jobs and been a great success for us.”

– Pat Kelly, Research, Development and Innovation Director, LED Group

 

Case Study: LED Group

Innovation in its ROBUS brand is a crucial driver of growth for the LED Group, a leading provider of LED lighting technologies, founded in 1984.

Its products, sold mainly via electrical wholesalers worldwide, offer energy savings, a long life and ease of maintenance. “Traditionally, customers put halogen fittings in their homes, but now there’s an array of LED products to choose from with far longer lifespans,” says marketing manager Deirdre Howard.

In 2014, the company set up a team focused exclusively on research, development and innovation (RD&I), underpinned by grants from Enterprise Ireland. This allowed it to win market share abroad and strategically exit manufacturing in China.

“When I came in as a research, development and innovation director in early 2014,” says Pat Kelly, “we had a relatively small share of the residential downlight market in Britain.” Kelly, who arrived at the company with a physics and engineering background, initiated a project that incorporated new state-of-the-art knowledge into a downlight: driver-on-board technology.

The grant funding allowed the company to test around 20 prototypes of the new technology before achieving a breakthrough.

“We introduced a product called Triumph Activate that substantially expanded our share of the market. It allowed us to tender in new areas because of its reliability, and its sales have put a significant amount of money on our topline too.”

KEY TAKEOUTS

  • Product reliability substantially increased market share and opened new areas for tender.
  • Adapting products for foreign markets created rapid growth and built brand perception.
  • Enterprise Ireland’s RD&I funding provided a safety net against risk and helped seed investment

When LED light fittings are powered by mains electricity, the current has to pass through a special electronic device called a driver. Often separate from the light fitting itself, this device is based on old capacitor technology and contains bulky components that must be soldered together. As a result, it’s often the first point of failure.

LED Group developed driver-on-board circuitry that can be included in the light itself. It’s essentially a pod that can be dropped into the light fitting, making the system much more efficient and reliable, improving its longevity, and requiring less power. All components are placed by machine, minimizing the potential for human error.

The company launched a version adapted for the Australian market; it only entered this market in 2010 but has already seen rapid growth there. “Introducing products such as Triumph Activate gets people talking and is a really positive force in building brand perception,” says Howard.

Another RD&I project saw the company convert one of its range of small fluorescent outdoor lights to LED, then move the technology to bigger lights for car parks and develop a patented retrofit capability for them. “We can retrofit not just our own fitting, but those of 16 other manufacturers,” points out Kelly.

LED Group is also part of LEDLUM, a European-funded project which aims to reduce the weight of the LED driver by 90 per cent and increase its lifetime. “This enables us to play senior hurling on the research stage,” quips Kelly. He hopes it will ultimately enable the company to offer a ten-year warranty on fittings by 2020.

Another ambitious goal that Enterprise Ireland’s RD&I funding supports is the development of ‘human-centric lighting’. This will bring outdoor light quality indoors, replicating natural light by tuning the blue content that our eyes use to set our body clock. “The lighting behaves as if it’s morning or afternoon,” explains Howard. “We hope to launch products in universities, schools and hospitals next year.”

Click here to learn more about Enterprise Ireland’s Innovation supports.

Enterprise Ireland companies with Global Ambition

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Attendees at Enterprise Ireland‘s International Markets Week heard from established Irish companies successfully selling globally and had the opportunity for meetings with Market Advisors, available to provide expertise on exporting to new markets.

If you are attending IMW please consider the following:

  • In which markets are you successful and how have you achieved this success?
  • What is your business/value proposition?
  • Why have you decided to target this new market?
  • What market validation have you carried out and what evidence do you have for a demand for your product / service?

Contact the International Markets team at International Markets Week for further information.

Czech Out Prospects

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Only two hours by direct flight from Dublin, the Czech Republic, with a population of 10.5 million, is probably best known for short breaks to its magical capital city Prague, Skoda cars, excellent beer and great tennis players.

But it is also an economy on an upward curve – and therefore opportunities for Irish business are on the rise.

Eurostat data on GDP and purchasing power shows the Prague region of the Czech Republic is the ninth most prosperous in the EU.

The region has attracted many multinational investors, mainly in automotive, engineering, electronics and IT. Industry now accounts for 47.3% of the commercial economy, making the Czech Republic the most industrialised country in the EU.

Opportunities for Irish companies

Multinationals and home-grown businesses are always looking for new suppliers and innovative solutions. Windows of opportunity are open for Irish manufacturers of technologies, engineered parts and materials, specialised plastics, material-handling products; and also for suppliers of logistics solutions or enterprise software.

Apart from industry, the booming tourism industry shows an appetite for travel software, while the market-research company BMI singles out the Czech Republic as the most attractive medical-devices market in Central and Eastern Europe.

The Czech Republic is a rewarding, reliable and innovative business-to-business market that can help Irish companies diversify sales.

They can meet potential customers from very different parts of the world that made the Czech Republic their base, especially industrial conglomerates from Japan, South Korea and, increasingly, China.

No wonder that a number of Irish companies, including household names such as Kingspan, Smurfit Kappa, Mergon International, ICON, Grafton Recruitment and PM Group, have established operations in this market.

Many firms also use the Czech Republic as a gateway for sales in Central and Eastern Europe, a market of 110-plus million consumers.

Since joining the EU in 2004, Irish exports to Central Europe have grown over 300%. Getting involved in the Czech Republic requires strong local knowledge. It’s absolutely crucial to dedicate time to researching your customers’ needs, assessing alternatives and properly formulating your offer.

Ireland is very popular here – in many aspects it is a role model – but this goodwill does not mean you can skip your homework.

Advice for doing business in the Czech Republic

Czechs are quite pragmatic, focused on results and technical competence. However, personal relationships and mutual trust are critical. Face-to-face meetings go straight to the point and place facts before sentiment.

It is important to follow up on meetings and deliver on promises. Similar to other central European countries, Czech businesspeople are cautious and don’t believe it until they see it.

Although sticky points are discussed at meetings, people like to have things confirmed in writing and accompanied with sufficient evidence to back up claims. If we are to believe the research of British communication guru Richard D Lewis, Czech and Irish business cultures and negotiation styles are very similar.

Business meetings are invariably conducted in English, which is taught in schools.

Czechs are proud of their country and what they achieved since the fall of communism in 1989. According to The Economist Intelligence Unit’s 2013 ‘Where to be Born’ index, the Czech Republic has the highest quality of life among new EU member states and ranks 28th globally.

Judging from packed Aer Lingus and Ryanair planes heading from Dublin to Prague, an ever increasing number of Irish people are becoming familiar with Czechs’ attitude to the work-life balance – and socialising is an important part of all relationships. Unsurprisingly, this is not a barrier for Irish business visitors.