Home-grown business success stories tend to reveal individuals with the ability to adapt to a changing environment as much as those with an eye for the bottom line. Ulster Business found that Ashley McKinley and Jim Hodges, founders of Nichem Group, prove no different, having steered their business toward growing markets. We hear more about the Belfast-based company…

Having your own swimming pool is a luxury many of us would love but few feel we can afford. But local company Nichem Group, through its subsidiary Nichem Pools and Leisure, is proving the private pool is more popular than ever in Northern Ireland and more affordable than you’d think.

The fact the business has put in a bumper performance against the current recessionary backdrop says a lot, both about the passion and hard work of Nichem’s personnel and the affordability of some the company’s pools.

This latter factor doesn’t mean a concession on quality. In fact, the use of Italian pool manufacturer Proteus’s technology means Nichem can offer an unparalleled level of integrity – in terms of the pool’s construction – and a number of standard features which would be additional costs using other build methods.

As opposed to the traditional tile construction, the Proteus pool is made from stainless steel panels or, in some cases, a single stainless steel shell. Advantages include a much faster installation process, a 15-year warranty, less maintenance, the ability to create more complex shapes and overlapping infinity edges. It’s with such attributes that Proteus has been awarded a contract to supply seven of the 12 pools for the 2012 Olympics.

Installation for outdoor pools starts from £15,000 while indoor packages begin at £35,000, but the canny pool buyer knows that running costs are as important as the initial outlay. It’s for this reason Nichem can carry out an energy management survey to keep electricity usage to a minimum while also incorporating a number of green features, such as highly efficient insulation, renewable energy water heating and water recycling.

“We have surprised a lot of people with the figures,” said Commercial Director Ashley McKinley in an interview with Ulster Business at the company’s headquarters in the Castlereagh Hills. “It’s not as expensive as you’d think to run and needn’t be considered a luxury.”

Not that the pools don’t feel like luxury as anyone visiting Nichem’s show pool at the Mill Village development in Comber will testify. The facility here is the Gold Proteus pool package and includes a spa, sauna and gym and shows off Nichem’s attention to detail.

“Who else in Northern Ireland has a show pool they can take potential customers to?” said Operations Director Jim Hodges.
With most competitors based outside Northern Ireland, the local presence is particularly important to Nichem and helps maintain a high level of customer service, a fact reflected in the large number of word-of-mouth referrals the company receives.

Added to this are the ancillary benefits gained from building a swimming pool in a home, not least of which is the fact it will add value but also the fact a pool can be a social hub for all the family.

“Family values are changing for the better,” Ashley said. “It’s not about the rat race any more but is about sharing time with your family and a pool provides the ideal place to enjoy being together.”

As a result, Nichem’s customers range from young families to retired couples who want to provide a place of enjoyment for their children and grand children, to ‘swimming fanatics’ who realise owning a pool isn’t out of reach.

Adapting to change
While riding this wave of popularity in the leisure industry has paid dividends, the company hasn’t rested on its laurels and has continued its trend of diversification. For a company which started out trading in chemicals, the move into swimming pools may seem a big jump but made sense given Ashley and Jim were providing chlorine to local pools.

And so it is with the company’s other subsidiaries, one of which, TrainDirect, identified a need in the fitness and beauty markets for fast track accredited training courses.

Started in 1998, TrainDirect offers a comprehensive range of courses which lead to nationally recognised qualifications, the majority of which are approved by the Qualifications Curriculum Authority and/or are accredited in the National Framework of Qualifications. Awarding bodies include Oxford, Cambridge and RSA, Vocational Training Charitable Trust, Central YMCA Qualifications and City and Guilds.

The secret of the company’s success in this area is the intensity of its courses. A fitness instructor or beauty course which would take a year at a college can be compounded into two weeks at TrainDirect but both result in the same qualification.

“It’s a fast track career option that results in an almost guaranteed job,” said Ashley.

Training needs
Another subsidiary identified a need for a portable multi-sports stadium aimed at children and with the help of InvestNI has taken to market.

Sportstada consists of a 10-by-five metre structure made up of interlocking plastic panels and can come complete with safety surround nets, viewing steps and flood lights. It allows children to play everything from football to netball to cricket in a safe environment yet is completely mobile, making it perfect for sports clubs and leisure centres.

“Sport will change a child’s life for the better,” said Ashley. “Children who play team sport learn so many lessons to help them in later life. We see this product making a difference.”

Ashley and Jim have showcased the Sportstada at Manchester United’s ground Old Trafford and have already secured a number of orders while also fielding enquiries from throughout the UK and further afield. As recently as March the two even pitched the item on national television on the Dragons’ Den Sports Relief special and, although not managing to secure investment, came away with excellent exposure for the product and sound advice. Future developments for Sportada include a roof dome and the possibility of changing the stadium into Icestada for ice hockey.

So with a number of differing, yet closely linked products under the Nichem Group’s umbrella, it looks like the company will continue to make waves in future while adapting to the changing business environment.

One of the most exciting and vibrant industries in Northern Ireland is undoubtedly the ICT market. Apart from the growing presence of some of the world’s biggest ICT companies on these shores, we’ve also managed to foster an environment where our home-grown creative ICT talent can blossom.

But no matter how progressive we feel we are, we can always do better and for that reason Tughans and Ulster Business brought together some of the key players in the industry over a cup of coffee to tackle the big issues facing our youngest sector. There were innovative ideas, there were controversies and there was even the odd joke. What follows is an edited version of the morning’s debate.

David Elliott: How healthy is the Northern Ireland ICT market and where do we sit compared to the rest of the world?

Michael Orr: From a PwC perspective, we are consultants to IT so clients ask us for help. Public sector would come to us for technical advice and the local ability to supply large scale and small businesses can be serviced from NI and serviced well. I think Meridio is a good example of a data management solution developed on local shoulders which government has bought. But in some respects we in Northern Ireland don’t sell ourselves particularly well as small IT businesses.

Dennis Murphy: I think there are some really hopeful signs. We have world class early-stage infrastructure to support our new commercial market and that includes the work that Steve Orr (from Northern Ireland Science Park) is doing with NISP Connect. Steve came home from San Diego and implemented a model here which has been a huge influence. The other key is Alan Watts (Director of halo at NISP) who has made our halo network here world class. That, combined with Invest NI support, gives very powerful early stage support for entrepreneurs and the amount of companies that are getting funded through that process is very positive. But the reality is that it is going to take a while for those companies to come through the development process. We have unbeatable government support for the venture capital industry and the early stage infrastructure that has been put in place – along with Invest NI getting funder funds in place – will really support the development of early stage companies here and lead to the transformation of the industry.

Colin Walsh: I would say we have to be realistic; we can’t be good at everything. We are a very small piece of territory and should leverage where we are strong and not try to, as the Americans would say, “swing at every ball that comes at us.” But in NI we do have particular strengths. At Crescent Capital we would tend to see people who have a belief they can leverage what they have got onto the international market. So we wind up by default investing in businesses that take that opportunity on. Typically, companies we back have 10, 20 or 30 people in them; they have a niche where they have already established some credentials. They’ve maybe got £0.5 million or £1 million of sales and have a shot in turning that into a £10 million company. We try and pick through, eliminate the ones where we think the management are not going to cut it or where they don’t really have any competitive advantage to achieve that objective, and back the ones that we think that can.

Nic Stirk: If you look at the NI ICT market it is not great and the primary reason for that is because the dominant industry in NI is in IT services. I think the opportunity is around export and it is around the strong technologies that have been developed. There are lots of good pockets of intelligence and clusters of real expertise in strong technology companies. The market is export as far as SLA Mobile (SLA Mobile exports 100% of its business) is concerned. Indeed, we see the market place as global. The second part of the question in terms of how do we sit compared to the rest of the world? Again, I don’t think we sit well compared to the likes of the Chinese.

Ian Coulter: Two positives and two negatives. First positive is early stage support has never been better. We need to get that message out to more people who are thinking about doing business in NI. Second, we see the contracts that come through so we see the actual output. We now see contracts in the UK and internationally as the norm not the exception. There’s a much more outward focus. The two negatives are we still don’t co-ordinate enough. Actually our greatest weakness could also be our greatest strength in that we are quite small so we should be quite agile. Between us around this table we can put 100 people down on a piece of paper that need to be involved in something like this. That said, we need to focus on selling NI as a Technology Centre of Excellence. I don’t think there’s enough collective co-ordinated thought toward developing that. The second negative is that we see some super ideas but they get to a certain size and then hit a glass ceiling. We have to try and think how we break through that ceiling.

Brian Baird: Most of the people who work in the ICT market in the private sector are working in some sort of support for public sector contracts and that has been good for the sector since the early 90s. In the early 90s, government stopped doing things for themselves and started outsourcing to the private sector. Ever since then there has been confidence building up in system integration companies such as Fujitsu, Capita and HP and they have employed some of the best talent in the province. I think the future is in innovation and using top technology to understand the rest of the market that’s available and get new products in play. It takes a small, concentrated and well-networked community to do that.

Greg McDaid: Fujitsu is the third largest ICT company in the world so there are 180,000 of us spread over each of the continents around the world. You can basically consider Fujitsu as a company in two parts. There is a part of the company that manufactures and makes things, innovates and does research and development. The other part of the company runs things that other people have built. Essentially, outside Japan there isn’t an awful lot of the first part of the company, the company that builds things. They spend $1.1 billion per annum on research and development and practically none of that is spent outside of Japan. To put it bluntly, NI is subscale for us and to put any of that R&D here, well, it is just not going to happen. There isn’t sufficient scale to do that. If you take the question of the world market, well we are not competing in a world market because we are essentially supplying support in eight hour chunks. Eight hours when its in the Middle East, eight hours when it’s in Europe and eight hours when it is in North America. Our competitors are not local, it is not the sub-continent, it’s not the far east, but is actually Poland, its Portugal, its South Africa and in that respect NI can hold its own extremely well. Our difficulty comes from the fact that in our services business we speak one language and one language only. Provided your customer’s predominant language is English, NI can do well.

Adrian O’Connell: The innovation that is coming through has come on leaps and bounds in my view and what I am dealing with now in terms of capturing contracts is much more exciting. However, that is only one side of the equation, the other side is actually translating that innovation into sales and that is where I feel the problems still lie. There is an inherent lack of confidence and also that vital skill set seems to be missing. I just can’t see the talent coming through.

Sean Nelson: We deal in the University with technology that is at a very early stage. I know people talk about taking these projects global but we have to teach that. We need to get projects we can validate and I believe there is a group of people, entrepreneurial people who will take them to the market. The one misperception I believe is to take academics’ great ideas and build businesses with them. That doesn’t work, academics are academics. They are researchers, they like studying but they don’t like the risk. There has been a great progression in terms of the available support but what we need to be doing is to find those good ideas and support them at a very early stage in their lives. The university academia needs to realise what they’re good at and what they’re not. It is a very difficult, dirty task to get a small company in technology moving to convince investors to part with a cheque.

DE – Are Northern Ireland’s technology companies too dependent on public sector business?

MO: From our perspective, the large technology companies in NI and the technology consultancy companies do service the public sector more than the private sector. But looking at demand going forward, we’re probably not too dependent on the public sector. There’s a certain amount the government will spend on technology and that figure will probably stay the same. It’s not a growing market and NI’s technology companies are concerned about that. Over the last six months of the year there has been a slow down on the big projects as the funding issue hits. So I think yes, there is a dependency but we have lessened that dependency simply because the markets in the public sector isn’t going to grow. I have a big practice and I need to make sure that our guys are learning but I also need to make sure we are a technology centre of excellence. As a result of all the tech work we’ve done I’ve been able export that into the UK, Middle Eastern and European markets where the demand currently is.

DM: Yes I think we are absolutely too dependant on the public sector. A large part of that business is going away so in the future we have to develop new client confidence. It hasn’t been a bad thing to have had a lot of concentration on the public sector as it was giving huge employment, I think to around 800 people, that’s an amazing number. But we definitely have to change our whole strategy around the public sector in the future; its going to be for a very much smaller part of the sector.

CW: We see less dependency on the local public sector as some businesses are selling to public sectors abroad. My experience has been that it is a credibility issue for small companies here to sell to public sector. But in the public sector decisions may take longer and that doesn’t sit well with venture capital backing where you want the clock to go faster. We tend to back businesses that are going after sales to the private sector where the gestation period is shorter. If 5% of the sales in the Crescent Capital portfolio happens in the UK then maybe one or two per cent of that is public sector.

BB: Technology centres in NI have in the past been driven by public sector accounts and therefore NI has got a lot to be grateful for. It has brought some talents into the NI sector which are world class, mainly around solution architecture. We have a massive amount of talent and some organisations have benefitted up as a result of the public sector here.

GMcD: One thing about the public sector is that its highs are never so high and its lows are never so low, so it does provide a stabilising effect on our economy. But sometimes I don’t think we are necessarily as grateful for that as we should be. It provides an anchor for businesses such as ours. It gives you the platform for which to do the other things so I don’t know we could run a business such as ours well without it.

DE: What other growth areas are there for ICT companies in the private sector?

DM: Look where venture capital is going; it’s going to areas like Clean Tec, Connected Health etc. We can’t be good at everything so I would really like to see end-to-end strategies put in place. If you look at the Clean Tec space in Germany, 10 years ago they created all sorts of incentives to change policies and today 80% of the world of Clean Tec exports come out of Germany. We can definitely make a big difference if we co-ordinate.

IC: To grow an IT business you need the talent and you need the money; in the IT sector in Northern Ireland we have got the talent but maybe not the money. Once you take your companies to a certain stage and try and break through the ceiling, it’s like pulling teeth. We need to find a way to get serious investment and that stage.

BB: Most technology companies identify a gap in the market and want to exploit the market in that window of opportunity before the gap closes. Most of the companies I have worked with or looked at understand that gap reasonably well and none of them have got the money to exploit it in that timescale.

IC: If we could get a mechanism whereby an investor puts money into a private limited company in Northern Ireland and capital gains tax is only 5% or zero then we’ll begin to attract real investment. We’ve got to get the money over here and until we do that we are only going to reach a certain level no matter how good the talent is.

CW: I fundamentally disagree with the Ian’s contention about the lack of capital. I have been involved in backing two dozen businesses here and I started off in a previous life in a venture fund in the UK. In that time I haven’t come across a business yet where the team was good enough and the proposition was good enough but they couldn’t get the money. Mobile money sitting will come and will back good teams if the proposition is good enough. I have been involved in taking two companies to the market and you know the investors in the stock market will put money in for relatively modest returns, again if the proposition and the team is good enough. There is no glass ceiling.

GMcD: Government can probably stimulate the SME market by making those large companies tell them how much they spend locally. If they actually started to score procurements, the amount of money spent locally will jump much quicker than any amount of investment on R&D and speculation.

NS: At the moment the government is all about social engineering and it is all about generating jobs (rather than wealth) so there is a disconnect there.

GMcD: What they do is they confuse the outcome from the two. Wealth generation does create employment and it can actually create a sustainable sector that will generate employment for generations. Employment generation through multinationals generates short-term employment. We provide employment but the profit is taken somewhere else whereas you guys create wealth within this economy which then creates employment which in turn creates further wealth. We perform two quite different functions here and we need folks in Stormont to start to recognise the difference and start to use the levers they have to incentivise the large multinationals.

NS: But it’s the big boys that will get an investment for jobs, who will poach my engineers.

GMcD: The amount of subvention in the employment market by the public sector either directly or indirectly is alarming. Pay in the public sector today is on average 20% higher than in the private sector in Northern Ireland and then we wonder why people become doctors, solicitors, lawyers, judges and whatever.

DM: I think there is a point here that we are all missing. Northern Irish executives are hugely successful around the world and we have to bring those guys home. We have to create a kinds of entrepreurial culture here.

NS: We also need to encourage them to market their roots. There’s a lot of goodwill out there to NI and if we could harness it and bring it all together it would be quite a force.

MO: Is there not a question asked why? Why haven’t these ex-pats capitalised on their roots? Perhaps they’ve looked at it but it’s a struggle commercially.

DE: Do we have enough skilled labour in NI?

DM: There are key deficiencies in sales.

CW: We have to be a bit cute in trying to get talent into business. Sometimes you can capture someone like the engineering and product people from other larger multi-nationals that have an operation here. The sales thing is a particular challenge and we tend to look to the NI ex pats which have gone away and have learned those skills somewhere else because there is not that many large business here that have really strong selling hubs. Some of the best sales talent that I see in some local companies are returners. But it’s a bespoke one-at-a-time activity as opposed to trying a programme to bring them all.

BB: There is some incredible talent inside Fujitsu, Northgate etc. If those people were actually harnessed into heavy wealth generating companies who were going for it in the international market there is enough talent in NI to cover that stage. My view is that if we could create an attitude change and get great talent that does gravitate towards high wealth generation then we would transform the NI IT industry overnight.

CW: What you are describing is maybe where are all in agreement. If well-funded, indigenous businesses with legs were able to offer well paid propositions we can draw some of that talent across.

A growing population means the impending need for improved and more efficient infrastructure. Economist John Simpson takes a look at ‘Infrastructure for an island population of 8 million’, a report backed by InterTradeIreland, which looks at how our infrastructure will need to develop over the next 20 years.

The Irish Academy of Engineering and Engineers Ireland have published a well informed professional assessment of the civil engineering needs of the island of Ireland in the next 20 years. This perspective is both useful and challenging. From this foundation, the next steps should fall to both Governments.

Today’s social and economic planners need to be reminded of the nearly inevitable consequences of an increasing population, the demands which come with higher living standards and the particular implications of all-island personal and commercial mobility and, in addition, the changing implications of climate change.

There is no surprise when engineers conclude that engineers should be asked to do bigger and better feats of engineering. That type of statement is a natural consequence of the ambitions of a group of modern highly-skilled professionals.
A review of the ambitions of the Irish Academy does suggest, as a caveat, that the ambition to have the best engineering solutions must be qualified with a distinction that optimal solutions are not always the most advanced or the most expensive. The engineers acknowledge the need for an ability to engage in economic appraisal as part of their training, alongside the requirements of environmental impact assessments.

The report makes two critical and fairly non-controversial demographic assumptions. First the population on this island will reach eight million in about 20 year’s time. Second, the patterns of living and working will mean that about 90% of the population will live within the commuting catchment of eight city regions based on Belfast, Derry/Londonderry, Sligo, Galway, Limerick, Cork, Waterford and Dublin.

The influence of the increased urbanisation of the population also translates into an even stronger role for the Belfast-Dublin corridor which, by 2030, will have a population of four million people and create its own infrastructure investment needs, including specific plans for subsidiary centres along this corridor.

The engineers explore the infrastructure needs of the island with particular emphasis on transport, energy and the environment. With about half the population of the island all in the eastern corridor, it is hardly surprising that the particular demands for roads, railways, water distribution and airport development loom large.

The report accepts the merits of economic assessments of proposals but does not offer any macro-economic judgements on how governments and public authorities should prioritise the investment programmes. From a Northern Ireland perspective, the Editorial Taskforce included senior staff from the Strategic Investment Board but no other officials currently in office.
High in the conclusions reached on different topics, the Taskforce recommended:

• Major upgrading of the Belfast-Dublin high speed rail link.
• Further investment, including four lane capacity, for the Belfast-Dublin motorway.
• An extensive water mains network linking the Shannon and Lough Neagh to Dublin and Belfast.
• High speed large capacity information highway linking all eight city regions, including fibre connections to homes.

One of the logical conclusions from the analysis is that demand for an adequate range of international airline services will develop at only one large airport and that will be expected to put pressure on Dublin airport. However, the engineers do add that the international airline hub at Dublin could be complemented by expansion at Belfast International Airport.
Reflecting the longer-term implications of climate change and the risks of adverse weather and changing sea levels, the Engineers have studied in detail the needs for major flood defence investment, particularly around the estuaries for the main ports. This shows that large areas in Belfast, Cork and Dublin must prepare defences against storm surges. For Dublin this includes a possible tidal barrier across Dublin bay.

Green policy issues prompt the engineers to offer ideas on extending the number of wind farms and associated investment in a more accessible grid. The suggestion that there should be a storage plan for 20% of the annual use of natural gas is consistent with the recent proposal by Islandmagee Storage for capacity on this scale near to Ballylumford.
In a further push to make the energy sector ‘greener’, the report commends the building of appropriately sized waste-to-energy plants strategically located in each of the city regions. The Belfast proposal, in 2009, was not accepted by the city council. This question is not so easily forgotten.

The engineers do not develop funding solutions to the capital required for the infrastructure programmes. They believe that innovative financing will be needed to top up the conventional financing in Government budgets.

One suggestion is that both governments might co-operate in setting up an infrastructure bank to provide long-term funding for infrastructure projects. This bank might draw funds from pension funds and the European Investment Bank.

The concept of an infrastructure bank is superficially attractive but would be difficult to implement, particularly with cross-border jurisdiction and dealing with two Governments and two currency regimes. Nevertheless, the aspiration that infrastructure plans might draw on a wider range of sources is both useful and necessary. A major effort to divorce capital projects that can generate their own revenue streams from conventional public sector funds will be needed.

Much of the investment in water and energy services can be sourced from the private sector, if governments restructure these utilities. Similarly, railway investment and motorway developments can be linked to revenue earning baselines. Some projects might lend themselves to public, private partnership, or PPP, funding arrangements.

Nevertheless, there is little doubt that, even with the use of innovative and alternative sources of funding, financing infrastructure programmes will be a critical constraint. The engineers argue, logically, that if this island is to be a competitive location for international business then the infrastructure programme is not an optional extra: it is a necessary condition.

Making an international comparison, the engineers conclude: “There is clear evidence that there is at present an infrastructural deficit on the island.”

Are the government ministers persuaded?
The Engineers have brought together impressive evidence of key infrastructure needs. Without taking away from the value of this exercise, it should be pointed out that this expensive catalogue is before any additions are made to allow for construction needed for housing, education and health.

The next stage for Northern Ireland should be a reformulated strategic investment programme developed in an improved operational format to help the Northern Ireland Executive prepare a more coherent 5-10 year perspective.

Small and medium sized companies are the lifeblood of Northern Ireland industry, so it stands to reason the health of this sector will give an indication of how the rest of the economy is performing. Symon Ross hears how four companies are coping in the post-recessionary period.

Very few businesses, large or small, have completely avoided the effects of the recession.

But while many of Northern Ireland’s biggest firms have announced huge cuts to staff levels and production, it has been in the SME sector where the changing dynamics of the economy have often been most acutely felt.
While the wider economy is now showing signs of life, the Federation of Small Business’s policy chair Wilfred Mitchell notes that for many small firms, recovery from such a prolonged downturn will not happen overnight.
“Evidence and statistics gathered by the FSB over the last 18 months or so clearly indicates that small business owners in Northern Ireland are feeling the impact of the economic recession more than their counterparts in the rest of the UK,” he said.

“While this sector is naturally more flexible and innovative in recessions, there is an urgent need for the government to look to small businesses as the means for building the post-recession economy by helping them employ more people, become more innovative and ease the bureaucracy and tax burdens which many still face.”
Among the major issues facing small firms are the recently announced rise in National Insurance Contributions, which could affect employer decisions about staffing levels. FSB says 58% of its members already feel the UK tax system has a negative impact on their ability to grow.

Access to finance remains an issue for small firms, many of whom have seen a withdrawal of overdraft facilities or unfavourable changes to business account terms and conditions. Add to that a drop in demand from many external markets, recently introduced water charges and high energy and fuel costs and it is a fairly gloomy picture.

John Rooney of seafood processing company Rooney Fish in Kilkeel said his firm is one of many feeling the pressure from all sides.

“The problem is we’re getting hit with everything at once. For small-to-medium sized businesses like ourselves it is very tough at the moment, there’s no doubt,” says Mr Rooney.

“We all export and we have been cut back a good bit. We export all over Europe and, where before Christmas we should have been putting out three 40ft container loads every fortnight, we are lucky if we’re putting out one. Orders have dropped back,” he said. “We are still going ahead; we are existing, but it is very, very tight.”
The company has held its employment steady at just over 40 in the past few years, mostly because the nature of the business means that whenever boats fish it has to be ready to process, either fresh to frozen or fresh to cooked.

“We got rates for small businesses cut back but there are still big problems out there. People see the economy rising a bit but all the other costs associated with business are rising, so it is going to take a while before everyone gets back to square one.”

“I know companies that are working away and are going behind every week. But they are trying to work their way out of it. I know small company owners that are putting money from their own savings into the company to try and keep them going. But how long does that last?”

Siobhan McAleer, founder of multi-million pound business the Mortgage Shop, said the challenging economic conditions and resulting property slump have helped her to focus on how her company operates.

“The property crash and recession has been the most testing and challenging for my business,” she said. “That said we are coming out of the recession in better shape. Yes, we’ve had to make very difficult decisions and of course we’ve had to reduce our headcount but I can honestly say it’s made me a better business person and produced a strong and more robust business model. Every difficult decision has been made. We are now dusting ourselves off and continue to build and grow what has always been a profitable business.”

To maintain a healthy and productive workforce even during times of adversary, Siobhan says she had to be in front of staff communicating more.

“Firstly, it helped to quash any rumours that the company was performing worse than reality. Secondly, it reassured people that the Mortgage Shop was finding a way through the crisis therefore reinforcing its commitment to the branch network. By being visible and communicating with clarity to staff was, from a very practical point of view, assisted by people’s efforts to cut costs and also stopping individuals making rash decisions in response to difficult situations,” she says.

To lift morale she organised teambuilding exercises and staff conferences with motivational speakers and formed small networks involving groups of four Mortgage Shops to provide support.

“In May 2009, the Mortgage Shop, for the first time in 14 months, turned a modest profit marking a significant turning point for the company. We now aim to build on that by continuing to grow our network across the island of Ireland,” she adds.

David Maxwell, founder of Tyrone Timberframes, started his business over three years ago and now has an annual turnover of £1.25m. He said the company’s relative youth has meant it has been to some extent insulated from recession.

“We had no outstanding loans bar overdrafts with banks and we will not be overly reliant on bank finance for growth. My background and training as an accountant taught me that cash flow is vital to any business and even before the recession we had put in place the right procedures to try to keep things tight.” he said.
“We’ve used the time during the recession to plan for the future. We have invested heavily in creating new technology and intellectual property. This has lead to a breakthrough in the development of a house which doesn’t require a central heating system. We are looking at ways to expand throughout the UK and Ireland. The recession has made us more focused and relentless in our approach to managing the business and searching out new opportunities.”

For many firms, the recession has provided an opportunity to take stock of their business and upskill in preparation for the recovery.

Keith Turkington from software development company Fluent Technology decided to take part in the Department of Employment and Learning’s Management Analysis Programme.

He said: “The recession has presented strong challenges to all businesses regardless of size and inevitably it will result in both winners and losers. In the new economic climate we recognised that without forward thinking and leadership development in our company we would face a bottleneck in our own business growth. We decided to take advantage of the Management Analysis and Planning Programme (MAP) offered through DELNI which is aimed specifically at SMEs. The programme involved an analysis of our company’s management and leadership skills gaps and more importantly set us on a path for developing our people’s management and leadership skills.

“It has proved invaluable to our company in two ways. It has enhanced our ability to ride out the recession and, more importantly, has put us in a much better place to take advantage of the inevitable upturn.

“At Fluent, our key resource is our staff and through MAP we recognised that if we could do anything to improve their skills and productivity, it meant we could deliver more useful solutions to our clients, guaranteeing the income from today but also from tomorrow.”

Small and medium enterprises have experienced a difficult trading period of late but as the dust of recession begins to settle it appears the worst is over. Deloitte Senior Partner Glenn Roberts assess the outlook for the local SME sector and offers some salient advice.

The past few weeks have provided some relatively good news for SMEs.

In last month’s budget, Alastair Darling announced an agreement with Lloyds Banking Group and Royal Bank of Scotland to lend £105 billion to homebuyers and businesses over the next 12 months. This has been quickly followed up with confirmation from the Ulster Bank (an RBS subsidiary in Northern Ireland) that they are part of the agreement. In addition the Irish Finance Minister has tasked AIB and Bank of Ireland with lending €3 bn to SMEs. I trust this will contribute to improved credit conditions for Northern Ireland’s SME businesses.

It is also important to note that the growth figure for the UK economy for the last quarter of 2009 has been revised from 0.3% to 0.4%. Regardless of whether it’s 0.3% or 0.4%, it is growth and so the recession technically ended. We await the figure for the first quarter of 2010 which may consolidate the emergence from recession or, as some speculate, indicate a double dip recession.

One of the questions I get asked most often is “are you seeing a recovery?” At a micro level, does it matter if there’s a recovery under way? Perhaps from an emotional standpoint it does – so if we are in a recovery then we can all feel more positive.

But at a practical level I think the SME should be more concerned with learning from its experiences over the last couple of years and applying them now rather than worrying about a technical definition of a recession. Regardless of the state of the national economy, the SME should continue to focus on those priorities that have enabled it to survive and be successful thus far.

Looking at my own business and reflecting the experience of our clients across all sectors, I would say the following are the attributes of the successful businesses:

• An absolute determination to succeed. If you have been working twice as hard as you’ve ever worked for half the reward or for little or no reward then you’ll understand this point

• A relentless focus on cashflow, balancing the demands of creditors with the pursuit of debtors

• An ongoing open and transparent communication with staff so that they understand the challenges, difficulties and opportunities

• Access to timely, accurate financial information so that you know where the business stands on a day by day, week by week basis

• Continual questioning of costs. Why is money being spent on that item and what business benefit do you get from it?

• The business remains visible in its market and to its customers and suppliers

• Intense customer focus – stay very close to your customers

• Innovation. This isn’t necessarily about a technical innovation where you make a new discovery but rather more about is there a smarter way of doing what you currently do or can you expand what you currently do.

I think another major lesson from the current situation is around forecasting. Consider any forecast over the last two years e.g. forecasts of Government borrowing between the 2008 and 2010 budgets were out by around £100bn per annum. Similarly, forecasts on the future of the property market, on company sales and so on quickly went out of date. In many instances, they were badly wrong. We should accept that the only thing we know is what just happened – any future forecasts should carry a health warning and the SME should have a sensitivity analysis and a plan B.

The final lesson I take from the current situation is that within the next number of years there will be another bubble that will burst and a lot of us could be caught up in it. I say this because it’s barely 10 years since the dotcom bubble where there were inflated asset prices based on heroic revenue, profitability and behavioural forecasts.

Therefore in summary:

• Stay focussed on the priorities that have got you this far;

• Look critically at forecasts and options for your business; and

• Trust you are still around to avoid the next crisis.

The last couple of years have been some of the most challenging for investment managers. We talk to Nigel Crawford, head of Quilter’s Belfast office, to hear more about the company and his views on the best place to invest your money.

What is your role at Quilter?
I manage the Belfast branch of Quilter, which opened in early 2008. As head of the branch, it’s my role to make sure that the team here delivers the personal service and private client portfolio management expertise for which Quilter is known. I also have my own clients, whose investments I manage and with whom I liaise on a regular basis.

Tell us why you decided to become an investment manager.
My first involvement in finances was when I was asked to be treasurer of a youth organisation when I was much younger! I’ve always had a keen interest in stock markets and how business works and have been fortunate in being able to enjoy a good career in wealth management in Belfast.

What are the biggest challenges and opportunities facing the business at present?
The two years since we established the office in Belfast have been very challenging for the economy and stock markets so we’re even more delighted that we’ve been able to build up the business in that time. It’s been very exciting to be part of growing a business in Belfast and helping extend Quilter’s reach in Northern Ireland. The challenge for us is to keep growing and to help our clients achieve their investment objectives.

What are your views on the local and global economy in the coming months?
Globally, central banks have allowed the economic recovery to develop unimpeded, but now steps are being taken to reduce the unprecedented stimulus measures. Recent surveys of business conditions indicate that growth is sustainable beyond the inventory cycle, albeit at a more moderate pace than normal for the developed world. Money markets are not anticipating rates to rise much this year and many businesses have taken difficult decisions in a bid to position for future growth.

Locally, there is a more positive feeling in the market now, although an understandably heightened sense of risk awareness. Outside investment into Northern Ireland is continuing and this can only help the overall economy and we are already beginning to see signs of this happening.

How do you see the Quilter business developing over the next few years in Northern Ireland?
We expect business growth from clients of intermediaries whose main priority is to deliver overall financial planning, leaving the investment management of client portfolios to us. New legislation will soon require many financial advisers to review the way in which they operate and we look forward to working closely with these advisers and helping to manage their clients’ investments.

As an investor, why should I choose to work with Quilter rather than with the competition?
Quilter’s regional network is one of the best in the industry. It’s essential that clients have direct access to the people who manage their money and this means that we need expert investment managers who can also build really strong client relationships. Quilter is also very good at client communication. Whatever is happening in the markets, clients need to be informed about what is happening to their investments and what we are doing to help them achieve their specific financial goals – whether it’s to fund retirement or provide an inheritance for future generations.

How has the investment management industry changed since the onset of the credit crunch and recent recession?
The industry certainly came under focus during the downturn and, thankfully, this has encouraged greater transparency and openness. There has been renewed emphasis on “risk management” and on educating investors about what “risk” and “reward” really mean. Financial education is key to helping younger generations understand budgeting and to make sensible monetary decisions so that they are better equipped to plan for their financial needs now and in the future.

Working with its supply chain on the Royal Victoria Hospital development, Newtownabbey-based McLaughlin & Harvey achieved a collective saving of £280,000 by taking a collaborative approach to resource efficiency.

With support from Envirowise, funded locally by Invest Northern Ireland, McLaughlin & Harvey has encouraged suppliers involved in the construction of the hospital’s new critical care centre to become more sustainable – and save money in the process. This includes establishing a Supply Chain Project to work with local suppliers such as Warwick Engineering, Blackbourne Integrated M&E and McMullen Architects to identify areas for improved resource efficiency and environmental performance.

The 12-storey centre, which was granted planning permission in March 2007, will be capable of dealing with up to 80,000 patients per year. The project is worth around £114,000,000 to McLaughlin & Harvey.

Richard Robinson, Quality & Environmental Manager at McLaughlin & Harvey, said: “At McLaughlin & Harvey we have worked hard with the experts at Envirowise to embed sustainability in all aspects of the business, so we were keen to work with our suppliers to help them realise the benefits of becoming more resource efficient. Not only has this achieved considerable financial savings, it has also helped to make this project as sustainable as possible.

“Internally, the firm has established a system for measuring and reporting site sustainability, through focused Key Performance Indicators that are designed to really show sustainability performance.”
‘This approach won McLaughlin & Harvey a Green Apple Award from the Green Organisation that was presented at the House of Commons in November 2009.

“By understanding sustainable construction,” Richard said, “McLaughlin & Harvey has been able to manage the construction process to make significant waste and energy reductions.”

Sam McCloskey, Envirowise Regional Manager for Northern Ireland, added: “McLaughlin & Harvey is a great example of a company looking at not only its direct impact on the environment, but also the ways in which working with suppliers can reduce the carbon footprint of the entire site and cut costs for all concerned. Sharing ideas and best practice in this way not only boosts the bottom line for the companies involved, but will also help to forge strong business relationships for future years.”

Olive Hill, Director of Technology and Process Development at Invest Northern Ireland, said: “A direct correlation exists between improvements in resource efficiency and a company’s profit margins. By engaging with the experts from Envirowise, businesses such as McLaughlin & Harvey can find out how to reduce waste and achieve significant financial savings in the process. The construction industry’s endorsement of McLaughlin & Harvey’s approach to sustainability was also recognised last year by its winning of the 2009 CEF/Specify Award for Environmental Sustainability, sponsored by Invest NI.”

To help other construction firms in Northern Ireland benefit from improved resource efficiency, Envirowise has launched a range of free fact sheets for contractors and sole trades people, which provide practical advice on reducing waste and saving money through resource efficiency.

There are seven factsheets available, providing tailored information for labourers, bricklayers, electricians, plumbers, decorators, plasterers and carpenters. The new guides also highlight legislation that will impact on sole traders, along with details of organisations that can offer more help and advice, and can be downloaded for free at www.envirowise.gov.uk/Construction.

“Cautiously optimistic” is the overall view of businesses in Northern Ireland regarding prospects for the jobs market, says the most recent independent jobs survey commissioned by recruitment website NIJobfinder.co.uk.

One hundred large and small companies from across Northern Ireland and representing a wide range of sectors including manufacturing, service and retail were surveyed to gauge activity and opinions about the job market over the past three months and looking forward to the next three.

Over 50% of those surveyed reported an increase in the number of vacancies available with a marked improvement in confidence as more roles are advertised. Only 9% felt that the situation was still in downturn. Whilst many companies had implemented a redundancy programme or job freezes, the focus was now on right-sizing agendas with sustainable recruitment procedures.

Looking towards the next three months, 42% of companies interviewed anticipated a modest increase in vacancies. Nevertheless, clear notes of caution were sounded especially amongst bigger employers who were experiencing large volumes of applications for jobs and often from over-qualified applicants anxious for employment. Just over 20% of respondents were less optimistic about future trends indicating a decrease in the jobs market.

Overall, businesses gave the impression of a slowly recovering market with 46% describing the jobs environment as “getting better”. Only 3% saw the situation worsening. Suggestions as to what might boost the market included more government investment, easier bank lending and programmes to enable people to diversify their skill sets.

Pictured (L-R) Halo Director, Alan Watts and William Smith, Managing Director of Sembarc, at the recent ‘Angels – Beacons of Hope’ exhibition at Victoria Square.

Halo – Northern Ireland’s Business Angel network – has announced the launch of the first ever Business Angel EIS Fund worth a quarter of a million pounds.

Based at the Northern Ireland Science Park – Halo is the first business angel network associated with a highly tax efficient fund of this kind. The fund – which is managed by London-based Fund Manager Javelin Ventures – will provide much needed capital for local entrepreneurs in a bid to help grow NI’s business community. The money in the fund has been provided by Halo angels and allows them to spread their investment across a number of NI companies while also adding to the ‘firepower’ when Halo angels invest directly in these firms.

Halo Director, Alan Watts, said: “Angel investment is an important investment class helping to channel funds into the vital but high risk area of start-up companies. Halo aims to grow the investment community here and support innovation in the region – schemes like this encourage more angels to become involved and importantly make it ‘easier’ for new angels to take their first plunge.”

Campbell College pupils, winners of the Stock Market Challenge supported by Santander & NYSE (from the left) Jason Li, Omar Cartwright, Simon Coleman, Max Johnston and Peter Nesbitt.

Campbell College has taken top honours at this year’s Stock Market Challenge held at the University of Ulster, Jordanstown on11th March.
The competition, now in its second year, has been sponsored by the Department of Education, Department for Employment & Learning and Invest Northern Ireland in partnership with Young Enterprise Northern Ireland. It not only teaches young people about how financial markets work but encourages them to develop communication, problem-solving, decision making, teambuilding, and negotiation skills.