The Profit Margin, with Jamie Delargy and Naomi McMullan

Opening a coffee shop. It sounds a dream. A straightforward business that makes easy money, isn't burdened with much regulation and operates pretty much stress free.

Those assumptions couldn't be further from the truth says coffee shop owner Orla Smyth. She opened up the Scandinavian inspired Kaffe O on the Ormeau Road two years ago.

The former corporate lawyer admits before starting she hadn't a clue about selling coffee. "I may have known a lot about business and the law of business but actually being operational was not my strong point." She said despite having prepared thoroughly, engaging in business planning and budgeting, nothing prepared her for the actual experience of opening the doors on the first day and dealing with the customers.

Orla who has already opened up another Kaffe O, this time in Botanic Avenue, points out that some of the outgoings in her industry are excessive. She can't understand why the rates in her second shop are three times those on her first when she isn't doing three times the business.

She says while her shops are doing well, running them is a 24/7 responsibility. Furthermore new owners have to be mentally geared for the long haul.

Kaffe O's distinctive atmosphere fits in with Colin Neill's belief that locally owned coffee shops should aim to offer something different from the national chains. The Chief Executive of Hospitality Ulster says they need to stand out to attract customers.

Colin says there are many options for the prospective business operator. They can kit out their coffee shop with brand new furniture or go shabby chic, sourcing what they need from auctions. The expensive barista machine can be leased rather than bought outright. But no matter how low cost your operation, it will require an outlay of a few thousand on such things as recruitment.

The critical ingredient for success he says is enthusiasm. "If you've got passion, you'll find the money and drive the business."

Despite coffee shops having sprung up all over the place, Colin says there's scope for new establishments as more people choose to have their cuppa outside the home. And reassuringly he says research indicates the industry should grow over the next ten years.

Start-up:

This week pitching his idea is student David Hatton. David was inspired to come up with a web-based tool after his grandmother succumbed to dementia. "Hindsight" uses reminiscence therapy to stimulate patient's memory and assist with everyday tasks and personal interaction. David was the winner of the 2016 Connect Young Founders Competition run by the Science Park. You can listen in to his idea to see how it works in practise.

We now know the process of leaving the EU will begin before the end of March. The Prime Minister has set the date by which she will trigger Article 50. That's one key issue settled. But more than three months on from the EU referendum vote, you would imagine the implications of Brexit would be a good bit clearer. That’s not the case.

The Chancellor did issue a statement about a month ago which reassured farmers, that come what may, they would get EU subsidies until 2020. Universities and research bodies were also given similar guarantees about funding. But others have been left in the dark over access to EU Structural Funds, leading to fears that a deep well of money may be drying up.

When she came into The Profit Margin, the head of the European Commission office here Colette Fitzgerald, confirmed that Northern Ireland will still have access to cash from Europe's Structural Funds, while the UK remains within the EU, as long as applications conform with existing rules on co-financing.  

Economist Neil Gibson, Director of the Ulster University Economic policy centre makes an interesting point. He says post Brexit we shouldn’t automatically take money once earmarked for Brussels and simply use it to replicate the EU funding of the past. You can find out how he thinks we should model our approach to the situation in the podcast.

Much has been made, and rightly so, of Northern Ireland’s unique position as the only part of the UK with a land border with the EU. Many of those who fear the consequences of Brexit are turning towards an Irish passport. Paul Gillen from lawyers Pinsent Masons outlines the general advantages the holder of an Irish Passport possesses in seeking job opportunities in EU member states after Brexit while also sketching the limits to those benefits.

Start-up Section

Pitching this week is a Belfast start-up that’s received funding from one of the former dragons on the BBC’S Dragons’ Den. Hayward Hawk is a technology recruitment firm. Listen in to see if you can spot why James Caan was willing to invest in them.

 

Choosing the company car is one chore that no executive ever wants to put on the long finger. Few tasks give so much pleasure as the search for a new gleaming machine. 

We went to dealer Charles Hurst to find out what the busy boss is searching for. It seems that for some buyers, badge trumps spec. Given the choice of a mid market model offering more bells and whistles than an upmarket rival, a number of business people will opt for the less well equipped but fancier marque. And who says executives are hard headed unemotional types? 

Nowadays executives have such a big range to select from because in addition to the more familiar names, luxury manufacturers are targeting the business executive market. Jeff McCartney, Dealer Principal,  reveals that you can buy a brand new Maserati to impress your colleagues for under £50,000. 

But like many other business decisions, if you’re not careful your decision can cost you much more than the upfront price tag or the monthly payment. That’s because the government is using the personal tax system to heavily penalise drivers of gas guzzling vehicles.

Two mid range cars can attract radically different charges depending on how much CO2 they produce. David Waugh from accountancy firm Hamilton Morris Waugh says the annual tax bill for the more polluting vehicle can be thousands of pounds higher than for the greener machine. You can work out the costs with an iPhone app HMW have produced.

Whatever your eventual choice of motor, there is the small matter of how you pay for it. Most will not want to take all the hit at one go. They’ll opt for hire purchase or contract hire. David Waugh has useful advice on that and on whether you should buy direct from the dealer or use an intermediary.

Given you’ve now just landed yourself with a expensive monthly car payment, we’ve a tip on how you could get some useful R&D done at absolutely no cost to your company. Dr Mervyn Smyth of Ulster University’s School of the Built Environment explains how, for a project you’ve devised, you can harness the skills and expertise of final year students. 

Start-up Section

This week our start-up is Talnet. Talnet is aiming to be the social networking website for people and businesses specialising in the creative industries to help them build more connections and look for work. These include areas such as Film & TV, Theatre, Music, Modelling, Arts, Fashion & Textiles, Animation, Photography, Radio, Visual Effects and Publishing. 

Some firms don’t enter business awards, but they probably should. It can be a cheap way to promote your company. Granted, not everyone likes entering competitions; they can appear to be a bit of a hassle, they can be time consuming, but if you win, they can help open doors and give your business a bit of extra credibility. Sometimes it’s nice to get an external pat on the back too. The actual process of writing an application form is good discipline as it also forces you to examine and reflect on what your business does well and why (and in what areas it may need improvement.)

So how can you boost your chances of competition success? We’re not promising a magic formula, but we sat down with a couple of people who’ve judged a lot of awards to find out what it is they look for. Richard Buckley from Business Eye Magazine has some specific pointers that you can listen to in our interview, and also crucially what not to do.

We’re also speaking to Crawford Ewing, from Ewing’s fish mongers in Belfast about how to take advantage of the opportunities that winning an award can bring to you. Ewing’s have won a number of Great Taste Awards, and that has brought them a flurry of new customers. 

You do though, have to be smart about exploiting the opportunity that winning an award may bring. Promotion is something that a lots of SMEs are not necessarily great at doing. You may think there’s a lot of expense involved in building your business profile, but that’s not necessarily the case. You don’t have to be on the books of a PR firm. Did you know you can pay someone to write a one off press release and distribute it for you? We caught up with copy writer Claire Savage to hear how her business model works and how to create marketing material that can get you noticed online.

Start-up: Ohh Social

In our elevator pitch this week, we have Ohh Social. They’ve developed a smart phone app offering buy-one-get-one-free incentives across four main sectors; Wine & Dine, Kids Activities, Leisure & Attractions and Health & Beauty. Listen in to see if you’re tempted.

Is the software industry here suffering because it lacks a body with the authority to speak on its behalf?

Unlike some other sectors, technology isn't represented by a single voice though individual firms do press its case.

On the Profit Margin we ask whether the software industry would be better off with a lobbying group to present a consistent message to politicians and the public.

One man maintains that the current fragmented approach is typical of the sector, and it's the same in Dublin or London. Gareth Quinn is from Digital DNA, a brand that runs business and technology conferences.

"We can sit back and wait for one voice, but you have more and more examples of industry taking the bull by the horns and doing it themselves. Plenty of people in the technology sector in Northern Ireland are putting their shoulder to the wheel, they don't sit around and wait," he said.

In the podcast we'll hear from Gareth about what the technology sector does want to achieve and if there are any specific strategies in place.

An industry that does have a one body that represents what it wants is the manufacturing sector.

Stephen Kelly is from Manufacturing NI. It covers a diverse group of businesses, from the small to the large. That range naturally does come with challenges but there are a set of tactics he employs.

"You have to bring evidence to policy makers and you have to bring solutions, not just gripes. It's crucial to get organised, get visible and communicate. We also hold onto what we've got and break everything down into smaller issues. We don't swamp policy makers with demands."

You can find out more about methods to get your message across in Stephen's interview and why he thinks those tactics work.

Start-up Section: Coffee-Box Games

This week our start-up is a gaming company with a difference. One of the co-founders already has a huge social media presence with 3.9 million monthly views on his gaming channel on YouTube.

Can they turn that considerable following into sales? Listen to their pitch and see what you think.

You'll have seen the ads. Dublin Airport is making an aggressive bid to attract travellers from Northern Ireland. Annually around 400,000 passengers from the north are now flying in and out of Dublin. The trade is seen as a threat leaching business from local airports. But should we  completely change our thinking around Dublin airport? Look at it as a strategic asset - as a gateway into Northern Ireland. Work with it rather than against it?

One man who should know is Enda Corneille, the Ireland manager for Emirates. The carrier runs two return flights a day out of Dublin to their hub airport in Dubai.  Could they ever come to Northern Ireland? Enda maintains in the short-term the main goal is to drive the business out of Dublin. In the podcast he talks about the plans for the Irish business, how it could assist the economy in Northern Ireland and the possibility of perhaps one day coming to Belfast.

Graham Keddie from the International Airport is bullish about the sector’s growth prospects here. He points out that passenger numbers are close to pre-recession levels and staff numbers are growing “to put it into context, we’re increased the number of people working in the airport by 500 over the past 8 months.” While admitting that it’s almost inevitable that long haul traffic is always more likely to fly from the Republic of Ireland, he says the International Airport can compete on European traffic. In the interview he talks about the focus in the years ahead and what particular routes they’re making progress on. 

 

Start-up Section: Building an online tool for kid’s with autism

This week in our start-up section we're meeting Debbie Craig, the founder of Limejar. She’s combined her experience of raising her autistic son with her skills in software development to build an on-line platform that links the child’s parents, educators and healthcare providers. The aim is to help set up routines and create targets that children with autism can easily follow. She’s launched a kick starter campaign. You can find more details at www.boop.ie

Baby food company Heavenly Tasty Organics was set up at a kitchen table five years ago, today they export to 14 countries, and have multi-million pound deals with major supermarkets in both the UK and Ireland. We’ll find out from Shauna McCarney Blair how they built the business; the ups and the downs and how the company had to change strategy to grow.

And up-cycling, re-cyling, reclaiming, it’s all becoming more popular. We’ll be looking at the large firms locally that are turning rubbish into a resource. (Between them they support over 1,000 jobs.) Eric Randall from Bryson Recycling believes if we treat waste like a commodity we can create more employment.

 

Many businesses in NI were blindsided by the Brexit vote. I spoke to lots of different firms in the run-up to the referendum and very few had a contingency plan in place.

So what happens next?

In the studio in our mid-week edition (so much has changed this week already, we didn’t want to put out the podcast on Friday) we’re talking to Peter Burnside from business advisory firm BDO. He makes the case that it’s likely there will be breathing space before Article 50 is triggered, so now is the time for all businesses to engage in a proper risk analysis. We’re also talking to the Director General of the British-Irish Chamber John McGrane. The government in the Republic of Ireland were quick out of the blocks with a post-Brexit plan, what should the priorities be for the NI Executive and Westminster when it comes to negotiating with Europe?

On a completely different note, we’re also talking to a social media expert about getting the most out of Facebook for your business. (Did you know like and share competitions are a bad idea?) Tune in for more tips about how to maximise your social media presence.

Colin Williams is the man behind one of Northern Ireland’s most successful home-grown creative businesses. His children’s TV programmes are exported around the world, watched by an audience of millions.

Building the business hasn’t all been plain sailing. When he started with his first creative business, Colin had to remortgage his house, as he says, “If you can’t make an investment in yourself, who can you make an investment in?” When he decided to go into making children’s tv programmes, he was told “ People in Northern Ireland don’t make those type of shows.” He got the last laugh though, Sixteen South’s latest project with Disney has a budget of £4M.

We’ll be talking to Colin about what prompted him to start the business, how he stopped fear from holding him back and how he has managed to grow the company successfully.

We’ve also be hearing from Sinead O’Sullivan. From Armagh, the aerospace engineer now as a role with the Harvard Business School. She was in Belfast recently as one of the key-note speakers at Digital DNA. She’s started her own company, focusing on commercialising the drone and satellite research she works on. Sinead is adamant she wants to base part of her new company in Belfast. (She’s already managed to raise significant funding for her work in the USA.)

Our start up is Testify, an on-line testing platform that’s aiming to let game companies find the magic in their game.

This week we’re featuring accountant Jeremy Harbinson from Harbinson Mulholland. He spends a large chunk of his time coaching people around strategy. He maintains close to 70% of businesses don’t have a strategy, and of those that do, most can’t implement it. His point is most people are reactive rather than proactive.

We’re speaking to him about why mastering your business is about mastering your psychology.

Plus we’re also talking about “Impact Investing” ever heard of it? (Some of the big hedge funds are now gathering around it.) It’s a tiny, tiny sector but it’s growing rapidly. We’ve been to meet Rod Schwartz from ClearlySo, to find out what you need to know about it, and why it’s likely to become larger.

Our start up is Swig. The company makes personalised hip-flasks. It ships to over 40 countries, all from a studio in Belfast.