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SMEs are not good at chasing tenders but help is at hand

Under 10pc of SMEs have managed to win a lucrative government contract and many don’t even bother to apply – but a new company is now there to lend a helping hand
Every morning when I check my phone, I am certain that there will be an email in my inbox from the e-tenders website. I subscribed years ago for the areas that my company is interested in which include consulting and training. I read the body of each mail and then typically delete it.

If one tender looks more appealing, I return to it eventually and click through to the e-tenders website to explore it further. And then, more often than not, I delete it anyway.

If that sounds familiar to you, then you’ve probably been as sceptical as me. But after meeting Tony Corrigan the founder of Tenderscout, pictured, I have changed my thinking.

SMEs and Tender Opportunities

“Here are four amazing statistics about government tenders. Less than 10pc of all Irish SMEs are recorded as having won a government contract. Only 10pc of Irish SMEs bother to enter in the first place. 25pc of all EU contracts only have one applicant. And 10pc of all tenders don’t even get one response,” said Tony.

This seems quite incredible to me, given that sales (with guaranteed payment) are a lifeline for any SME. In my conversations with SMEs over the years, I know there is a high level of cynicism and scepticism about the likelihood of actually winning a tender.

Many of us think that the entity has already made their mind up and is simply going through the motions.

Or we also think that they’ll go for the cheapest bid. “That’s simply not true,” Tony assures me.


The Pitfalls for SMEs Responding to Tenders

Here are the typical pitfalls SMEs fall into when responding:

Finding opportunities on a web portal. If the first you know about a tender is because you saw it on a website, then you’re on the back foot.

Assuming that you know how to compete. Most businesses think they can tender just because they can write a proposal. The evidence is that they lose 75pc to 90pc of the time.
Assuming that they know what they’re doing. It is not likely that a company whose core expertise is digital marketing is also an expert at government contracting.
Failing to qualify the opportunity. Most businesses compete in hope rather than expectation because they have no idea who the competitors are, what the buyer is looking for, what the budget is or whether in many cases they actually know what is required.
Spending too much in competing. Businesses continually spend too little competing for individual opportunities and as a result, end up spending too much overall. They continually reinvent a sub-standard wheel rather than focusing on getting it right the first time.
Assuming that the buyers knows what they want. Tenders exist because the buyer needs something, but they may not know exactly what that is. Buyers will often educate themselves through the process, so you always have a chance to influence the outcome.
Failing to learn from your experiences. All tenders are scored and tell you where you need to improve. Most businesses ignore this advice and keep repeating the same mistakes.
Change Tips for Responding to Tenders

1 Read the tender requirements: Make sure you qualify (turnover, etc). If you don’t, find a collaborator.

2 Qualify the opportunity: Who is the competition, what’s the budget, can we actually deliver? Can we make a profit?

3 Estimate the cost of competing: Decide how much effort it’s going to take to compile a response and who’s going to do it? There’s no point in half-doing it. Ensure you can still break even when counting the cost of competing.

4 Decide whether you need professional help: It may be cheaper than doing it yourself and will certainly give you a higher probability of success.

5 Give yourself enough time to do justice to your proposal: Finish it a week before it’s due in to give you a chance to read, edit, refine and improve it.

6 Submit the tender on time: The number one reason why tenders fail is because they are submitted late. Even a second late is too late and it will not be evaluated.

7 Regardless of the outcome, seek a face-to-face debrief: This is the start of your next sales cycle.

Last Word

Tony founded Tenderscout and has developed a software solution to support organisations in improving their chances of success. What the team don’t know about tenders is not worth knowing.

Imagine if you were doing an exam and someone let you see the answer before you sat for it? This is exactly what Tenderscout offers. Rather than having to start with a blank sheet of paper with each tender, Tenderscout can help in a number of ways. Either with a repository of prepared answers that you can ‘copy and paste’ or with consulting support.

Given all of the pitfalls outlined above, Tenderscout removes the stress and enable SMEs to compete and has a win rate of 70pc for its clients. My company will be signing up as a new customer.

I will endeavour to return to this topic in a few months to tell you how we got on

Alan O’Neill is managing director of Kara Change Management, specialists in strategy, culture and people development. Go to if you’d like help with your business. Business advice questions for Alan can be sent to

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Tax Institute boss hits out at Revenue ‘delays’ and ‘inconsistency’

THE new president of the Irish Tax Institute has lashed out at Revenue, saying businesses have been facing big delays in getting clarifications on important tax questions.

Marie Bradley said some businesses are waiting three to six months for answers on technical questions.

This, she said, leaves “many businesses in the dark about their decisions and the tax compliance consequences”.

“It stalls investment, creates uncertainty and ultimately stifles growth in the economy.”

Ms Bradley said businesses had also encountered cases where different departments within Revenue provided differing advice on aspects of tax law. Revenue said in response that it “endeavours to reply to complex technical queries within 20 working days”.

It said there a number of reasons why it can take longer to respond, including the complex nature of some queries or if further clarification is needed from the person who made the query.

“Also, instances where professionals are seeking technical confirmation on material they should be reasonably confident on can also put pressure on the system and slow down responses,” Revenue said.

It added that it “expects that tax professionals will have researched and analysed the issue themselves and only where the answer remains unclear, seek further guidance”. It said that a quality assurance programme is in place to ensure consistency and accuracy in opinions issued.

The Irish Tax Institute is a representative and educational body for chartered tax advisers.

Ms Bradley was speaking at the organisation’s annual general meeting yesterday.

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Central Bank orders fund managers to review fees

Regulators at the Central Bank have ordered managers of Irish-domiciled mutual funds to review fees charged to investors, after uncovering evidence of possible overcharging.

The Central Bank of Ireland’s Director General Financial Conduct, Derville Rowland, said the regulator is concerned that guidance on how fees are levelled is not being applied in a consistent and comprehensive manner across the industry, which, she said, could lead to the overpayment of performance fees.

That followed an inspection into undertakings for the collective investment of transferable securities (UCITS) performance fees. UCITS are structures used to manage and sell mutual funds.

Following inspections, the Central Bank said in some cases fees in such structures may be accrued as a result of market movements rather than due to the performance of the investment manager.

Where performance fees are based on the outperformance of an index, it was unclear as to which version of the index was being used in some cases, the Central Bank said.

As a result of the investigation, which looked a sample of funds, all fund management companies whose Irish UCITS charge performance fees are required to confirm to the Central Bank that they have carried out a review of the existing methodologies in order satisfy themselves that performance fees charged comply with the guidance.

The Central Bank said it will also commence supervisory engagement with the individual UCITS that were the subject of the review.

UCITS established in Ireland are authorised under common EU regulations.

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Thousands of families face huge inheritance tax bills as home values rise

Thousands of families are set to be hit with huge tax bills when they inherit homes and other assets this year.

And many are in for a shock, as half of people mistakenly believe their family home is exempt from inheritance tax.

It comes as Revenue figures show the money paid in inheritance tax has doubled since 2010, reflecting sharp rises in the value of homes.

Close to €500m is expected to be paid this year in what is often dubbed ‘death taxes’, accrued from older parents passing on homes, farms and businesses.

Strong rises in property values have left thousands vulnerable to large tax bills, but many do not realise they will have to pay Revenue when they inherit the homes.

A survey from Irish Life shows one in five of those over the age of 55 expects to leave more than €500,000 in inheritance to their families.

Half of those surveyed expect to leave more than €100,000, indicating there is a lot of money being passed between family members. The survey was carried out by Coyne Research on 1,000 adults.

The survey shows 84pc of people in Ireland don’t know the current inheritance tax rate, which could seriously affect inheritance for their family. Inertia is evident as less than half of people have made a will.

Irish Life protection manager Kate Connor said a huge amount of inheritance tax is expected to be paid this year, with rising property values putting more families into having to do so.

Reductions in the tax-free thresholds during the downturn, together with increases in the inheritance tax rate, have resulted in more people needing to take action now to plan ahead for the tax bills that their family could face.

The survey lays bare the wealth accumulated in middle Ireland.

Some 20pc of those over the age of 55 expect to leave more than €500,000 in inheritance. A quarter of over-65s expect to leave the same amount to their families.

But the survey shows the younger generation has far less. Only 7pc of those between the ages of 35 and 54 expect to leave more than €500,000 in inheritance to their families.

Almost half of people surveyed plan to leave more than €100,000.

The survey shows that there is a widespread lack of awareness of the levels of inheritance tax that may have to be paid by families in the coming years.

As well as most people being unaware of the current inheritance tax rate, two-thirds of people do not know what the different thresholds are.

The current tax-free allowance for children is now €310,000, significantly lower than the €542,000 threshold prior to the financial crisis.

Solicitor Susan Murphy of said there was a tendency for people to put off making a will, and also to fail to find out about inheritance tax.

“People like to put their head in the sand about such matters. Perhaps it’s an Irish thing. Quite a few times I’ve been told ‘Sure I’ll be dead and buried, it won’t matter to me’.”

Ms Connor of Irish Life advised families with assets to get professional legal, tax and financial advice to put a plan in place, including a will, to ensure an estate is taken care of in a tax-efficient way.

An option, she said, was a Section 72 life insurance plan, which is specifically designed to pay inheritance tax.

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Pfizer facing $100m Brexit bill as it grapples with no-deal fallout

European firms aren’t alone in their Brexit pain – Pfizer, the US-based drug behemoth, says its costs for dealing with the upcoming split will reach $100m (€86.4m).

The UK’s looming rupture with the EU threatens to slow goods at borders and force firms to duplicate regulatory efforts. Pfizer said its costs stem from transferring product testing and licences to other countries, changing clinical-trial procedures, and other preventive measures.

It is working “to meet EU legal requirements after the UK is no longer a member state, especially in the regulatory, manufacturing and supply-chain areas”, according to a filing last month where it cited the cost estimate.

Pfizer – which got about 2pc of its $53bn in 2017 revenue from the UK – highlights the pharmaceutical industry’s dilemma as it braces for a rocky, no-deal Brexit. Uncertainty has forced companies including AstraZeneca, GlaxoSmithKline and Merck to prepare for a worst-case scenario.

Pharma companies have long relied on their ability to move people and goods in and out of countries, and Britain’s departure could complicate many aspects. The UK Department of Health last month told drugmakers to build six-week stockpiles of their products in preparation for potential delays.

Much of the industry had already begun hoarding medicines or investing in new facilities to release drugs. AstraZeneca, which has committed to setting aside a three-month supply of its products, said it can’t raise inventories of one of its cancer drugs because its production facilities are already at full capacity.

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Manufacturing output hits seven month high

Manufacturing output has risen to a seven month high driven by sharp increases in output and new orders.

The headline PMI in August was 57.5, from 56.3 in July. Any reading over 50 is deemed growth.

New order growth quickened to the fastest in the year so far, with strong demand reported from both domestic and export markets, according to the latest Manufacturing Purchasers Managers Index (PMI) from specialist bank Investec.

The rate of expansion in new export orders was marked and the highest in three months with panellists citing the UK, the Eurozone and the Middle East as sources of new work.

As a result of the strong order-book growth, there were further increases in the backlogs of work, quantity of purchases, and employment indices. The current sequence of job creation in the manufacturing sector has now extended to 23 months.

However the index found that margins remain under some pressure, with input costs showing another sharp increase in August, although the latest increase was the slowest in ten months.

Panellists reported higher costs for a range of raw materials including metals and timber.

Although firms were able to defray at least a portion of this cost inflation by raising output prices, a seventh successive decline in the profitability index was recorded.
Looking forward the forward-looking future output index remains “very elevated” and reached a three-month high in August. Over 50pc of respondents expect a rise in production over the coming 12 months, while just 4pc anticipate a decline.

“With a positive economic backdrop both in Ireland and abroad, we think this optimism is well-founded,” Philip O’Sullivan, economist with Investec, said.

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Motor group to create 50 jobs with €15m investment in dealership cluster

Cork-based motor group Johnson & Perrott is to open the first phase of a €15m dealership cluster at Bishopstown in Cork today.

The overall project will deliver 50 jobs.

“Our dealership in Bishopstown is the largest purpose-built new facility for Jaguar and Land Rover in the country and is a key step in positioning Johnson & Perrott as a leader in motor retailing for Cork city and county,” Mark Whittaker, CEO of the group, said. He added that the investment “represents a huge vote of confidence in the health of the motor industry”.

The opening of the showrooms follows pre-tax profits at the motor group last year increasing by 33pc to €6.6m.

Accounts filed by Johnson & Perrott show that the group enjoyed the increase in profits as revenues decreased by 2.6pc, going from €88.5m to €86.18m in the 12 months to the end of December last.

The firm paid a dividend of €675,000 last year, following a dividend payout of €645,750 in 2016.

The company is one of the best-known family businesses in Cork and has a long association with transportation in Ireland, dating back to the coach-building era in 1810.

The group last year achieved an increase in pre-tax profits only after recording a profit of €2.78m on the sale of investment properties. The accounts state that the group intends to open a second dealership at the cluster in Bishopstown in December.

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How banks are making it easier to get rid of unwanted costly subscriptions

Banks have moved to make it easier for consumers to cancel unwanted subscriptions.

The changes are likely to come as a huge relief as many companies make it very difficult for customers who have signed up for services, such as gym memberships and TV and online streaming services, to get out of their contract.

Research in the UK has shown that unwanted subscriptions are costing people an average of €50 a month because they are too difficult to cancel.

Such subscriptions are an arrangement to receive something, typically a publication or an online service, regularly by paying in advance.

However, commentators say that some companies deliberately make it impossible to get out of the contracts.

Others refuse cancellations and request that they are given more notice, often seeking six months’ advance warning.

Some firms force consumers to contact them through their websites, providing no telephone number, then fail to reply to the online messages.

Banks have previously not let customers cancel the contracts and would take instructions only from the provider that set up the subscription.

Dermott Jewell, policy adviser with the Consumers’ Association of Ireland lobby group, said: “The amount of effort any individual has to go through to stop a subscription is ludicrous. People end up giving up and leaving the subscription in place.”

He said that subscriptions were very easy to sign up to but could be difficult for consumers to get out of later.

Daragh Cassidy, of price comparison site, said customers could cancel a direct debit by giving advance notice, usually in writing, to their bank and their service provider. Most providers require around a month’s notice. However, banks now allow customers to easily cancel direct debits themselves immediately through their internet banking platforms.

Mr Cassidy said: “While the advice is always to let your provider know you’re cancelling so they don’t keep billing you, this can be handy when a provider has been slow to respond to a customer’s initial cancellation request.”

AIB said it had streamlined its cancellation service for what it called recurring transactions associated with debit or credit cards. It can now take instructions directly from customers and stop the transactions. “Previously, customers had to provide evidence that they had attempted to cancel a recurring transaction directly with the merchant but were continuing to be charged,” the bank said. This facility is available on credit and debit cards but not for wider current account direct debits.

Bank of Ireland said: “With regard to current accounts, recurring payments instigated by merchants would be direct debits, and the customer has the ability to cancel these through the mobile app.”

Ulster Bank said payments linked to cards could be cancelled directly with the bank and account-linked direct debits could be cancelled online through Anytime Banking.

A Permanent TSB spokesperson said: “We can cancel recurring payments if the customer tells us they have tried to do so and had no success.” This applies to both credit and debit card payments.

KBC Bank said it was looking into a way to take instructions from customers to stop card subscriptions.

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Large numbers of SMEs yet to prepare for payroll shake-up

Large numbers of smaller firms have admitted they are not prepared for changes in how payroll systems interact with Revenue that are due to come into force in January.

An overhaul of the Pay As You Earn (PAYE) system is due to come into effect in five months.

But 40pc of firms are not prepared for the changes, according to a survey of 200 firms which was commissioned by Big Red Cloud, a firm that supplies payroll software.

A majority of the firms surveyed said they were short of detail on how the new PAYE system will work.

From January, the new system will see employers submitting payroll data on a regular basis.

This represents a fundamental shift from the present system where detailed payroll data is submitted annually in a P35 form.

Big Red Cloud said Revenue’s changes are warranted, given the fact that the existing PAYE system had been introduced in 1960, at a time when a job was typically for life and payroll was a manual process.

Every aspect of how an employer fulfils their PAYE reporting obligations will change to a real-time electronic submission of the data.
Big Red Cloud said that covers everything from commencing employment, statutory deductions (PAYE/PRSI/USC), as well as the cessation of employment.

Well-known forms, such as the P45, P46, P30, P60 and P35, will disappear.

The survey found that 66pc of small and medium-sized firms are “short on detail” on the PAYE system overhaul.

Just 5pc are “completely unaware” of the changes.

But 40pc of SMEs said they are “not prepared at all” for the January 1 modernisation deadline.

And just 15pc say they are confident they will be ready.

Big Red Cloud CEO Marc O’Dwyer said the Revenue changes represent a huge overhaul of the PAYE system, the first in 58 years.

“As the year progresses, it is becoming increasingly apparent to us that, not only are many businesses not ready, many are simply unaware and/or uninformed of the changes and what they will mean for their business,” he said.

He added it was important that owner/managers take the necessary steps over the next few months to ensure their business is Revenue-compliant by January.

Revenue Commissioners chairman Niall Cody said recently the modernising of the system and move to real-time PAYE “represents an important step in the process of continuous improvement in service, compliance and efficiency in our administration of the tax system”.

He said that improvements and efficiencies will be the end-goal but “businesses, particularly those at the smaller end of the scale, will need some help to get there

European shares slip on China weakness

European shares fell back yesterday as weakness in Chinese markets and worries over a trade dispute between the United States and China eclipsed optimism that a Nafta deal could be struck by today’s deadline.

The pan-European STOXX 600 ended the session down 0.3pc, while Germany’s DAX, which is sensitive to China due to its prominence as a German export market, dropped 0.5pc.

Chinese stocks fell after a Reuters poll showed activity in the factory sector was likely to have slowed for the third straight month in August amid uncertainty over an escalating trade war with the United States.

In Europe, trade-sensitive mining stocks tumbled 0.8pc.

“It’s a balancing act with, on the one hand, relatively positive momentum behind Nafta, but when the focus turns to China and trade war it doesn’t seem like an end is in sight because any escalation plays to Trump’s rhetoric of how he’s protecting US prosperity and jobs,” said Gary Waite, portfolio manager at Walker Crips Investment Management.

Though cars were also off earlier in the session, a concessionary tone from European Trade commissioner Cecilia Malmstrom on car tariffs helped lift the sector, which closed flat.

Earnings reports caused some sharp moves in individual stocks.

Shares in Europe’s largest property company Unibail-Rodamco-Westfield fell 4.3pc even though the company reported a boost to profits from its acquisition of an Australian shopping centre giant.

UK commercial property firm Intu fell 3.4pc after Morgan Stanley cut the stock to underweight from equal-weight, and peer Hammerson fell 5pc. Klepierre lost 3.3pc after a Morgan Stanley downgrade.

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