Size really does matter!

Having listened to many politicians over the past few months paying lip service to the need to help SME’s create much needed employment in the Irish Economy and having kept a watchful eye on the E Tenders website for suitable tenders, I have come to the conclusion that I am wasting my time even bothering about the possibility of getting any business from the public sector.

A couple of months ago I wrote about a tender for Data Entry for a Government Body that was specifically designed so that the work would be conducted outside of Ireland. This was done by the insertion of a clause which placed an upper limit on the price that could be submitted by tender – any tender received which quoted a price over the limit would be excluded. When I carried out some basic costings using the minimum Irish wage rate and industry standards for data entry the base cost, without any overhead or mark-up exceeded the limit imposed by the tender, so a business like my own, using Irish Staff was immediately excluded from the tendering process.

The usual response

Any Irish company submitting a tender would have to have the actual work carried out in one of the low cost economies most likely the Philippines or India. Not one iota of a contribution from this work would be made to the coffers of the state and not one Irish job would be created or maintained and this at a time when we have 400K people on the live register. When I brought this to the attention of our politicians, I got the usual response, highly indignant of the situation, need to make changes etc. etc.

This morning I downloaded the documentation for a tender for the provision of contact management services to the Commission of the Energy Regulator. This is something that is right up our street as we provide this type of service to a number of large multi nationals and Irish companies already and we excel at it , constantly exceeding customer SLA’s and expectations.

As a relatively new business only trading for 4 years we are anxious at this stage to break into the public sector area where we believe we can replicate the service levels we already deliver to our existing customers. We meet all of the criteria in relation to equipment, software expertise and experience; however there is a restrictive clause in the tender which excludes companies that have a turnover of less than €500k over the past 3 years. Now I am of the school of thought that believes that Turnover is for Vanity and Profit is for Sanity.

Profit and cashflow

The important financial measures for any business in my humble opinion are Profit and Cash Flow and strength of balance sheet. My staff and I have spent the last 4 years building up our business into a profitable (albeit small) business. We have an excellent cash flow, little creditors, are fully tax compliant but we don’t have a turnover of €500k for the last three years we were close to it but not close enough. So we find ourselves discriminated against because of our size.

Currently we supply similar services to a number of multinational companies operating in the White Goods and Pharmaceutical Industries, these companies are extremely discerning about their customer service levels and their brands , yet they entrust us with handling all of their calls in Ireland, why? Not because of our turnover or our vanity , but because we deliver quality service.

So next time someone tells you that size doesn’t matter – Don’t believe them it does when you are a state organ(isation).

Post by Tony Clarke, Kendlebell Naas. Kendlebell Naas provide contact management services to businesses and organisations throughout Ireland who know how to measure quality.

 

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Wednesday, 21 November 2018
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