The Sunday Times
Companies born in the economic boom are having to change practices to survive in a downturn, writes Sandra O’Connell, The Sunday Times
If any business person had their finger on the pulse of the recent economic boom it was Emmet O’Neill. Whether it was teeth whitening, Botox clinics or hip new restaurants, the entrepreneurial nephew of Denis O’Brien, the telecoms billionaire, built an empire by spotting gaps in the market and filling them.
He now owns or co-owns the outlets in the Smiles chain of dental clinics, a beauty spa called Fab and the restaurants Bocca and Five. So if anyone should know how businesses born of the boom might fare after it, he should.
“How to cope with a downturn is something we have been addressing,” said O’Neill. “Particularly with teeth whitening, which is price-sensitive. We needed to know how to compete when beauty salons can offer, on paper, the same service and not have to pay dentists.”
His response was to turn the Smiles clinics into full-blown dental practices, offering a complete dentistry service. He has opened an orthodontic clinic in Dublin.
So where whitening accounted for 90% of Smile’s business, it now accounts for 15%. “People like the fact that the clinics are price transparent,” he said, “So you know exactly what you are going to have to pay. All the clinics are working flat out.”
The prospect of an economic slow-down has changed other business practices. “We have dedicated this first quarter to an efficiency drive,” said O’Neill. “We want to find cost savings, because when you are setting up and growing it is easy to take your eye off the ball. We want to make sure we are not paying suppliers more than we should be across all our businesses.”
A changed environment is already discernible, he reckons. “You don’t see so much of the guy who buys three bottles of champagne to impress his friends. But people will still want to go out to dinner.”
“Equally, in the beauty end, sales of Botox have fallen off, but there is still great demand for more down-to-earth treatments,” he said.
Service businesses of the kind that flourished during the boom may now be most at risk. “If you look at redundancy figures for the last year, the increases were higher for the service sectors than for manufacturing,” said Patricia Callan, director of the Small Firms Association.
“It means all those businesses that benefited from SSIA (special savings incentive accounts) money and greater spending generally will have to work towards making themselves indispensable. They must ensure they fully understand trends in their market, such as changing age profiles or nationalities, if they are to survive.”
Paul Davis of Davis Business Consultants, which specialises in turning around ailing businesses, says the key to survival is innovation.
“Businesses set up during the past decade to cater to an economically booming market need to start thinking fast about re-engineering their business to provide ancillary or complementary services that will appeal to the current market,” he said.
“And they need to do it fast. Those that procrastinate on this are the ones most likely to fail.”
Carl Cautley, who set up Fitness Together, his personal training business, last April, remains confident regardless of what the economy does, he believes that the benefits of having a personal trainer will sustain the business through leaner times.
“The past few months have been our best yet. We now have waiting lists for our premium time slots. There is still disposable income out there. How people spend it depends on their priorities, and health is a priority.”
The studio is currently operating to 85% capacity and he plans to open two more this year, before rolling out the franchise nationwide with a minimum investment of between €150,000 and €200,000 per unit. “We devise a programme for each client depending on what their specific needs are, ranging from getting fit for a winter skiing holiday to losing a specified amount of weight,” said Cautley, whose prices start at €55 a session.
Shirley Lane, a personal stylist, is similarly upbeat. Although only 24, she owns Modelmom, a maternity wear outlet in Cork. Her main business priority now, however, is image consulting, for which she charges €500 a day. “It’s establishing what a person should or shouldn’t wear to make the best of themselves,” she said.
Most of her business comes through referrals and, rather than worry about a possible downturn, her next move is to structure the business to cope better with her success. Right now demand is such that Lane, a solo operator, works an 80-hour week.
“My focus now is on moving the business to the next stage and taking people on and training them up so they can do it, too,” she said.
An even newer concept to Irish shores is companies providing life coaching, Jane Downes set up such a firm Clearview Coaching Group, in 2005.
“A life coach helps a person to provide a sharp focus for what is and isn’t working in their lives, helping them establish what it is they want to make happen in their lives so they can achieve it,” said Downes.
She says that it attracts a variety of clients, from “a busy working mum who needs more ‘me time’ to someone facing retirement and trying to establish exactly what he want to achieve from it”.
“People don’t like to talk about being in counselling, but they are happy to talk about getting life coaching because it is seen as a positive step,” said Downes.
She charges €425 for a four-session course. “In terms of expenditure, life coaching is not seen as a treat like getting your nails done. It is very firmly viewed as investment in yourself. It’s about life, so I’m not worried about the economic outlook,” she said.
Neither is John Butler, despite having a chauffeur and valet business aimed at an upmarket clientele. He set up Gentlemen in Waiting as the boom was taking off 10 years ago by chauffeuring some of the country’s wealthiest individuals, and best known names, around the country.
“I have just taken receipt of two new €140,000 cars, so obviously I am optimistic. This country is still awash with money,” said Butler. “My private clients all come as a result of recommendations and, in relation to corporate clients, big companies don’t change for the sake of change. They stick with what is tried, tested and trusted, which is what we are.”
Concierge Ireland was set up by Aphria O’Brien in 2000 doing all sorts of jobs, from providing witnesses for weddings and renovating apartments to buying show and sporting tickets and organising events.
The business employees two people full-time and has a network of 75 people around the country paid on a per job basis.
“The economic environment has already changed for us in that a lot of our corporate business comes from the pharmaceutical sector. Changes in regulation there have cut down on the amount of hospitality they undertake, which has affected us directly,” said O’Brien.
“The way we survive is by being small and flexible enough to adapt to changing demands, finding new services to deliver. As long as it’s legal and decent, we’ll do it. People will always place time over money, so there’ll always be work for us.”
https://www.davisbusinessconsultants.com/business-mentor/one-to-one-coaching/