High Potential Prospects - Enterprise Ireland · 2016-02-26 · Enterprise Ireland is responsible for supporting High Potential Start-Up (HPSU) Companies. HPSUs are start-up businesses

High Potential Prospects An Amárach Survey of HPSUs for Enterprise Ireland

Final Report: February 2016

Enterprise Ireland is responsible for supporting High Potential Start-Up (HPSU) Companies. HPSUs are start-up businesses with the potential to develop an innovative product or service for sale on international markets and the potential to create 10 jobs and €1m in sales within 3 to 4 years of starting up.

In late January/early February 2016, Amárach surveyed just over 200 HPSUs (a combination of those currently receiving support or recently in receipt of support).

This report summarises the findings from the survey, based on a total of 80 completed responses.

• 9 in 10 HPSUs will their staff levels in 2016, higher than in 2015. • 6 in 10 HPSUs expect to grow substantially this year. • More than half of HPSUs are benefiting directly from Ireland’s economic

performance. • The main barrier to growth is access to talent (for 55% of HPSUs),

followed by competitive pressures and regulation/compliance requirements.

• More HPSUs find it easier to access finance (26%) than more difficult (19%) at present.

• The main export markets for 2016 will be the UK & EU. • 8 in 10 HPSUs see growth coming from new clients, while three quarters

expect to grow by launching new products. • 1 in 5 HPSUs is run by a woman, among whom 47% feel it is getting easier

for women to start businesses, the balance see no change.

Key Findings

85% 89%

15%

3% 8%

2015 2016

Yes No Don't Know

Job Growth

Source: Amárach survey of HPSUs, February 2016

There is an extremely positive dynamic among HPSUs in relation to job creation – with a strong performance last year to be followed by a stronger performance this year.

Q. Did you increase your staff levels last year (2015)? Q. Will you increase your staff levels this year (2016)?

60%

36%

3% 1%

Substantial growth Modest growth No growth Decline

Growth Outlook


The vast majority of HPSUs expects to achieve substantial growth for their businesses in 2016, in turn driving job creation.

Q. How would you describe the growth outlook for your business this year?

55% 35% 34% 29%

14%

8% 5% 16%

31%

57% 61% 55%

Access to staffingtalent

Pressure fromcompetitors

Regulations andcompliance

requirements

Access to suitableworking/office space

More difficult Easier No change

Growth Barriers – I


While HPSUs have been successful in increasing staff levels and are keen to do the same again this year, getting the right staff remains their biggest barrier to growth.

Q. Is each of the following getting easier or more difficult for your business, or remains unchanged:

28% 19% 15% 13%

39%

26% 21% 21%

33% 55% 64% 66%

Securing customersales

Access tocredit/funding

Business conditionsin your export

markets

Engagement withstate enterprise

supports

More difficult Easier No change

Growth Barriers – II


Access to funding and credit is a constraint for relatively few HPSUs, with more saying it is getting easier than more difficult.

Q. Is each of the following getting easier or more difficult for your business, or remains unchanged:

Market Focus – I


The vast majority of HPSUs are focused on a combination of UK, domestic and other European sales, though a substantial proportion are looking further afield.

Q. Which markets will you sell to in 2016?

85%

76% 70%

55%

41%

UK Ireland Europe USA Other

Market Focus – II


Given the importance of the domestic market to the majority of HPSUs, we find that more than half are directly benefiting from economic recovery.

Q. Is the wider performance of the Irish economy:

54%

4%

42%

A positive influence on yourcurrent business performance

A negative influence onperformance

Makes no difference to yourbusiness

Growth Opportunities


Most HPSUs expect to secure growth this year through a combination of sales of existing products to new clients as well as the launch of new products.

Q. Which of the following is a major opportunity for your business in 2016?

80% 74%

69%

55% 53%

39% 31%

Winningnew clients

with existingproducts

Launchingnew

products &services

Enteringnew markets

Additionalfunding to

growbusiness

Exports toexistingmarkets

Digital salesgrowth via

web or apps

Securingpatents/ IPfor business

Female Entrepreneurs


One in five respondents to our HPSUs survey was female – of these, nearly half feel it is getting easier for women to start & grow businesses.

Q. Are you male/female? % female Q. Do you feel it is getting easier for women to start and grow businesses like yours, getting more difficult or it remains the same as before?

19%

47% 53%

0%

% Female Getting easier Remains the same Getting harder

Self Employed – I

Q. In a few sentences, what is the best thing about running your own business?


“Having control over your own destiny. An ability to come up with an idea and see it through to completion.”

“The pride of working with a team in knowing that our product is helping people in a number of countries spread across three continents.”

“It is satisfying being the reason that people get up and come to work in the morning. There is a real sense of achievement watching the company grow.”

“The rush of creating wealth, employing people and the constant challenges that appear that need to be solved.”

“It is fantastic to build something of value that customers are willing to pay for. It is great to be in a position to take advantage of opportunities that we see in technology

and the marketplace.”

Self Employed – II

Q. In a few sentences, what is the worst thing about running your own business?


“Stress of startup and not having the support of a big balance sheet. Its a 24/7 365 day thing so you never get to switch off. Responsibility is greater.”

“Ireland has the worst personal consequences for entrepreneurs whose business fail (new companies act is most anti-entrepreneur in Europe). The financial uncertainty.”

“Not having access to the resources needed to grow at the speed that you know you can. Its a balancing act for the first couple of years.”

“Lack of Tech Talent. It's practically impossible to find good talent. Difficulty in securing funding. Attitude and poor enterprise culture.”

“Can be a lonely place when faced with difficulties. Decisions you make can ultimately make or break some deals & you must live with the consequences. Motivation can be

challenged and it takes will power to maintain a focused drive.”

Self Employed – III

Q. If you had to do it all again, what would you do differently with regard to your startup business?

“Hire very cautiously, making sure that the right person with the right skills was hired for every position. Spend less time raising money & more time building right product.”

“Very little. All start ups need to work hard & have confidence that they are on the right path.”

“I would introduce KPIs and evaluation metrics for all employees at an earlier stage.”

“I might not start up at all. The tax system is ridiculous, PAYE workers take way less risks, generate way less jobs yet entrepreneurs are taxed as bad or worse. There

should be a separate and lower band for people who take risks.

“I would have taken more advice from mentors and put more time into developing a strong advisory board and also our board in general.”


Our research shows that Enterprise Ireland supported High Potential Start-Ups are contributing significantly to job creation and general economic growth in Ireland.

They anticipate strong growth in the year ahead, across a range of markets driven by a combination of new customer sales and new products & services.

There are, however, significant barriers in the way of further growth and employment: in particular finding & recruiting the right people – though funding is less of an issue than before.

Nevertheless, the survey shows that HPSUs will continue to play a key role in driving the success of Ireland’s start-up sector in 2016.

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Documents

High Potential Prospects - Enterprise Ireland · 2016-02-26 · Enterprise Ireland is responsible for supporting High Potential Start-Up (HPSU) Companies. HPSUs are start-up businesses