Bread and butter

Apr 01, 2019
Chartered Accountants have a vital role to play in guiding Northern Ireland’s thriving SME sector through uncertainty and chaos.

As a Chartered Accountant, I am very proud of the role I and my fellow Chartered Accountants play in supporting the growth and development of home-grown businesses in this part of the world. To celebrate the success of the small business community in Northern Ireland, which constitutes over 99% of the local business sector, Harbinson Mulholland – the business advisory firm and my employer of 17 years – recently recognised the top fifty ‘bread and butter’ firms at a special event at Titanic Belfast.

The breakdown

The league leaders were identified through research carried out by Ulster University Business School using the European Union (EU) definition of a small- and medium-sized enterprise (SME), which is less than 250 employees and turnover of up to £50 million.

The results confirmed that entrepreneurial spirit is alive and well in Northern Ireland, which boasts more home-grown businesses per head of population than Wales, Scotland and all regions across the north of England. Almost 75% of them operate in just three sectors – manufacturing, construction and wholesale/retail. Twenty are based in Co. Antrim (five in Belfast alone), 10 each in counties Tyrone and Down, eight in Co. Armagh and one each in counties Derry/Londonderry and Fermanagh.

Altogether, the companies earned just over £100 million in operating profit in their last reporting year on a turnover of £1.6 billion. Just under £170 million was paid out in wages to over 5,700 employees and 32 out of the 50 businesses are family-controlled. In the three leading sectors, 14 businesses were involved in construction, 12 in wholesale/retail, and 10 in manufacturing. Eight of the top 50 were involved in food production and distribution, six in car sales, and four in shop-fitting and joinery. Only two companies were in the information and communications technology sector and there were no SMEs in the hospitality or creative sectors. 

Unique challenges

Fellow practitioners will be all too aware of the challenges that are faced by this sector. Some of these challenges are unique to those located in Northern Ireland, such as the ongoing lack of a devolved government. Indeed, the inability to appeal to a local government and campaign for initiatives that will benefit these ‘bread and butter’ businesses is an ongoing source of frustration.

Meanwhile, ongoing UK initiatives such as auto-enrolment for pension schemes means that the minimum employer pension contribution rate increases a further 1% to 3% from April 2019. Added to this, at the time of writing the ongoing state of flux with regard to Brexit provides further challenge.

New technologies have enabled finance teams to move from what has traditionally been perceived as a data gathering and compliance role to a data analysis role. Our members in this sector are central to the development of strategy within their respective businesses. Within this sector in particular, the finance team has the opportunity to work in tandem with internal growth strategists; they have the skills necessary to analyse and establish key financial goals and assist in the formulation of plans that will achieve these goals.

Navigating change

Despite the challenges faced by this sector, it continues to grow and thrive. As practitioners, we wish to work alongside our clients and provide relevant guidance to help them navigate their future challenges and opportunities. Chartered Accountants are uniquely positioned to understand a variety of areas – not least regulatory change – and interpret these changes on behalf of our clients while helping them refine their commercial responses.

Northern Ireland’s business owners face many challenges, from tax planning through to the fallout from Brexit. We, as Chartered Accountants, must continue to make it our business to help interpret and respond to these challenges – whatever they might be.

Angela Craigan FCA is a Partner with Harbinson Mulholland, the accountancy and business advisory firm.