22nd November 2023
MCE Managing Director, Paul McErlean, writes in his monthly Irish News column…
Some of the most interesting people I know are accountants. And I don’t just mean in business terms, I mean in life, too.
About two months ago, I was at a reception hosted by BGF, the private equity fund that has transformed a number of our fastest growing and most successful businesses here with over £50 million invested in the likes of RiverRidge, Bob & Berts, Braidwater and a few others.
The room had plenty of accountants in it, mostly working in the fund-raising and investment side of the discipline, known as corporate finance. At the event, I was introduced to Brendan McGurgan who I’d heard of, but never met before.
It turns out Brendan, like me, is a St Pat’s Armagh man but he’s best known as the former CEO of one of our most outstanding fast-growth businesses, CDE Global. And now he’s the co-founder, with Claire Colvin, of a business called Simple Scaling and the co-author, again with Claire, of an excellent business book of the same name. The book’s subtitle is: '10 proven principles to 10x your business’ and the clear aim of the book is to provide a simple methodology for SMEs to grow to scale.
I was at another event last week, this time a dinner organised by the NI Chamber of Commerce with three permanent secretaries and the head of the Civil Service Jayne Brady. These events are ‘in camera’ so the content of the discussions is not for public consumption, but I can say that there was lots of talk about cuts to the Northern Ireland budget.
Not at any point in the formal part of the discussion was it raised that one of the possible ways to escape these cuts was to produce more tax revenue by growing the economy here. It seems simple to me: we accelerate growth in the economy and in doing so, the companies that have grown quickly produce more profits and therefore pay more corporation tax. The tax revenues go to the Treasury in London and with greater revenues coming in, there is less pressure to cut funding. I know some senior civil servants, if they read this, will roll their eyes, and perhaps say something along the lines of ‘if only life was that simple’ but that is one of the advantages of writing your own column, I get a chance to state my opinion. The Irish News will, no doubt, consider publishing any letter in response!
Here’s another opinion: if the current Civil Service was to prioritise the biggest structural economic hurdle we have, the planning system here, I know of about £1bn of immediate investment that would flow into this economy. That might only represent about £50m of additional tax revenues in year one, but it would be a start and it would help change the very negative reputation this place has for getting projects, with any sort of significant property element, delivered efficiently and in a reasonable timeframe. Joe Kennedy’s recent work is laudable and very welcome, but we need to fix some things at home urgently. In the case of planning, the cost of fixing it would be zero. The upside is worth billions.
I’d say the tax revenue issue sprang to my mind because two days earlier I’d been to Brendan and Claire’s brilliant Scale X Summit at the ICC in Belfast. Over 500 paying customers were there to hear top-level speakers from around the world talk about scaling business and what’s required to make that happen.
Of particular importance was Vision. The sessions on Vision and creating a Vision with Purpose were inspirational to all, I’m sure. They certainly gave me a lot to think about. The context, and opportunity, for scaling businesses was set in a Deloitte report for an organisation called the Scale-Up Institute which states that if the number of UK scale-up businesses rose by just one per cent, then 150,000 net jobs and an additional £225bn in GDP would be created by 2034.
In local terms, that’s an extra £4bn and nearly 3,000 jobs. The number of SMEs which do manage to scale (i.e., grow the way CDE Global did from 15 people in mid-Ulster to 700 people across six continents) is tiny but after the Scale X summit, maybe it will be quite a few more here, particularly for those who choose to go through Simple Scaling’s Scale X Accelerator Programme in the coming years. I’m giving it serious consideration.
I think our permanent secretaries and politicians, if they ever come back, should get some coaching from Brendan and Claire too. Agreeing a Vision with Purpose for the economy here would be a good starting point. It’s time for more SMEs, and the economy here generally, to get onto a scale-up journey. The opportunities are immense.
And just to say in conclusion, Brendan, inspired by his dad, started his career by qualifying as . . . you've guessed it, a chartered accountant.
Photo credit: The Irish News