The Big Red Book is in the black and now eyeing up overseas opportunities
Growth is the biggest focus, with costs also on the line
Published 04/03/2010 | 05:00
THEY'VE been a costly headache for most businesses, but for The Big Red Book yo-yoing VAT rates and unusually frequent budgets take on a different complexion. "That's all good for us, whatever new rules they bring in will help us," smiles Marc O'Dwyer, who took over the accountancy software firm in 2000.
O'Dwyer has every reason to be in good form. As the economy began to lurch downwards, his company grew sales by 17pc and profits by more than 40pc over the year to January 2009.
And figures just gone to the auditors show The Big Red Book managed to maintain those higher numbers for the year ended January 2010, despite the country's descent into deep recession.
The Government's penchant for frequently rejigging the business playing field is just one of the aspects of this recession that's playing out well for O'Dwyer's company.
In boomtime, The Big Red Book sold most of his packages to start-up companies, but "towards the end of 2008" a new customer began emerging.
"One area is people who had been using paper based systems and realised they were having difficulties collecting their debtors, so now they're investing in an accounting software system," says O'Dwyer.
"The second area is people who had been using more expensive software who are now downsizing to ourselves."
Positioning themselves "at the S end of SME", The Big Red Book is also doing a booming trade with redundant workers who are branching out into business themselves, aided by a deal with Bank of Ireland that gives new start-ups a free trial of the software.
The economic backdrop has also forced O'Dwyer to revisit his pricing structure.
When the marketing graduate took over the loss-making Big Red Book, the first thing he did was increase the prices and cut out the extras, but now he's had to take the opposite tack.
A year ago, companies would have paid €899 to buy a Big Red Book software package, plus €192 for support over the first year. Now, companies pay €799 for the same software with a year's support included.
O'Dwyer has also introduced "rental" packages, where instead of paying hundreds of euro to buy the software up-front companies can rent it from €35 a month.
The pricing changes mean The Big Red Book has to sell more packages just to keep revenue stable, and the company has been aggressively pursuing new ways to bolster sales.
The most visible one is The Big Red Book's decision to sponsor a task in TV3's The Apprentice, giving the company its first taste of national exposure, but there's been plenty going on behind the scenes as well.
After upping the prices, the second big change O'Dwyer made when he came into The Big Red Book was to introduce a payroll product. Since then The Big Red Book has added a range of other SME products.
O'Dwyer sees potential for The Big Red Book to buy companies that sell complimentary software packages.
"We want to become the only company an SME has to deal with for software," says O'Dwyer, who adds that The Big Red Book has the cash to buy assets that might come up.
The Big Red Book is also investing heavily in a "cloud" system of its software that would allow customers to access the whole suite of tools online.
International markets are another growth aspect of the plan. The company does some business in the UK and O'Dwyer sees potential for this to grow, potentially with a physical UK office.
"The next market is Australia," he says. For that, The Big Red Book would need a local master distributor and a functioning cloud system that would help them cover the vast territory.
"We could do it by 2011, we're already talking to Enterprise Ireland in Australia", says O'Dwyer.
While growth is clearly the biggest focus, The Big Red Book has been focusing on the cost line as well.
The packaging for The Big Red Book's software has been dramatically reduced, with the manual included in CD form rather than hard copy, delivering on savings in printing and postage, as well as a better carbon footprint.
O'Dwyer also applied substantial wages cuts across his 17 staff last year, though that was a temporary measure aimed at ensuring that a €682,000 Business Expansion Scheme (BES) fund could be repaid on time in 2009.
He succeeded in repaying on time, and the investors rewarded him with a fresh injection of €685,000 which will be used to fund the cloud development and international expansion.
"There are opportunities out there now," says O'Dwyer, "and we'll be taking any we can find."