Thursday 18 July 2019

Investing in training is always money well spent for any firm

Adapt or die: Training fulfils a critical role in any business. Photo: Stock photo
Adapt or die: Training fulfils a critical role in any business. Photo: Stock photo

Feargal Quinn

Q: The business sector I operate in runs on tight margins, as it is extremely competitive. I am reviewing my training budget and am considering minimising this for the next number of years in order to add to the profitability of the business. Is this wise?

A: You are certainty smart to be raising the question about any cost inputs in the business, and it is valid to question if you are getting value for money in this area. There have been lots of new developments with technology, especially through eLearning, and perhaps part of your question needs to be not alone about the amount of training you are doing, but the mechanisms that you are using to deliver it.

From my own experiences over the decades in Superquinn, my view has always been that training fulfils a critical role in any business. I can recall at one juncture in the business history when our competitors in the marketplace were extremely aggressive and we were finding it difficult to make a profit, we considered reducing our training.

I took the view that we would in fact invest more in training even though the numbers didn't justify it. To our surprise within six months of implementing this strategy, our sales and profitability started to rise. We were able to deliver better service than our competitors and slowly but surely customers recognised this and started to migrate towards our business.

It is always easy to view training as an area that it is easy to cut budgets in without any consequences. The reality is that with most topics, people need constant refocusing and retraining every six or 12 months. I find myself critical of some establishments I visit in more recent times, where newer staff don't seem to be given proper induction training and are uncertain about what to do as they are tasked with serving customers on day one with little or no practical experience.

Q: I produce my own beer at home as a hobby and have become very skilled at the process. I was considering starting my own brewery and was looking for some advice.

A: Craft brewing has become very established in Ireland over the last decade. Almost every county has at least one craft brewery. We have also seen a change in consumer behaviour in that there is now a sizeable group of consumers who like to experiment with new styles of beer.

I was chatting with a beer distributor to pubs recently who described the traditional Irish drinker as someone who went to the pub and drank one beer brand all evening.

He had contrasted this with a new, but growing cohort who are happy to have three or four different brands or styles of beer on a night out. Some of the early mover craft brewers in both Ireland and internationally have had very big success. One could argue that they are probably no longer 'craft' beer as their volume is so large.

However, listening to some of the craft brewers, there also seems to be some trouble on the horizon. A number of craft brewers have closed over the last24 months, with rumours of others in difficulty.

It would appear that there will always be a market for a local craft beer within a county or a region.

Consumers there seem happy to support the product and there is some sense of pride in having a local beer produced in the region.

In the majority of cases, however, this is not enough volume to build a business on and any new craft brewers need to ensure that they expand beyond their local region as fast as possible.

Therein lies the problem. Most of the large centres of population, like Dublin, are now saturated with craft beer and it is increasingly difficult to get listings in pubs, off-licences and supermarkets.

Export markets certainly offer potential and Bord Bia has some very good knowledge in this area and you should speak to them.

It goes without saying that if you have any chance of succeeding with this project, you will need an exceptional product, with exceptional branding and a robust brand-building strategy.

There are some signals to suggest that that might not even be enough.

You need to research your idea carefully as there are some troubling signals in the marketplace.

Send your small business questions to himself@feargalquinn.ie

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