Pat McDonagh is one of Ireland’s most successful and respected business leaders. His flagship enterprise, Supermac’s, currently has a turnover in excess of €83m and has over 2,500 employees working across almost 100 branches. Today it serves an average of over 320,000 customers per week.
In the second instalment of his exclusive JOE.ie column, Pat talks about how lack of governmental support and local authority red tape are choking business growth.
While many aspects of doing business in Ireland have remained the same in the 32 years since we got started, there are a range of new challenges – increased regulation and red tape being chief among them.
Costs have increased dramatically compared to when I started out in business. Rates have been around for a long time but now there are waste licences, waste charges, effluent licences and effluent charges. There is also B.I.D.S. charged by some local authorities. This is imposed on businesses where improvements are made on a street, like Christmas decorations on O’Connell Street in Dublin, and then the businesses on that street are charged for them.
As well as the additional costs involved, negotiating the mess of red tape can be extremely time-consuming. You have to be on top of your game to even keep compliant. Some regulations are necessary – some aren’t. They’ve simply gone too far.
For example, the Central Statistics Office sends out surveys on a regular basis which are compulsory and consume a lot of valuable time, but the findings never see the light of day afterwards.
I think a lot of this regulation has come as a result of people attempting to justify their jobs. We’ve got to a stage where a lot of the local authorities are self-financing but despite the downturn, very few are letting people go.
As a result, we have a situation where they are finding work for people to do instead. Because they are unwilling to let people go, they have to keep introducing new ways of making money.
If a business was to operate like a local authority or indeed the Government, it would be finished in months. It couldn’t sustain itself.
Two months ago I submitted an application for a pizza delivery operation. There were no objections, but it was still refused. It was turned down for two reasons – on the grounds that it would cause an odour and because the council didn’t want that type of development in the area where we had the premises.
For a start, there isn’t any odour produced from a premises which bakes pizzas. Secondly, the planner pointed out that there was a new development with retail units going up nearby and suggested we use that instead.
The problem there was that we already had an empty premises, so it would make zero sense to try to sell it and then purchase a new unit.
This, of course, wasn’t a one-off. Eight of our last 10 planning applications have been turned down. It begs the question – why bother investing in Ireland?
The Government could do a lot to reduce the red tape small and medium businesses are faced with. There are a lot of small business owners out there working extremely hard to keep on small teams of staff. The government don’t give as much credit to local, small business as they do to the larger multi-nationals and there is little encouragement or help from any area of the civil service for this type of employer.
