New Engineering Office

Dubsey

Hi all,

I’m hoping for some pearls of wisdom…

I have been working as a senior engineer providing consultancy services for 10 years now with a large multi-national and multi-discipline (e.g. mechanical, electrical, health & safety, etc. services) engineering company.

It has been a great job but it is time to move on for a number of reasons.

I am in discussions with a UK based company who are interested in opening an office in Dublin and would like me to be the person to do that. They are a company providing specific consultancy services in line with my area of expertise and have 5 offices in the UK with approx. 50 staff. The company is 7 years old.

I am being offered and Associate Director position and I feel really positive about the move. The guy also indicates that he will soon be offering share options to directors which I will hopefully be in the not too distant future all going well.

We would be opening a virtual office initially and then renting an office when we are ready to employ staff.

My eventual plans would be to start my own company and I feel that this would be a great stepping stone towards that and will allow me to be exposed to all of those things that running an office and being the person in charge brings (HR issues, tax, etc.).

Having never opened an office before (I will obviously be getting support from the guy who owns the company) or changed jobs with that bit more to loose (have 2 kids and a sizeable mortgage so the pay slips need to keep coming), I was hoping for some advice in line with the following two questions:

1. What background information should I be looking for to confirm the financial position of the current company and ensure I’m not joining a company who are in difficulty? Can I find out this information anonymously? Note it is a UK company.
2. What main things will need to be done here in Ireland to set up and run the company (registering with the CRO, accountant?, etc?).

Many thanks for any information/assistance.

Regards,

PARlance

1. A company search is free in the UK https://beta.companieshouse.gov.uk/
I don't think it's necessarily a bad idea to ask that same question to the owner, maybe ask for recent management accounts (the filed accounts could available above could be up to a year old and a lot can happen in a year). Asking will show you're doing your homework on what is a big move, I wouldn't be put out by you asking... I would almost expect it.
2. Surely they are going to handle that side of things? If not, you're almost a partner rather than an associate director.

antoinolachtnai

It sounds like a great opportunity.

First thing is, this is business you are in now, not engineering. You are basically into a field that you know very little about. You can learn, certainly, but you have to be extremely careful and make sure you can get the help you need.

You really need to find out a lot about this company. Part of this has to be a polite but slightly blunt conversation with the company. Most importantly, you have to make sure that they have enough money to fund opening and building the Ireland office. This is something you can discuss without it becoming invasive or personal. You need to talk about how much this will cost and how long it will take to get profitable. Just remember, that you are becoming a business person now, and you have to establish a business relationship. How you and your prospective boss handle the conversation is really important.

You could get a Dun and Bradstreet report on this company. I have not done this for a long time, but check this website, or ring their office in Dublin. https://creditreports.dnb.com/m/home You could get information from other people in the industry.

I am concerned that he is holding out the possibility of share options at some point in the future. There are a lot of practical problems with owning share options in a closely held (not public, small number of shareholders) company like this. His gesture is basically meaningless and I am concerned that he said this when he must know that this is a very difficult thing to do in a meaningful, practical way. You really need to investigate this issue more and it will give you an opportunity to understand the company better.

You really need to have a desk somewhere from the outset of your contract with this company. This can be in a co-working space, and you may not even go there much, but the business needs an address, and the business needs to pay for it. This is symbolic of their commitment as much as anything else.

You need to understand whether they want you to be a director of the Irish company (because of Brexit they will almost certainly want to incorporate here) because this brings certain responsibilities. On the whole, I would avoid being a director if I were you but it really depends.

The practicalities of setting up a company or operation in Ireland are something that you and your employer will mostly outsource to specialists. You should not be spending a lot of time doing it, for the simple reason that you should be out doing sales and satisfying customers. Setting up the sales and delivery teams are by far the hardest and most important things you need to do.

You and the principal need to have a clear understanding of what sales responsibility you have, specifically what volume of business he is expecting to come in and where the leads and sales are going to come from.

davindub

Dubsey wrote: »

Hi all,

I’m hoping for some pearls of wisdom…

I have been working as a senior engineer providing consultancy services for 10 years now with a large multi-national and multi-discipline (e.g. mechanical, electrical, health & safety, etc. services) engineering company.

It has been a great job but it is time to move on for a number of reasons.

I am in discussions with a UK based company who are interested in opening an office in Dublin and would like me to be the person to do that. They are a company providing specific consultancy services in line with my area of expertise and have 5 offices in the UK with approx. 50 staff. The company is 7 years old.

I am being offered and Associate Director position and I feel really positive about the move. The guy also indicates that he will soon be offering share options to directors which I will hopefully be in the not too distant future all going well.

We would be opening a virtual office initially and then renting an office when we are ready to employ staff.

My eventual plans would be to start my own company and I feel that this would be a great stepping stone towards that and will allow me to be exposed to all of those things that running an office and being the person in charge brings (HR issues, tax, etc.).

Having never opened an office before (I will obviously be getting support from the guy who owns the company) or changed jobs with that bit more to loose (have 2 kids and a sizeable mortgage so the pay slips need to keep coming), I was hoping for some advice in line with the following two questions:

1. What background information should I be looking for to confirm the financial position of the current company and ensure I’m not joining a company who are in difficulty? Can I find out this information anonymously? Note it is a UK company.
2. What main things will need to be done here in Ireland to set up and run the company (registering with the CRO, accountant?, etc?).

Many thanks for any information/assistance.

Regards,

You could look at profit and loss for the last number of years and balance sheet. Accountants/ Investors use a number of ratios like gearing to measure the risk of the company. They seem to be growing which is good, they are getting funds from somewhere, which means someone trusts their financial statements, but there is always a risk of overtrading. This can be done anon., I wouldn't ask too many financial questions of parent company beyond what funding is available, but if you get a chance to meet with the financial controller, ask away, but make sure they are sensible questions you understand.

What I'd recommend is you get an accountant to be your virtual office, set up the company and maintain it. Also get them to do your bookkeeping and payroll, financial controller - cheaper than hiring anyway. Also you will need to look at company structure, etc. To much to consider to go into here. PM me if you need a recommendation.

Telephone and fax can be virtual numbers to connect to an office in the UK to save reception costs as well. All this helps you focus resources on revenue generating activities, it can be a real drain on your time to implement structure, procedures and respond quickly to financial or admin issues.

daithi7

Rather than share options in a private company, incentive schemes are often done as a profit sharing scheme. You should probably query the promoters original suggestion , as in 'how would that work?', while suggesting a profit share as a simpler alternative.. you might want them to propose something up front on this, even if it only kicks in after 6 months , or a year say.

ironclaw

daithi7 wrote: »

Rather than share options in a private company, incentive schemes are often done as a profit sharing scheme. You should probably query the promoters original suggestion , as in 'how would that work?', while suggesting a profit share as a simpler alternative.. you might want them to propose something up front on this, even if it only kicks in after 6 months , or a year say.

I'd add to this an exact break down of what figure is used to calculate this. With the uncertainty of Brexit, you could have a UK firm closing sales here but marking them as 'UK sales' for the purposes of a bonus calculation meaning they don't relate to 'Irish profit'. Or if by some miracle the UK works out cheaper, they may close sales there. Your company in Ireland could technically never make a profit with creative accounting.

I'd be careful OP, they seem to be placing an awful lot of responsibility on someone who has no prior experience in this particular aspect of company formation.

Dubsey

Hi all,

Thanks for the helpful information.

"I'd be careful OP, they seem to be placing an awful lot of responsibility on someone who has no prior experience in this particular aspect of company formation."
Thanks for the word of caution ironclaw but they haven't suggested I will have to do any of the office set-up - it's more me doing a double check as it will be their first office set-up outside the UK plus my own interest in learning the ropes in this area.

Comments regarding the share options noted. For me I will be ensuring that I am happy with the basic salary plus benefits.

So, I've had a look at the company information available on https://beta.companieshouse.gov.uk/ and the following are the items of note:
- Private limited company,
- The MD owns 80 shares while his wife owns 20,
- There is a registration of a charge of a bank. Presumably this is a loan?,
- There is another charge that appears to be a mortgage,
- The MD is an active director of 2 other companies,
- See attached financial info for 2015:
--Fixed assets increased. Could relate to property and setting up an office at the time.
--There was a significant amount of money due.
--Modest sum of cash in bank/in hand.
--Decent amount of money to be paid.

Any further feedback welcomed.

D.

PARlance

No massive alarm bells ringing there but they're certainly not the multinational type company you're leaving. I would consider their move over here a fairly aggressive one, one that they would need it to start paying for itself relatively quickly.

If they're a relatively new company and had a good 2016 (grew profitability past 120k, got a handle on debtors etc) then I would be excited by such a prospect.

But I would look to get a better understanding if I was you. Financial statements are just a snapshot and this snapshot is 14 months old now.