Module 5 assesses the practicalities of restarting and establishing another business.

1. MODULE 5:
Practicalities of
establishing
another business

2. In this module,
you will:
o Learn how to rebuild
trust, your reputation
and relationships
o Build an even stronger
brand than before!
o Review the different
forms of business
entity and choose
which one is best for
your new business

3. Rebuilding Trust
For many entrepreneurs seeing a
business they have built up cease
(either voluntarily or forced) is
one of the toughest experiences
they will ever have. FAILURE
SUCKS. This is why people avoid it.
But it does happen, for lots of
different reasons some of which
can’t be avoided. The term
‘honest’ entrepreneur in now
recognised and you need to use it.

4. Honest Entrepreneurs &
Bankruptcy in Context
 In Europe, 96% of all bankruptcies are
honest and only 4% are fraudulent. The
4% though are so susceptible to bad
press that it has led to a “one bad apple
spoils the bunch” effect.
 Lots happening at EU level to combat this
 Onus on Member States to give a Second
Chances to honest failed entrepreneurs
and "ensure that honest entrepreneurs
who have faced bankruptcy can have a
second chance quickly so that they can
create new companies and jobs“.
 This is driven by the fact that up to 18%
of all successful entrepreneurs have failed
in a previous venture.

5. An Honest
Entrepreneur
There is a willingness to support the
entrepreneur who has the drive and
the determination to pick
themselves and have another go,
learning from the past to create
success in the future.
“Seven businesses later, I’ve learned
many lessons along the way. Being
honest about your failures and
sharing them with others is one of
the most important steps
entrepreneurs can take.”
Jo Burston
Read more: https://www.theguardian.com/women-
in-leadership/2016/jan/27/budding-entrepreneurs-
must-learn-from-the-failure-of-others-not-just-the-
success
Photo – Daily Mail

6.  A genuine entrepreneur worries about
the stigma that often goes with a
business failure
 When a business fails, not only does
the entrepreneur lose big but so does
their staff, their investors/backers,
their customers and also their
suppliers.
 There is also a willingness to trust
someone, especially if they have been
trust worthy in past dealings. See video
next which delves further into this…
A genuine entrepreneur worries…

7. Changing Attitudes
and Approaches
 In the US there's a truism that you're
no good in business until you've had at
least one go under, yet in the EU the
stigma attached to commercial failure
is still a reality.
 But as we have mentioned before
attitudes and approaches are
changing..
 You can help these change even more,
the starting point is rebuilding trust
with your customers, employees,
investors, suppliers and even yourself!

8. The first thing to understand is trust
is remade – strengthened or
undermined – in every encounter.
Trustworthiness consists of three
main characteristics:
1) technical competence to perform
a task reliably (ability)
2) benevolence, and
3) acting according to ethical
principles such as fairness and
honesty (integrity).
Start with rebuilding
trust

9. Start with articulating
your perspective of
your failure story –
what went wrong, way
and what did you do to
negate the damage ?
This should form part
of your business plan
but also consider
sharing it in a blog or
other media – people
can learn from your
experience but you
also position yourself
as an open and honest
and a tryer.

10. Own your mistakes
 Although natural instinct may be
defensive self-preservation when you
make a mistake, be prepared to take
accountability for it. Being
accountable demonstrates you’re
responsible.
 Openly owning your mistakes and
admitting to them is key to rebuilding
trust. More than that, by being up
front, you’re showing that you’re
relatable.
 When you are an entrepreneur, your
reputation is your business and while
no one expects you to be perfect,
everyone expects you to be honest. If
you make an honest mistake, don’t be
ashamed of it. Being honest shows
you have integrity.

11. The come back –
Bill Cullen, Ireland
 Bill Cullen rose from poverty in
childhood to build a Renault empire
worth €100 million. But then his
business world fell apart when the banks
seized first his motor sales business,
followed by a five-star hotel he owned
with his partner
 In 2014, Cullen announced his business
rebirth with Bill Cullen Premier Cars, a
modest Ssangyong dealership in Dublin.
 His Renault business had peak sales of
about €300 million a year. For his newest
venture, Cullen’s aim was to sell one car
per week. He is now
 Cullen owned his mistakes and chose
not to leave Ireland to declare himself
bankrupt. His response “Why should I
leave this country? Every year has a
winter, and this is mine.”
Source: http://www.irishtimes.com/business/retail-and-services/a-
long-way-from-penniless-grapples-for-bill-cullen-1.1740211

12. Trust, Honesty and
your Customers
 Being honest in your business will help you
to build better relationship with your
customers.
 As a restarter, your mission at the moment
is to grow your new business - your
customer network is essential factor for
achieving this desirable growth.
 In the world of great competition it is
important for small business owners to
establish honest relationship with their
clients. Be honest with your customers and
expect the same from them.
 Asking for and appreciating candid feedback
will strengthen your business.

13. Trust, Honesty and
your Employees
 Being honest with your employees will
help you to establish good connection
with the people you work with.
 Being transparent at work about lessons
learnt from past failures will create a
more cohesive atmosphere in the
business.
 Going forward, taking on board your
team’s honest opinion and giving them
yours can improve the results of your
work as you strive for future success.

14. Trust, Honesty
and your
Investors
 Be completely honest with financial
backers. Investors have abundant
experience in selecting startups for
investment and they are aware that
newly created companies have
problems. Pretending that
everything in your company is
‘rosy’ is actually a red light for
investors. They will be concerned if
your proposition sounds too good
to be true!
Source:
www.startupist.com/2015/01/06/
the-role-of-honesty-in-
entrepreneurship/

15. Trust, Honesty
and your
Investors
 Knowing your strengths is a given,
but pointing out your weaknesses
and challenges while presenting
your proposed solutions can
actually increase trust in you and
your start up - your opportunity to
win funding is more likely to rise.
 With regard to your previous failed
business, rather than trying to hide
it, own it, explain the lessons
learned and how you will avoid
them second time around.
Source:
www.startupist.com/2015/01/06/
the-role-of-honesty-in-
entrepreneurship/

16. Trust, Honesty and
yourself!
 Restart Entrepreneurs in
particular need to be honest
with themselves, hindsight is
20/20 – the experience of past
mistakes is key here.
 It is important to realistically
examine every aspect of the
business and your own
performance. Were they gaps
in your management approach
to finances to product
development to customer
relationships. Bring honest with
yourself will leave you in a
better position to address what
can be changed second time
around

17. Rebuilding Reputation
Your reputation is perhaps your
greatest asset in the business world.
Most people think that only
politicians and celebrities who
misstep need to worry about their
reputation, but in reality, everyone
must protect the way in which they
are perceived and -- when
a damaging event does occur --
correct a damaged personal and/or
business brand.
Managing your reputation needs to
be carefully planned and
implemented and should be a key
part of your sales and marketing
strategy.

18. Some points on reputation – good
and bad
 We aren’t born with a reputation. We earn our reputation over
time, through behaviour, belief, interaction and communication
with others.
 If you treat others with disrespect, refuse to collaborate and don’t
share information, you might develop a reputation as someone
unpleasant to work with.
 By contrast, if you share your true experience and learning,
celebrate the success of others and display an approachable
attitude, you might be perceived as someone others want to be
around and want to do business with.
 Just as one-off negative behaviour typically doesn’t typecast
someone as a negative person nor does one failed business
typecast you as a bad entrepreneur.

19. Rebuilding Reputation – No such
thing as bad publicity?
 However if bad business patterns become prevalent and appear to be
set, then a bad reputation may start to gain traction.
 We’ve all heard the phrase “there’s no such thing as bad publicity.” The
theory behind it being that as long as people are talking about you, it’s
a good thing. Even if they’re saying awful things about you or your
company, the publicity is supposed to still be good because your name
is on the top of people’s minds, keeping you relevant. The truth is there
is such a thing as bad publicity. And while brands and business can
recover, bad publicity can leave a bad taste and cause some serious
damage for at least the short term and maybe longer.
 When this happens you have to try rebuild your reputation and your
credibility…. The slides which follow will give you some ideas on how to
rebuild your reputation and/or combat bad publicity

20. Repairing a bad reputation/bad
publicity:
1. Be upfront – Repeated elsewhere in this course but worth saying
again! When cultivating new business contacts, its far better to
control the terms of disclosure with regard to having a failed
business and perhaps negative publicity associated with it rather
than letting contacts discover the negative information on their
own. Let them know what’s in the public domain, what the truth is,
and how you have responded to it.
2. Apologize if necessary - Sometimes — alas — you’re responsible for
the mistake. A central tenet of crisis communications is to
apologize as quickly as possible, so you don’t inflame the public or
your investors. This harks back to s previous slide on “Owning your
Mistakes” – our top tip – If you haven’t already apologised and
publicly owned your mistakes (be it on a blog or else where) you
should do so!

21. 3. Communicating ‘negative’
news – importance of
one2one communication
 Swift action and one2one
communication are also key to a
successful turnaround.
 As we’ve mentioned, your
reputation, your relationships with
your customers/clients are two of
your most valuable assets.
 When things go wrong, you need to
go above and beyond to protect
these. This is where swift and
excellent communication skills are
required.
 Follow-up call and/or visits are
crucial to setting things right and
ensure your customer or client
knows they were/are valuable in the
past/future.

22. EXERCISE 1 – WATCH VIDEO: “Your
professional reputation is invaluable –
protect it at all costs.”
Irish entrepreneur Colm O’Brien
knows the great trails that come
with a failed business. At the height
of his first career, Colm was one of
the key decision makers in the
renowned Bewley’s brand. In 1998,
Colm and his wife made a brave
decision and took a Bewley’s
franchise in Limerick city. 8 years
later the business failed with the
loss of 35 jobs and a crippling
personal business related debt of
€250,000. In this video, Colm
shares his views on the importance
of maintaining a good name.
Learn more from Colm O’Brien Motivation:
http://colmobrienmotivation.com

23. 3. Give something back - Social
Responsibility
Improve your reputation by supporting a good social cause!
 Being reputable goes beyond a concern for yourself and your own
business advancement. If you really want to build a reputation, you
should work on fostering a mindset of helping other people.
 Contributing to the social and economic development of your
community is a great way to build your reputation and increase
relationships in the community
 Your level of engagement will have everything to do with your values
and goal but as a rule will include getting to know people, giving back
your time and resources, and being available.
 Social Responsibility is an attitude rather than just an activity. Initiative
could be a local project which involves and benefits the local
community.

24. Benefits of being Socially
Responsible
Good for the business!
 Employee attraction, engagement, retention
– it has been proven that employees want to
work for responsible businesses
 Reduced risk through strong reputation,
customer loyalty, brand values
 Promotes diversity and inclusion in
organisations, resulting in effective decision-
making
 Innovation - potential to drive new product
innovation and models of operation
 Learning – ability to learn from organisations
with different skill sets through the
development of long term partnerships.
Good for Society/Community
 Community re-generation,
goodwill, improved relationships,
social inclusion and community
cooperation
 Philanthropic activity, charitable
donations - improved services for
marginal and disadvantaged
communities
 Contribute to social and
environmental sustainability of
local and global society
Source: www.bitc.ie/wp-content/uploads/2017/01/CSR_Brochure_for_SMEs.pdf

25. 4. Enlist the Power of
Testimonials
 Strategic and intelligent use of
testimonials can go a long way
in rebuilding your reputation.
 Testimonials are written or
recorded statements that
support your credibility and
level of expertise. They also
strengthen your reputation by
expressing the trust that other
people have in you and your
business offerings.

26. Rebuilding Reputation –
Power of Testimonials
Testimonials as well as being open and honest about his
failures and experiences have helped Irish Restart
Entrepreneur Colm O’Brien rebuild his reputation – see
website http://colmobrienmotivation.com/

28. 5. Rebuilding your
reputation &
relationships with
great marketing!
 Great marketing can help you
to build public awareness,
confidence and/or support.
 A heightened public profile
gives you credibility also
increases the legitimacy of
your business in your
community’s eyes and that
can increase the support you
get from the them and your
influence with decision-
makers.

29. Building a even stronger brand second
time around..
 Being authentic is at the core of building a brand
 Who is the authentic you? Your ethos & beliefs.
 Your brand is how you need to express this to the
world. It is about identifying the personality of
your organisation and those traits that make it
stand out from the crowd.
 Seth Godin wrote a book about being remarkable
in your field. The Purple Cow effect
http://www.sethgodin.com/sg/
EXERCISE 2 –
what is your purple
cow (USP) ?

30. When developing a
brand, think of
PERSONALITY
 Great brands communicate a
compelling personality.
 It’s more than a logo – successful
brands tap into emotion as a
foundation for meaningful
differentiation and authentic
storytelling.
 Branding is the art of differentiating
your business to its intended target
and connecting it emotionally.

31. Your story is the
foundation for your
brand
 It’s a blend how you came to be, what
you’re passionate about, your business
culture, how you make people’s lives
better and why you are worth noticing.
What’s your personal story?
 Good brands often have human traits
that your targets might identify with?
 They have emotional context. You want
your customer targets to think, ‘they
are for me’, ‘he/she is like me’ or ‘that’s
how I think’.
What restart story do you want to put to
your potential customers

32. Your Story & Vision –
basis for your brand
EXERCISE 3: COMPLETE
OUR TELL YOUR STORY
This exercise will help you to
develop powerful marketing
material which can be used to
start PR and marketing
campaign.

33. Rebuilding Financially
 While we do not deal with the technicalities
of bankruptcy in this course, bankruptcy (or
other form of debt settlement) can be the
turning point in moving from years of bad
credit to an improved credit position.
 One of the most common bankruptcy myths
is that filing for bankruptcy will prevent you
from ever having good credit again. In fact,
many people who file for bankruptcy are
able to build a good credit score provided
they make sound financial decisions.

34. Sometimes business don’t fail, they
just stop.
 Discontinuity of Ownership sees an entrepreneur’s exit from his
or her business not only includes businesses that closed but also
businesses sold because the owner wished to retire for age or
health reasons, those sold for a profit, and those sold because
the owner merely wished to move on to another venture.
 It is important to recognise that entrepreneurs may exit their
firms for reasons other than business failure, including business
success.

35. Sometimes business don’t fail, they
just stop.
 Discontinuity of Ownership Due to Insolvency
This approach involves a business failure occurring when a fall in
revenues and/or a rise in expenses are of such a magnitude that the
firm becomes insolvent and is unable to attract new debt or equity
funding. Hence it cannot continue to operate under the current
ownership and management.
o Discontinuity of Ownership Due to Performance
Involves the sale or closure of a business because it has failed to
meet the entrepreneur’s or their investors expectations

36. EXERCISE 4: Watch Business
Failure – The Perfect Storm…
Irish entrepreneur Colm
O’Brien who we have
referenced quite a bit in this
module, tells of the 4 key
things that lead to “the
perfect storm” story and the
failure of his first business
failing with the loss of 35
jobs and a crippling personal
business related debt of
€250,000.
Click to watch video:
https://www.youtube.com/wa
tch?v=wrHFbMbuLwc

37. TOP TIPS on Rebuilding Financially
 Be Prepared to Present a Robust Business Plan
Before you try to get credit for your business, make sure you have a solid,
organized business plan to present to potential lenders. The industry in
which you are seeking a loan might also make a difference as to your
success. If you're seeking funds for a business with a high rate of failure,
such as a restaurant, prepare solid responses to likely questions. See
Module 3.
 Dispute any incorrect information on your credit report.
It is not uncommon for incorrect information to appear on your credit
report.

38.  Create a budget.
Proper budgeting skills are the first step in building strong financial habits
that will not only help you rebuild credit, but also help you maintain good
credit going forward. Budgeting allows you to know what money comes
in, and make a strict plan for what goes out. That prioritizes and leaves
room for debt repayment, savings, and on-time bill payments. The golden
rule of budgeting is to never spend more than you make.
 Shop around
Lenders may consider you to be less of a credit risk than you might think.
However, you should anticipate having to shop around for loans,
explaining what caused you to file bankruptcy, and demonstrating that
your finances have changed and you are now a good credit risk.
TOP TIPS on Rebuilding Financially

39. Additional Tips for Obtaining a Small Business Loan after Bankruptcy
 All lenders have their own criteria by which they determine eligibility
for loans, so your best bet is to find lenders that specialize in small
business. Also consider other options such as credit unions, peer to
peer lending, or Government backed microloan to fund your business
comeback or crowd funding.
 Bear in mind that, because of your credit history, a lender will often
charge you a higher interest rate and may require that you secure the
loan with collateral, such as the equipment purchased with the loan
funds or your own house or car. If you are still having trouble finding a
lender, consider asking someone with a good credit history if he or she
will cosign for you.
TOP TIPS on Rebuilding Financially
Please take Module 6 for
more detail on this!

40. Different forms of
business entity – which
one is right for you second
time around?
 When you start a business
you may choose to do so as
a sole trader, partnership or
limited company.
 The type of structure you
choose depends on the kind
of business you are carrying
on, with whom you will be
doing business and your
attitude to risk.

41. Sole Trader
The most common set up for many solo
entrepreneurs is the sole trader as it is the
easiest to start, and the least complicated to
dissolve. A sole trader is a business owned and
controlled by one person who takes all the
decisions, responsibility and profits from the
business they run.
Advantages
• Many of the advantages are summed up
under the heading "control".
• Full control over daily and strategic decision
making.
• Far less red tape and regulations than a
Limited Company.
• No staff to manage or pay.
• No annual accounts to prepare as sole
traders add income and expenses to their
annual self-assessment tax return where
you declare your annual profits and tax
liability.

42. Sole Trader
 It's easy to set yourself up as you only need to declare to yourself you are going to be
a business. Sole traders still need to properly account for all sales, expenses and
profits for any income tax and liabilities on a yearly basis. The VAT rules still apply if
the turnover of the business exceeds the limit set (i.e. Sales of goods €75,000 and
sales of services €37,500)
Ireland: You should advise Revenue when you start a business as a self-employed
person/sole trader. All you need to know on
http://www.revenue.ie/en/business/running/registering-tax.html#section2
Registering a Business Name
 You may decide to use your own name as the business name, but if you wish to use a
separate business name you must register the name with the Companies
Registration office. To register a business name, the form required is a RBN1 form
(Registration of Business Name). To register online, individuals would need to set up
an account online through www.cro.ie and complete and submit the form online.
Fee €20 if you register the business name online.

43. Sole Trader
 You may be part time employed in the early stages of business and paying PAYE.
 Some entrepreneurs – artists for example may be applicable for the Artists
Exemption in Ireland. http://www.revenue.ie/en/tax/it/reliefs/artists-
exemption.html
Disadvantages
 Perception that you are "small" - it may be difficult to bid and accept larger
contracts.
 Full personal liability for failure. In Ireland, if your business fails, it may be more
difficult to obtain social welfare. If you have been self-employed then you will be
means tested before being eligible to receive Jobseekers Allowance, while if you
have been an employee for a certain period, it will entitle individuals to
Jobseekers Benefit for a defined term regardless of their means.

44. Limited Companies
A legal entity separate from its share-holders.
Directors or shareholders personal assets are
not at risk in the event of a winding up or
receivership.
It is generally the most tax efficient business
structure to use. However, the disadvantages
are increased administration required of
directors the cost of preparing annual
accounts
IRELAND: How to Set up
A Form A1 is completed and submitted
together with a constitution (Only a one
document constitution if the company is a LTD
company, a memorandum and articles of
association for all other company types).
Company incorporation can be completed
online at www.core.ie

45. Partnerships
When two or more people start a business, the
result can often be a strong union that blends
complementary skills, financial resources,
customers and connections to help the venture
succeed. But, sometimes, such relationships can
sour and the business can fail.
You need to decide in advance who is doing what,
who is responsible for what, and how to resolve
disagreements. Before entering a partnership,
think carefully
• do you completely trust your partner(s)-to-be
• have all the partners sign an agreement setting
out how the business is to be financed, how
profits and losses are to be shared, and what
will happen if one of the partners decides to
leave. Failure to agree on such issues at an
early stage can lead to difficulty later.
Partnership Business Name must be registered.
The partners in the structure operate without the
benefit of limited liability thereby assuming full
and total personal liability and responsibility for
outstanding debts.

46. Other formats
Social Enterprise
 A business that trades for a social purpose. The
profit or surplus generated is usually reinvested
in the company or community rather than being
distributed to shareholders and owners. Their
social purpose is absolutely central to what they
do. Examples: Food cloud, The Nerve Centre,
Derry.
A Collective
 Where a number of organisations come
together for a specific purpose. The members of
the collective usually have a common interest or
objective. The form of the collective can be
formally defined or be a looser, informal
agreement.
DOWNLOAD
As a first step, download the
Revenue’s Starting in
Business guide (reference IT
48) and VAT for Small
Businesses (IT 49) from its
website (www.revenue.ie).