With more and more businesses going to the wall and many more expected to close their doors or go into receivership as the new year progresses after the challenging Christmas 2010 trading period, advice from the experts in recent times suggest that Irish people will either have to go abroad, take their business abroad or set up on-line, in order to succeed.
However high profile business man Ben Dunne, formerly of Dunnes Stores who most recently is enjoying success with his burgeoning chain of budget-price Ben Dunne gymnasiums, particularly in Germany, believes that 2011 will prove to be the year when Irish business people finally hit back and get real as they come to understand at last that good business sense is all about keeping costs to a minimum.
In a wide-ranging interview on Newstalk radio this week with presenter Damien Kiberd, Mr Dunne began by revealing his own business had grown by 244% on this time last year.
“In the first four days of 2010 we signed up 140 new members to our gyms but in the first four days of 2011, we had 482. Our policy of low prices and good value has at long last come through because it shows now that this is what people are looking for.”
Offering annual membership rates such as €100 per person for every family of three people joining his gym in Lucan, Mr Dunne agreed his prices were proving extremely competitive to other gyms but that low prices should be adopted by those wanting to survive.
“Yes, it’s very low compared to the competition but I think this will spread across the trade. It’s like when Aer Lingus slipped up and let Michael O’Leary and Ryanair take on the travel world, giving people travel at affordable prices. He swiped their eye and they’re chasing him ever since.”
Keeping things simple is also at the root of success, according to Mr Dunne.
“Over the last ten years people have made business complicated and the more complicated you make it the more expensive it becomes. The biggest problem retail has is there are people in it who know nothing about retail. That’s one of the biggest problems the country faces.
“People in this country have been running business without having a clue how to go about it. All this has to change. When I was in retail it was natural you had to work late Thursday and Friday - it was just part of your job. I make sure all my staff from directors down are at work on Monday, Tuesday and Wednesday until 9pm. I don’t mind if they don’t start until 12 but they must be there to meet demand until 9pm.”
This matter of staff leaving their posts too early poses a big problem in the retail trade, he added.
“Management aren’t there when they should be; they must be manning the posts; but then they try to make savings, just like the Dail, as a result of which they don’t sit often enough. It’s rampant right through this country, they are trying to run it part-time.”
Commenting on friends in business who like himself are enjoying success in current times, Mr Dunne stated: “No one is complaianing or saying, we’re run off our feet now, when they’re busy; instead they say, Ben it’s great, we’re doing well. I see it all being brought to a head in 2011, when people will smarten up at last and listen.”
The problem for commercial tenants tied into long leases with landlords who claim they are tied into a clause that makes it impossible to reduce rents - can and should be tackled by the government, Mr Dunne declared.
“One thing the Irish know about is landlords and there is no point working just to pay your landlord. We did that for 800 years in this country and I wouldn’t tolerate it any longer. The biggest property owner in this country right now, thanks to NAMA, is the government and they are also the biggest leasors (sic ) of property. If they were doing their job right they should say we’re going to all these landlords to demand a 20% decrease. Everything starts from the top. So the sooner people in organisations such as IBEC say it can’t be done, you can’t get blood out of a stone, the better.”
With rents remaining ridiculously high in the meantime, Ben Dunne gymasiums will continue to expand in Europe, Mr Dunne asserted.
“We’re expanding again now with another new gym in Germany. I haven’t had one phonecall from NAMA offering me space to open up a fitness gym and bring thousands of people into desolate areas in Dublin , but in Germany I can rent space at €4 a square foot in Essen, Dortmund and Dusseldorf. In Ireland they are trying to get €10. If we’re in the EU we’ve got to be competitive. It’s only a fool paying even €8 euro a square foot now. Why would anyone want to set up in Dublin?”.