Future Proof: Marc O'Dwyer, chief executive, Big Red Books

Big Red Books may have been like a “wounded animal” when Marc O’Dwyer first got involved with it, but with some care and attention the firm has returned to form.

It has held its position throughout the recession and is now gearing up for the next stage in its growth – exporting.

The original incarnation of the company stretches back to 1993, when it was established by Dublin accountancy firm Bryan Phelan and Associates to offer an accounting package to small business owners.

By 2001, however, the company was struggling and losing money. It called on the advice of entrepreneur O’Dwyer. He had some form in the sector as he had founded a company, Irish International Sales, selling SAP and accountancy products in 1992.

As he saw it the company had three choices:

* Lift a phone to a competitor and look for sale;

* Get someone else in to run it;

* Let him take a majority share in the company.

They chose the last and O’Dwyer acquired a 74 per cent stake, later buying out the original owner to increase his shareholding to 90per cent.

Solving problems

“At the time it was a wounded animal, but I felt that with a little bit of care and attention it could be a good company,” he recalls, adding that Big Red Books’ problems boiled down to three issues.

“They weren’t selling the product for enough money; they didn’t have a payroll package to sell; and its marketing was less than desirable,” he says.

He quickly set about rectifying these problems.

One step involved changing pricing and selling a premium product to facilitate the euro changeover. This added €250,000 in revenues and O’Dwyer followed it by buying intellectual property to another Irish firm’s payroll package.

The software was “big red bookised” and was quickly brought to market, thereby giving the company’s customers a full suite of accounting and payroll products to sell.

Within six weeks, the company had returned to profitability, where it has been ever since. Big Red Books now has turnover of about €1.5 million, staff of 27, and its services are used by more than 16,000 small and medium companies across Ireland and Britain .

But growing has not been without its challenges. In 2009, O’Dwyer attended an Enterprise Ireland seminar where the focus was on cloud computing. He saw the opportunity to move into this technology.

“At the time I thought, ‘we can sit back and make a good living out of our software but eventually it will whittle away. Or we can take the baton and move with the future’.”

Big Red Books went for the latter option and soon O’Dwyer had contracted a local IT company to convert the firm’s software to the cloud. However, by May 2010 that company had gone bust, and Big Red Books was left with a product that O’Dwyer describes as “useless”.

He decided to put his own team together, rewriting the software from scratch. To do it in Ireland would have been too expensive, so O’Dwyer looked to Belarus where the testing on the original product had taken place.

“We could get two senior developers there for the price of one here,” O’Dwyer recalls, adding that, with the company’s budget for upgrading the software shot as a result of the collapse of the Irish firm, it was a “needs must” situation.

But the move has worked.

“We’re in a far better place now than we were back then,” says O’Dwyer.

The recession has also posed its own challenges.

“We had to bring our product price down to match the market and give customers value for money, but most small businesses realised that they needed an accounting package to ensure they could stay in business, so we managed to win more business,” he says, adding that while the price cut meant revenues remained static, the company still managed to boost its profitability.

Big Red Books has now launched its cloud product, and restructured its pricing model.

Previously, the product was sold for €790 in the first year, with a support fee of €199 annually in subsequent years. Now it’s a pay-as-you-go model, with a charge of €25 a month or €250 a year.

Given that its route to market is largely through accountants, the use of Big Red Books’ new cloud product is being made available to these professionals for free.

The next step for Big Red Books is targeting the export markets. O’Dwyer has been working with Enterprise Ireland on developing an initial strategy to grow in Britain and Australia .

If successful, he expects turnover to grow to €2.5 million within 12 months, rising to between €3 million and €5 million thereafter.

Export plans

However, this phase has also not been without its challenges. While its own bank supported it in its development of the cloud product, Big Red Books has found it more difficult to get funding to finance its export plans.

It recently got “quite far down the line” with a loan application. But when it got to the final hurdle, the bank said no. It is now working once more with its own bank and Enterprise Ireland to get matching funding, and hopes to raise €2 million through these, and other sources such as venture capitalists and private individuals.

“There is appetite out there,” he says, adding, “but it will come down to how much equity I want to release”.