Edward Timmins (Wicklow, Fine Gael)
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14. To ask the Minister for Enterprise, Trade and Employment the supports in place for small companies and businesses to enhance their understanding of profit and loss and cash flow; and if he will make a statement on the matter. [62194/25]

Edward Timmins (Wicklow, Fine Gael)
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Like the Minister, I have worked in and for small businesses in this country. The highest number of employed people in the country is in small businesses. Many of these businesses are an intrinsic part of their communities. They are also a crucial part of the economy and the social fabric of this State. What supports are in place for small companies and businesses to enhance their understanding of profit and loss and cash flow?

Alan Dillon (Mayo, Fine Gael)
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I thank the Deputy for his question. It comes from an accountant and, with the Minister being an accountant, I feel less qualified to answer it but I will do my best.

The local enterprise offices, LEOs, are located in 31 local authorities to promote a suite of supports designed to assist small businesses to reduce their costs and become more productive and competitive. The LEOs provide consultancy and grants to small businesses across all sectors in the areas of lean, green and digital. These supports focus on enhancing productivity while improving competitiveness, and they can help business owners identify opportunities to save money, time and energy. The LEOs also play a crucial role in supporting small businesses to build financial capability, including a practical understanding of profit, loss and cash flow management.

Training programmes are scheduled based on local demand and delivered on a tailored basis to meet the specific needs of small businesses. LEOs are consistently encouraged to prioritise financial literacy when designing their training calendars. This year, the LEOs delivered a wide range of targeted courses to enhance the financial understanding of SMEs. Each course is designed to equip small businesses with practical skills in financial planning, cash flow forecasting and understanding profitability. Among the courses delivered were financial foundations for small businesses, managing cash flow in business, managing your cash flow, fundamentals in business finance and bookkeeping and accountancy for small businesses.

The LEOs also offer a start your own business training programme aimed at those who have a business idea or have recently set up a small business. This programme includes a dedicated finance module to ensure new entrepreneurs gain essential financial knowledge.

Edward Timmins (Wicklow, Fine Gael)
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I thank the Minister of State. That covers a lot of what I was looking for. These businesses include retail, restaurants, pubs, small family businesses and the self-employed. In my experience, many of them have a poor understanding of profit and loss. They do not understand the basics of gross profit and fixed overheads. If they understood them, they would know their break-even sales figure. This is fundamental to understanding viability. If they understand this, they can know using a weekly turnover figure how well they are doing. This means they can take corrective action before it is too late. Unfortunately, many only know they are not doing well when they see they cannot pay their VAT bill or their suppliers. Even then, they do not understand what the problem is.

Alan Dillon (Mayo, Fine Gael)
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I absolutely agree with the points the Deputy raises. Financial literacy is a cornerstone of competitiveness and that is why we have the LEOs ensuring small businesses have the tools to manage their finances effectively. They are on hand to assist at county level, including financial mentoring, training workshops and management development programmes. It is important that owners who want to advance their financial planning skills are supported, that any perceived challenges around financial management are demystified and that business owners make informed decisions and avoid common pitfalls. For start-ups, we have the start your own business programme. That has a specific finance module wherein the LEOs provide specialist mentoring to entrepreneurs and owners on strategies around pricing, cash flow and profit and loss.

Edward Timmins (Wicklow, Fine Gael)
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In relation to taxes, we have a similar problem. Many businesses think the VAT they receive is part of their business cash, not fully understanding it is cash they collect on behalf of the State. I came across a business selling coffee. They thought the €4 they charge for the coffee was their income and the VAT was a cost. Similarly with PAYE, USC and PRSI, they sometimes use these taxes as cash flow for the business. Can the LEOs provide a basic tool to help small and not-so-small businesses navigate this apparently simple issue, which has driven many potentially successful businesses to the wall? Can such workshops be a regular offering by the LEOs? Can Revenue do the same? Can they inform small businesses of these supports?

Alan Dillon (Mayo, Fine Gael)
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I appreciate the concerns the Deputy has raised. For any business owners, it is incumbent on the Government and the LEOs to ensure they are sustainable, have resilience built into their business plan and have access to the mentoring, training and advice that are essential to keeping businesses afloat. Raising the importance of financial literacy and ensuring businesses have access to training workshops is part of the local enterprise offering. They have peer-to-peer learning and engagement with key advisers within each local authority. We want to continue to support this through tailor-made programmes. The start your own business programme has an important financial module. Enterprise Ireland also invests in early-stage leadership development to ensure companies on that journey are supported.