Compliance in focus for Cork entrepreneurs
EY Entrepreneur of the Year finalists Damien McGovern and Pat Lynch, Compliance & Risks
Damien McGovern and Pat Lynch, Compliance & Risks
Having worked advising multinationals on regulatory changes affecting his firm’s operations, Damien McGovern saw a gap that could be filled. He started on the road of entrepreneurship by establishing Compliance & Risks to help manufacturers, retailers and their supply chain partners monitor and manage regulations and standards.
Pat Lynch came along as the company’s first investor. With the pair’s drive, the company has grown steadily and now counts eight out of the top 10 electronics manufacturing companies and three of the top four engineering companies in the world as clients.
With its headquarters in Cork and offices in Brussels, California, London and New York, the company has more than 80 employees with about half of those based in Cork, while its client base has expanded to 250.
In three years’ time, Lynch expects the business will have doubled in size as companies seek to keep on top of new and existing regulations that affect their products going to market. In the medium term, with high margins, the company plans aggressive growth from existing cash flow.
What vision/light-bulb moment prompted you to start up in business?
Damien: It was the opportunity afforded by the Graduate Enterprise Programme in Cork run by the CorkBIC which coincided with my leaving Russia after winding up a business venture of four years. I don’t know if I would have started my own business if that hadn’t been available.
Pat: It was when Seagate closed in Clonmel in 1998 with the loss of 1,400 jobs that I decided to start my own business, which was a specialist cleanroom and workwear laundry. I was fortunate to sell it in 2001.
What was your ‘back-to-the-wall’ moment and how did you overcome it?
Damien: The financial crisis in 2008. We went to a three-day week, the banks wouldn’t lend us money so we took in loans from private investors, but we came out the other end stronger.
To what extent does your business trade internationally and what are your plans?
Pat: All of our business is done internationally. Purchase orders come from the client’s headquarters. Our plans are to continue to grow internationally by upselling to our existing client base and attracting new customers as well.
Have you started to feel the effects of the economic upturn within your sector/ industry?
Damien: Yes. During the downturn wallets closed, but companies are spending again.
What is the hardest thing you have ever done in business?
Pat: I kept funding the business when we did not have clients. I believed we would come good some day. I did not think it would take so long. I believe it does take 10 years to build great companies.
What was your biggest business mistake?
Damien: I think it was not putting a strong board in place early enough.
Pat: Underestimating how much cash we would need before we turned profitable. Getting to profitability is key for any company and then cash flow can grow the company.
Based on your experience, are the banks in Ireland open for business?
Damien: When we needed them they weren’t there.
Pat: Absolutely not. They say they are but they do not want to take any risks. They still want personal guarantees from directors even when companies are profitable and generating cash.
What is the single most important piece of advice you would offer to a less experienced entrepreneur?
Damien: Surround yourself with experienced business people who have made all of the mistakes already – not original but it’s sound.
Pat: Get a mentor with grey hair with experience in your space.