THE ENTREPRENEUR
‘I used to think education was just a box that you ticked. Now I believe that education really broadens the mind and alerts you to possibilities’
business model. “Between Smurfit and Honeywell Bull, I received a good grounding in serving the needs of business,” he says, adding that this was when he realised that there was no one serving the IT needs of the medical profession.
New horizons “I always had at the back of my mind that I would end up in self- employment, but never thought of myself as an entrepreneur,” Beggs continues. The life-changing opportunity that presented itself was a request from a number of doctors to provide a software program for their practices. Beggs and his wife set up on their own in 1995, using a redundancy payment that she received from the closure of Digital in Galway. The software solution they developed for private consultants formed the core of the Medicom Group and heralded expansion into software solutions for hospital pharmacies, main street pharmacies, cancer care centres of excellence and general practitioners (GPs). “There were two of us in a serviced office in Fitzwilliam Square with an idea and an overdraft,” says Beggs. “Between 1995 and 1999 we basically bought software systems to handle fees and receipts for GPs and hospitals and installed them at a profit. We were providing small business solutions and making installations all over the country.” Scale was a challenge in the early days. “I remember answering the phone and someone asked to talk to Howard Beggs so I said, ‘I’ll see if he is in’. Then I changed my voice and took the call.’’ Cash flow was also a challenge. He recalls facing into one Christmas without the resources for a turkey. Happily, the funds for the festive bird were raised before Christmas Day.
Turning point The first transformation of the Medicom business was developing its own software solutions for consultants and rolling that out to GPs and to hospitals. The other major transformation was the MBA course in UCD School of Business, according to Beggs. “In 1987 it was a stark choice between taking a job with Smurfit or going on to third-level education – a job was hard to find then. But I did intend as soon as I started the business that I would educate myself on how to run that business.” And in 1999 he did just that – returning to take an MBA at the UCD School of Business, although he admits there were parts of the course that he found hard to appreciate at the time. “I recall secretly doing debtors lists for the business during human resources or accounting lectures on Friday afternoons, but by the end I appreci- ated that these disciplines were also important,” he recalls. “I started the course in September 1999 and I still point to that as the turning point of the business”.
Because the course was primarily conducted at weekends, Beggs was able to continue running Medicom and apply the lessons he was learning. “By the end it was literally like a light bulb had been
24 UCD BUSINESS CONNECTIONS
switched on in my head. Frank Roche had shown us how to trans- form a business and how to scale up using venture capital and bank facilities.” He also praises Roche for “wheeling in senior bankers and venture capital guys so we could talk business face to face with them”.
Investment By the time Beggs finished his MBA his Medicom business was turn- ing over €500,000 a year and employing nine staff. “As a result of understanding strategy and the importance of setting out a business plan, I raised €750,000 in investment from the Davy Technology Fund within six months,” he says. Between 2000 and 2005 Medicom raised a total of €2.5m in four
separate fundraisings, allowing the company to expand into multiple markets and to do business in the UK for the first time. By the end of 2005 Medicom had 30 staff and was generating €2.5m in turnover. The following year it acquired Systems Solutions, which specialised in software solutions for pharmacies. “It was a good piece of financial engineering,” Beggs says. “We set
up Helix Health, which raised funding to acquire both Medicom and Systems Solutions. This meant we bought out our earlier investors at a profit and left ourselves with a company of decent scale with almost 100 people and €8.5m in turnover.” Beggs also took part in a programme for CEO entrepreneurs in Stanford University in the US at the request of Enterprise Ireland. “That was a reminder of what I had learned 10 years earlier at UCD and lifted my ambition levels. It also taught me how small Irish busi- nesses are.”
Organic growth Today, Helix is ranked in the top 10 indigenous Irish software com- panies. Growth has continued since the acquisitions and Helix now operates in six countries, including the Middle East where it works with the Royal College of Surgeons Ireland in Bahrain and Kuwait. “Most of the growth in recent years has been organic in both Ireland and the UK,” explains Beggs. “We got out of the west coast in the US as we were spending US$500,000 a year trying to compete with multi-billion dollar rivals.” Helix Health has built up a decent capital structure over its 15-year
history and includes Davy and Enterprise Ireland amongst its investors. This year the company will produce earnings before inter-
est, tax, depreciation and amortisation of €3.5m on revenues of €14m. Helix Health has impressive market share figures in Ireland, with 80% of the country’s GPs on its books – over 2,000 customers. Its systems are also in use in 80% of hospital pharmacies and in 70% of main street pharmacies, and it has a 100% market share of the coun- try’s chemotherapy centres. “Despite our market share figures, there is significant competition
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