Opinions

Why You Shouldn’t Start A Business In London

London is the centre of the UK's business world, but is the right place for you to start a business? High rents, shocking commutes and strengthening alternative locations suggest you might want to think again about locating in the Capital.

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London is the centre of the UK's business world, but is the right place for you to start a business? High rents, shocking commutes and strengthening alternative locations suggest you might want to think again about locating in the Capital.

Opinions

Why You Shouldn’t Start A Business In London

London is the centre of the UK's business world, but is the right place for you to start a business? High rents, shocking commutes and strengthening alternative locations suggest you might want to think again about locating in the Capital.

Share this article

There’s no denying that London is the UK’s economic powerhouse: from early stage start-ups to multinationals, the Capital continues to lead the way when it comes to business. However, as much as we should be proud of what our Capital city has to offer, the limitations of London as a place to set up and run a new company are clear.

For many, the realities of London living make setting up a business, with all of its risks, seem completely unachievable. Soaring living costs, lack of affordable space and difficult-to-access support in a city of eight million people all mean that many businesses are simply being squeezed out. It’s time for entrepreneurs to really think outside the box when it comes to choosing the right location of their business and explore more options available out there.

So where should they go?

Our focus on London can allow us to forget about all of the incredible opportunities available in other cities – where we went to university, where we spent a weekend away or even on our own front door steps. The fact is there have never been so many opportunities for entrepreneurship across the country.

Seventy-four percent of the UK's digital firms are now based outside London and there’s an ever growing commitment from the government, local authorities and businesses themselves to support talent.

It’s time for entrepreneurs to stop thinking that London should be the automatic choice when it comes to launching a business and start thinking about how cities across their country might offer exactly what they’re looking for.

Trinity street with college view, Cambridge

Cambridge is home to some of the UK's best technology companies

It’s too expensive

Affordable real estate is becoming more and more scarce in London, both in terms of housing and office space. In June this year, average monthly rental costs in London hit £1,500 for the first time.

For smaller businesses with limited capital, access to space in central or well-connected areas is becoming a luxury they can’t afford. Not only does this make it harder for young firms to succeed, it’s a huge barrier for many people with the ambition to start a company.

The costs of living and working in London can simply outweigh the benefits.

Networking is not a London privilege

Of course, London has great networking opportunities but if rental prices or travel costs have forced you to move outside the buzz of places like Silicon Roundabout, these opportunities can be harder to come by.

When it comes to starting up, often it’s who you know, not just what you know that counts and setting up a business in a smaller city means like-minded people are much easier to find and to meet. This naturally encourages networking, collaboration and the sharing of ideas and experiences, potentially creating new business opportunities.

It’s also easier to meet representatives from those larger corporates who might need your company to support their research and development, Innovation Strategies or supply chains.

It’s hard to have a life

Let’s face it, as an entrepreneur it can be difficult to switch off from the demands of business wherever you are but maintaining a healthy work-life balance is so much harder when you spend half your day commuting.

London Underground

Transport, especially in rush hour, is not one of London's strengths

There’s talent everywhere

The availability of a skilled and talented workforce is not reserved to the Capital. This is available nationwide, especially when it comes to the younger generations that are eager to follow an entrepreneurial pathway and develop their skills “on the job”. Universities and local authorities are working hard to retain and nurture local talent, providing a great resource pool from which to recruit new staff.

Look at the national Santander-funded Internships programme run through the Universities. We have seen many small benefits for businesses who have taken on an intern to do a specific piece of research or marketing work that often it is difficult to find time for in the early stages.

And one last thing…

One last piece of advice - there’s no point in going to a city you don’t like just to start a business.

Go because a) your friends are there; b) you went to University there; c) you already have networks there; d) you have researched their ‘offer’ for small businesses and you like what you see; e)they have a great music scene; f) you love the vibe of the city and its culture… You are the driving force behind your business and the happier and more settled you are, the greater the likelihood of success.

Kathy McArdle is CEO of Nottingham’s Creative Quarter, which recently won the Enterprising Britain Award for Britain’s most improved business environment

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Why You Shouldn’t Start A Business In London

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