Despite the current political upheaval and economic uncertainty, the UK remains fertile ground for small businesses and startups. Some 65 percent of owners still remain optimistic about growth and plan to introduce new services and products before the year closes, according to the Small Business Barometer.
If you’re one of the entrepreneurs looking to enter the market, here are 4 tips to help you find your foothold.
1. Research your customers and your competitors
There are 5.6 million small and medium sized enterprises in the UK. If you want to gain a respectable sliver of the market in your industry, you need a clear definition of your unique selling propositions, your target audience, and branding.
Research is key. Talking to customers is critical for verifying if your service or product is actually meeting a demand, and if that demand is strong enough to sustain a business. Generally the more people you can survey, the better.
However, small business owners may not have the resources to hold focus group discussions with hundreds of people. Fortunately, the Internet allows you to gather data en masse without spending. You can directly ask questions on Quora, or browse Facebook group discussions to get an idea of what your customers need.
Looking into competitors is another task that some small business owners may overlook. Competitor research can reveal gaps in the market that your business can address. Amazon reviews are a great free way to find out how similar products are faring.
2. Look into location
Where you set up camp is as crucial to your business as your products and services. Each city possesses different characteristics that will determine if your business will survive. Some offer more financial support and mentorship for specific sectors. There’s also the issue of set up, rent, and operational costs, which will vary from district to district.
Below I take a closer look at three of the most popular UK cities entrepreneurs flock to.
Bristol’s economy is on the fast track for continued growth through to 2021, despite the economic uncertainty UK wide, according to international accounting firm Ernst & Young. The city is predicted to grow by 2% Gross Value Added (GVA) per year, causing economists to put it alongside—and sometimes even above—top tier cities like London and Manchester.
Businesses setting up in Bristol will also benefit from the city’s well-linked location, strong support for startups, and a vibrant hub of digital and technological innovation dubbed the Silicon Gorge. Numerous initiatives like SETsquared and Square Works enable a high level of collaboration among local business, which has germinated a culture of entrepreneurship and mentorship. With so much support and networking opportunities, Bristol is a brilliant place to start a new business, or relocate an existing one to tap into new markets.
Manchester is quickly establishing itself as the UK’s next big business capital, with forecasts predicting GVA growth of up to 45% until 2036, along with a population swell that will consist heavily of skilled talent looking for better career opportunities out of London. The tech sectors are particularly robust, boasting over 60,000 jobs.
The city is leaning into this growth with numerous grants and initiatives. Project Forward awarded £2m in grants to help establish two new centres for incubating SMEs dealing in digital tech. The Business and Intellectual Property Centre offers access to journals, market research, and legal and professional advice from industry experts through seminars and consultations—all for free. There are a number of coworking and shared spaces to work from, making it an ideal location for a growing number of remote business owners.
One can hardly think of establishing a business in the UK without thinking of The Big Smoke. As one of Europe’s strongest economic capitals, the city is home to thriving financial, retail, and construction sectors. It holds the highest concentration of businesses in the UK—some 1,563 for every 10,000 residents.
Competition is stiff. To thrive in the busy capital, placing your centre of operations in the relevant location is paramount. London is divided into multiple districts, with each area catering better to some industries than others. Retailers may want to set up shop in touristy and iconic South Bank, while finance startups may fare better in Canary Wharf, headquarters to major accounting firms like Ernst & Young and Deloitte.
3. Leverage financial support
The government offers numerous loans and grants suited to help small businesses take off. Even boot-strapped entrepreneurs will find appealing options. For instance, the Start Up Loan grants anywhere from £500 to £25,000, which is payable over up to 5 years. The loan also comes with a 12-month mentorship, and help for crafting a detailed business plan.
4. Sort out your permits and taxes
Registration and taxes are probably the least exciting parts of establishing a business, yet it has to be done. Fortunately, most of the permits can be applied for online, and there’s a wealth of resources on how to file taxes properly.
Your registration process will vary depending on the type of business you have. If you’re opening a branch of an established business, you need to register with the Companies House. First time business owners need to register with the HM Revenue and Customs. Non-UK residents will also want to look into the Tier 1 Visa for Entrepreneurs.
Sorting out your taxes properly is crucial for avoiding fines, which can get expensive. Filing your returns a day late will cost you £100, and an additional £10 every day. The best option would be to hire an accountant. They can help you spot tax scams, an increasing number of which are targeted at the self-employed. And while hiring will raise costs, professionals will let you focus on building your business, not worrying about paperwork.
Guest post courtesy of Dave Blackhurst. Dave is the director and founder of Bristol IT Support Company, EvolvIT.