London has a reputation for being one of the biggest start-up hubs in the world – however it’s certainly not plain sailing for entrepreneurs. Recent research conducted by eBay revealed that just two out of five new start-ups in the capital last for more than five years. With areas outside of London having higher business survival rates, perhaps small businesses and SMEs shouldn’t see the city as their only option or prime location?
The statistics aren’t positive or inspiring; over 50,000 businesses were launched in London in 2009 and fewer than 20,000 were still around in 2013. However, many young entrepreneurs still yearn to be based in the capital, the economic powerhouse of Europe. But the figures prove that only the fittest survive. Here are some vital tips for surviving as an SME in London.
Bypass high rental costs
Many businesses, some that have been based in the capital for decades, are being priced out of London. The cost of renting even a small office anywhere in the city has shot through the roof, so you need to ask yourself if you really need an office at all. Even formally accessibly areas in the east of London, such as Shoreditch, are now too expensive for start-ups and SMEs. Especially in the early stages, figure out whether an office is really worth the price and the risk. Many of the world’s biggest businesses started off in a home office, so put off renting for as long as you can.
Lots of people have got their business ideas off the ground with the help of crowdfunding. By using websites and platforms such as Crowdcube, Funding Circle and Kickstarter, you could secure the funds you need to make your business survive for the first few years. You can ask for funding for new product development, creative projects or anything you think will boost your business.
SMEs often can’t afford to hire more than a handful of staff, but you may require the expertise of more people. Outsourcing is the answer to keeping your business running and keeping costs down. For example, departments such as marketing, HR, IT support and facilities management can all be outsourced. The growing freelance market also makes it super easy for start-ups to hire web designers, copywriters and digital strategists on a project by project basis with no commitment.
Make 2017 great for your business.