Starting and growing a business is a daunting prospect, no matter where you’ve set up shop. However, given the emphasis that is placed on the capital as a hotbed of business talent, the task at hand must seem all the more challenging for entrepreneurs located outside of London. Granted, London has a great deal to offer for aspiring business owners; there’s an ever-expanding talent pool to tap into and culture and innovation that inspired the creation of over 200,000 new companies in 2015 alone. For the second year running, the UK capital was also ranked by PwC as the best city in the world for opportunity, topping the likes of New York and Hong Kong. Nonetheless, our nation’s regional cities should never be overlooked in terms of SME promise, and it’s the role of investors and the business owners themselves to ensure that companies harness that potential and take advantage of their surroundings.
In my view, investors – especially those based in the capital – still have a very London-centric view towards SME investment. However, this is by no means an accurate reflection on the calibre of businesses around the country, and it should not act as a deterrent for entrepreneurs that do not operate in the capital. Research from the beginning of the year, for instance, revealed that 78 per cent of the UK’s fastest-growing companies are located outside of London. Furthermore, some of the most impressive business case studies that have emerged in Britain in recent years are also outside of London. Take BrewDog for example; that was founded in Fraserburgh, Scotland and recently raised $1 million on a US equity crowdfunding campaign in just three days. Incanthera – one of our own portfolio companies at IW Capital – is another promising regional business. The company is a fantastic oncology spin-out from the University of Bradford which has since set up its headquarters in Manchester and has premises in Salford. It is case studies like these that inspire me to look further afield than London and build a portfolio that spans all corners of the UK.
What successful companies outside of London – such as BrewDog and Incanthera – have in common with thriving businesses in the capital is that they have highlighted a wider issue or recognised their locality’s industrial legacy and current reputation in a certain field. To return to the example of Incanthera, this company is ideally positioned in one of the UK’s top university cities that is highly regarded in the medical sector. As we highlighted in one of our recent initiatives, the SME Heatmap, Manchester welcomes around 80,000 new students each year and boasts the largest student population in Europe. Manchester University is also the biggest medical school in the UK and provides the most healthcare graduates to the NHS in the North West.
Things are happening outside of London
Birmingham is another example of a university city bursting with graduate talent, with four higher education institutions in the area. In university cities, start-ups or scale-ups have fantastic recruitment opportunities available to them, providing that they are proactive in advertising vacancies, seeking promising candidates after graduation, and even offering internships that could add value and fresh expertise to their company.
It’s a given now that advancements in technology have democratised entrepreneurship by helping to cement partnerships remotely and propelling the development of innovation clusters that are no longer reserved for London’s Tech City. 4G, superfast broadband and cloud computing have all helped to remove the physical barriers that once would have constrained some companies and have instead made doing business far more fluid. However, physical connectivity to other regions and utilising your local transport infrastructure is equally important to ensure you build a network of contacts around the country, which could be vital when introducing your product or service into new markets. When hosting our events, we actively invite companies from across the country to participate, because networking is a great way for entrepreneurs to interact with investors and like-minded companies from other cities that may be looking for opportunities elsewhere themselves. That said, making the most of networking in your home city is just as vital, as this encourages businesses to share ideas, tackle challenges that you can each relate to, and broaden awareness of your own service offer.
Similarly, local co-working spaces are essential for young companies looking to integrate and establish a community of entrepreneurs. These spaces are also incredibly cost-effective and a great way of finding quality workspace with good amenities, which is definitely an area that London entrepreneurs are at a slight disadvantage.
No matter where they are based, as long as business owners are willing to fully maximise their local resources; tap into the surrounding talent pool and pursue as many networking opportunities as possible; they will be in good stead to scale and develop their brand. Also, having the confidence to approach investment providers elsewhere and national funding initiatives – similar to our Race to Scale funding drive – is essential for building awareness of your product amongst an investor audience which could be key further down the line for raising development capital.
Couple the above factors with a nationwide infrastructure that has never been more supportive for growing a business, one’s location should never be viewed as a disadvantage. Instead it creates opportunities unique to your region and serves as a springboard that can enable you to capitalise on the defining factors of your location. Regional entrepreneurs also benefit from better online connectivity and a far more sophisticated local infrastructure than that of a few years ago, which will continue to develop as local councils stand to gain from devolved power, such as the appointment of Greater Manchester’s new mayor in 2017. Now, irrespective of their location, entrepreneurs are a stone’s throw away from an enterprise hub that has vastly improved from a long-gone era where aspiring business owners had no choice but to head for the capital.
Luke Davis is co-founder of Crowdfinders.
Further reading on growing a business