Location choices could be limiting SME growth
Business clusters across the UK are thriving, but the majority of small businesses are not taking advantage, according to new research.
A report from Opus Energy suggests that a fear of competition is meaning that many SMEs are missing out on opportunities that come with being located in a business cluster.
Only 7% of owners opted to start their business in a zone or cluster with like-minded businesses, where improved travel links, lower costs and more talent are usually available.
Just 8% chose their started location based on favourable taxes and grants too, with 14% saying their decision was down to the possibility of sharing skills or networking.
According to Opus, the figures show that business owners are focused on convenience rather than business performance.
Some 40% of owners said they set up where they did as the location was convenient for them, while half of owners opted to set up shop where they lived.
Having capital readily available was also key. Of the 650,000 businesses set up in 2016, around 205,000 were in London, while only 10,000 and 8,000 were in Manchester and Leeds respectively.
Younger individuals were found to be more likely to set up in business clusters, as 77% agreed that working with like-minded people in a similar field to their own would be beneficial for productivity and their finances.
However that figure dropped to just 38% of those aged over 35, and to 25% of those aged 45 and over – highlighting a stark difference in approach.
When asked why, the older workforce said they feared their ideas would be stolen and that they would experience a high employee turnover should they be in a cluster.
Businesses looking to grow may need to refinance or consider their options if they find themselves in difficulty or without the finance they need.
A range of alternative finance options exist for such instances while pre lend reviews can reveal a business’ suitability for borrowing.
More than a quarter of SME owners said they knew instantly where they wanted to locate their business while one in ten decided within a day.
Having close proximity to other businesses allows firms to collaborate and tackle problems together, which can also boost productivity in the long-term.
Business clusters across the UK are thriving, but the majority of small businesses are not taking advantage, according to new research.
A report from Opus Energy suggests that a fear of competition is meaning that many SMEs are missing out on opportunities that come with being located in a business cluster.
Only 7% of owners opted to start their business in a zone or cluster with like-minded businesses, where improved travel links, lower costs and more talent are usually available.
Just 8% chose their started location based on favourable taxes and grants too, with 14% saying their decision was down to the possibility of sharing skills or networking.
According to Opus, the figures show that business owners are focused on convenience rather than business performance.
Some 40% of owners said they set up where they did as the location was convenient for them, while half of owners opted to set up shop where they lived.
Having capital readily available was also key. Of the 650,000 businesses set up in 2016, around 205,000 were in London, while only 10,000 and 8,000 were in Manchester and Leeds respectively.
Younger individuals were found to be more likely to set up in business clusters, as 77% agreed that working with like-minded people in a similar field to their own would be beneficial for productivity and their finances.
However that figure dropped to just 38% of those aged over 35, and to 25% of those aged 45 and over – highlighting a stark difference in approach.
When asked why, the older workforce said they feared their ideas would be stolen and that they would experience a high employee turnover should they be in a cluster.
Businesses looking to grow may need to refinance or consider their options if they find themselves in difficulty or without the finance they need.
A range of alternative finance options exist for such instances while pre lend reviews can reveal a business’ suitability for borrowing.
More than a quarter of SME owners said they knew instantly where they wanted to locate their business while one in ten decided within a day.
Having close proximity to other businesses allows firms to collaborate and tackle problems together, which can also boost productivity in the long-term.
By Phil Smith