How to start a business in London

So, you want to start a business in London. The big smoke. A city that if stood alone, as a nation, would have the 18th highest GDP in the world.

With its rich infrastructure and endless opportunities, London is a magnet for entrepreneurs looking to build successful businesses. According to a recent forecast by GLA Economics, London is expected to see around 2% year-on-year growth. That might not sound like much, but with a GDP of £508.4 billion in 2022, even small growth can translate into major opportunities. So, if you want to start a business in London, you’re in the right place.

That’s how we started, just a few humble accountants in London, with some legal experts thrown in for good measure. London was a great starting point for Accounts and Legal, so we thought we’d share what we’d learned along the way.

Read more: Our success.

But enough about us for now, let’s get into how to start a business in London.

 

Advantages of Starting a Business in London

London is considered one of the most diverse cities in the world, with a 36.4% foreign-born population. No matter what you’re trying to sell, you’ll probably find someone who’s looking to buy it.

Therefore, by really putting in the work at the beginning you should be able to find a target market for your business.

Learn more: Finding your target market.

London is home to a very strong pool of workers, as people from all over the UK and the world move to the city every year to find better opportunities.

Having access to a strong pool of workers means you shouldn’t have much problem finding the right one for your business. However, you may have to expect to pay more for an employee compared to the rest of the UK.

Finally, London is built for business, with a wide range of support available for those starting. Support ranges from small loans to free co-working spaces.

 

Disadvantages of Starting a Business in London

Although the capital can be a fantastic place to start a new company, there are some disadvantages to starting a business in London.

First, the big one, the cost of living is extremely high in London compared to the rest of the UK. If you’re paying more, you’ll need to earn more. This means your business will need to generate significantly higher revenue to cover the increased expenses and remain sustainable.

Compared to the rest of the UK, you’ll be paying more to rent shop fronts and/or office spaces as well as paying staff higher wages to stay competitive.
When starting in London, you must keep a close eye on your incomings and outgoings to just survive in some cases.

Another disadvantage to setting up in London is the competition. If you’re thinking of starting your business in the capital, you won’t have to look far to find tens, maybe hundreds, or even thousands of other businesses already competing with you.

If you’re not bringing anything unique to the table you may find it very difficult to get your foot on the ladder. London has both the highest new business birth rate and death rate in the UK, so you’ll need a very solid business plan to find success in the big city.

Luckily, our London accountants are here to help get you up and running. Get in touch if you need support with your business.

 

How to start a business in London

Now we’ve dived into the pros and cons of starting a business in London, let’s help you put together a plan.

Here are our top tips for starting a business in London:

 

Find your target market

Once you have an idea of what you want to sell, you’ll need to find a group of people who’ll want to buy it. Finding a target audience helps you adapt your product or service to fit their needs, it’ll also help you find your USP.

You can find your target market through a few means:

• Research competitors, who do they advertise to?
• Read existing research on the topic
• If you’ve already started your business, look into who’s buying your product.
• Get out on the street and ask people their opinions.
• Hire a company or individual to carry out a survey for you.

 

Find a Unique Selling Point (USP)

Your USP will be what makes you stand out from the heavy amount of competition you’ll be up against. Unless you’ve invented a completely new product or service, you’ll need to find some adaptation to an existing one to be successful.

Remember, being unique doesn’t mean you need a crazy, groundbreaking, idea. Your unique selling point could be something as simple as being cheaper than your competitors or having a more convenient website.

 

Get Yourself Financed

Unfortunately, if you want to start in London, you’re going to need a large amount of cash. So, before you do get started, you’ll need someone to finance your business, this can be done through a few different means:

• DIY finances (using your savings)
• Funding from friends and family
• Seeking out a personal loan
• Equity financing
• Seller financing
• A mixed approach

 

Be Competitive in More Ways Than One

Once you’ve found success, you may wish to expand your business and take advantage of London’s massive opportunities. While you expand, you’ll probably want to hire a few staff members to help you on your journey.

To attract the right staff, follow these steps:

• Offer a competitive salary and/or perks
• Be Flexible
• Show off what you stand for
• Offer career progression
• Create equal opportunities

For the top staff, it’s extremely competitive in London, so you’ll need to tick all the above the be in with a chance of landing your dream candidate.

 

Get an Accountant

Starting as you mean to go and getting your finances in order will help you stand out in London’s fiercely competitive market.

If you’re looking for one of the best accountants in London then look no further, we’re here to help. Get in touch with us today to make sure you’re saving every penny you can!

 

Should you Start a Business in London?

London offers a dynamic and competitive business environment, packed with opportunities for growth and expansion. However, to give your business the best chance of success, you’ll need a solid business plan to secure the funding necessary to navigate the challenges ahead.

Standing out in this crowded market means bringing something unique to the table new ideas that excite customers and differentiate you from competitors.

Attracting top talent may require extra effort, as you’ll be vying for the best with many other businesses.

Every penny will count. Careful financial management and tax planning will be essential to keep your business profitable and efficient.

In return, London gives you access to one of the world’s most diverse and affluent markets. If you get it right, the potential is limitless. So yes, starting a business in London is a smart move, but it requires meticulous planning and execution.

Need help setting up your business? Speak to our London accountants today for expert support.