Many people have aspirations of setting up their own business and working for themselves but never actually go through with it. There are many reasons for this, but the fact that it can be a huge financial risk is probably somewhere near the top.
How can you make it work? What factors should you consider to increase your success rate?
UK-based business Plusnet recently surveyed 1,000 British start-up owners, asking them where they set up and how it affected their fledgling venture. Here are some key takeaways that could help you when starting a new small town business.
Resist the Lure of a Bigger City
One of the biggest things to take from the research was that many British entrepreneurs steer clear of the capital city of London. Instead, they chose to start their business closer to home. 72% of the businesses in the survey were based outside the UK’s largest business hub, with 67% of the entrepreneurs setting up in the city or area they’re from.
With vibrant cities all over the country, it seems that new business owners are prioritizing access to local amenities.
The northern city of Newcastle has the highest number of home-grown entrepreneurs with 81%. This is followed by 79% of people in the home of the Fab Four, Liverpool. With easy transport links to the capital, including a new high-speed railway due by 2033, working away from the big city isn’t an issue.
Use Your Local Connections
Setting up your business in the city you come from has many benefits, including one that money can’t buy – your in-depth local knowledge.
Having lived in an area, 58% of business owners said this was one of their deciding factors. Not only does this mean you’ll know the geography of the city, 36% said they already knew the city was well suited for a business in their industry.
Another factor of great importance is being able to use existing local connections to your advantage. 61% of business owners said this was a big factor in choosing their home city as the place for their start-up.
These connections can make a big difference in helping your business make an impact and survive those difficult early months.
Familiarity is the Key to Success
Building on that point, the research shows us that the familiarity of home is likely to increase financial business success. When looking at businesses with a turnover of between £400,001 and £500,000, 86% of respondents said they’d set up their business in the city of their birth. This is compared to 51% of respondents with a company turnover of $50,000 or less who set up at home.
This research clearly demonstrates the fact that setting up your business in your home city can put you at a distinct advantage. It can open doors by using existing connections and your knowledge of the local area.
Let Your Home Inspire You
For younger entrepreneurs, the love they have for their home town can’t be underestimated. In fact, 74% of 22 to 37-year olds stated that their home town had a positive impact on their decision to start their own business.
Wherever you are in the western world, our cities are constantly changing. There are new brands appearing regularly – from local craft beer bars to multi-national franchises. This change could be responsible for the inspiration of a generation.
There could also be cultural factors at play in this decision making. There’s often a sense of pride when it comes to our hometown. Marketers purposely target potential customers with local references and brands use inspiration from the local area in stores and branches.
Perhaps left with a more traditional view of their city, only 45% of over 55s felt the same inspiration to stay home and start a business.
Keep a Back-Up Plan
Moving to another city comes with a lot of risks and a potentially large financial burden. This provides another reason for staying home a better alternative.
Of the business owners between the ages of 23 and 37, 75% set up in their home town compared to 39% aged over 53. This suggests that staying close to home is a trend being led by young people.
The financial benefits of staying at home can be a great help to new business owners.
For instance, the overheads of having to move to a new city and find accommodation can be high. Staying in the family home, however, lowers these costs. Also, if anything were to go wrong and you’re left needing urgent help, having family close-by is incredibly convenient.
With a whole generation of inspired entrepreneurs starting businesses all over the world, it’s an exciting time to create something new. There are always going to be risks when you start a new business. Plus, it’s likely that there will be some ups and downs with your start-up. However, it seems many of these could be kept to a minimum by setting up your home town.