The bright lights of the big smoke are losing their appeal to small businesses post lockdown, with new research from Hitachi Capital Business Finance suggesting a large number of London-based businesses are considering moving out.
With research by the Office of National Statistics finding that the number of Londoners leaving the city has reached a 10-year high, the results suggests that small London-based businesses might be following suit, with 24% of firms in the capital saying they would consider relocating their office in a different part of the UK – the equivalent of around 270,000 businesses.
Asking a representative panel of small business owners which parts of the country they were considering moving to and reasons why, the results found:
- Coastal retreat – combining the buzz of business with the beach on its doorstep, Brighton topped the list of alternative cities small business owners were considering. Of those considering a move, 25% had Brighton in mind. The sea was also a factor for 13% plotting a move to Southampton, and 8% moving to Plymouth.
- UK’s second city? – Manchester pipped Birmingham to second spot on the list. One in four (25%) small businesses in London planning a move were considering Manchester, slightly ahead of Birmingham (21%).
- North of the border – also high on the list, one in six (17%) small businesses were considering a move to Glasgow, with the same proportion looking to Edinburgh.
- Northern Powerhouse – following recent years of investment in the North of England, London small businesses were now considering a move. In addition to Manchester, a further 13% were considering Leeds, and 13% Newcastle.
Motivations to move
Asking for reasons why small businesses were looking elsewhere to set up, and what they would look for in a new location, it was low air pollution that came top of the list (22%). This was followed by open spaces and access to countryside (21%), and low local crime rates (21%). Room to grow as a business was also a factor (20%).
Proximity to clients and customers was only a priority for 15% of small business owners in London, and 14% felt the need to be close to suppliers. Meanwhile, 21% said the proximity to home was core.
Separately, a quarter said that good broadband was central to their ability to operate as a business.
Joanna Morris, Head of Insight at Hitachi Capital Business Finance comments: “It seems the pandemic has been an eye opener for businesses across the UK but especially in London, prompting many to re-evaluate what their city offers them in terms of tangible business benefits. Technology has opened up a range of possibilities, and many are now considering seizing the opportunity – for both the business and its employees. The situation many found themselves in during the pandemic has given owners the confidence to commit to a new way of working, with many of the previous unknowns - how the business will work, the balance of life and work, and so on – less of a mystery.”
“Inevitably, there will be risks with any big business decision such as this, and the cons needs to be considered alongside the pros. At Hitachi Capital Business Finance, we work with businesses to establish a long-term plan, which helps to minimise risks and navigate through any obstacles to overcome.”