According to the Federation of Small Businesses, “In 2021, there were estimated to be 5.5 million UK private sector businesses.” Thanks in part to the pandemic, the number of small businesses decreased by nearly 400,000 within a year!
No matter the city, running a business can be challenging even for the big players. More of the essence, there are obstacles such as ULEZ, the congestion charge in London, and high transportation costs that have had a negative impact on conducting business in those large UK cities once considered the crème de la crème.
The landscape is evolving and operating a big business in cities such as London has become more demanding for owners than ever.
What does this mean for the future of small business owners? Could this be a positive change?
Business Opportunity in Large Cities
Understandably, large cities in England such as London, Birmingham, and Bristol have become bases for major businesses. These cities among others have served as the headquarters for companies that have existed for centuries.
Metropolis cities were designed to support enterprise. Not only are these cities important politically, but their business influence may be even more substantial. From technology giants to financial institutions and pharmaceutical companies, British cities have historically been very business driven.
At one-point, large cities were very attractive for running a big business thanks to plentiful real estate and a large population to hire from. The construction of massive buildings such as skyscrapers became a popular occurrence.
Companies wanted to have a presence in London, Bristol, and other well-known English cities. Why? Simply, these cities became the epicentre of the UK’s business world.
Obstacles That Have Negatively Affected Large City Attractiveness
As these cities became more populated and gained greater business influence, the more expensive they became. This is far from uncommon. Major American cities such as New York, Chicago, Boston, and Los Angeles have become far more expensive as they grew in influence.
It’s not just businesses that have been hit by increased rents – the cost of accommodation for workers has increased too. This has forced many employees to live in the suburbs of a city or even further afield. With such a commute, it is not surprising that transportation costs have additionally increased.
London
London has a few specific obstacles that have decreased its business attractiveness. These include ULEZ and a congestion charge.
ULEZ
The Ultra-Low Emission Zone, ULEZ, is an area located in London where all cars in it must be manufactured to specific environment-friendly standards or pay a fine. The goal of creating the ULEZ was to help decrease city-centre pollution.
Initially, the ULEZ was located in the Congestion Charge zone. In 2021, the area of the zone expanded.
Though the ULEZ has had some positive influence on London’s pollution, it has forced people who own older cars to have to pay even more for their work commute, making the appeal of London slightly less so.
Congestion Charge
The congestion charge in London was developed to better control traffic congestion. It was first introduced in 2003.
If a person drives through the congestion charge zone between certain times throughout the week, they will be forced to pay £15 (once daily). The hours in which the congestion charge is in effect are dictated by the day of the week.
Particularly important to work commuters, the zone is in operation between 7 AM and 6 PM. Not only are commuters paying for gas and possibly ULEZ, but they are likely to pass the congestion charge zone to get into London.
How Obstacles Could Potentially Impact Large Scale Businesses
Some may deem these charges small, but they can add up. The ULEZ and London’s congestion zone are just two obstacles employees may face. Since major companies usually have a large employee base, a majority of employees will be susceptible to such charges.
Since the pandemic began in 2020, employees have grown accustomed to the possibility of remote or hybrid work. In turn, employees may not be as willing to commute daily, especially with gas increases and the aforementioned motoring fees.
Consequently, large-scale businesses and their relationship with major UK cities have been directly affected. These businesses have or might consider different approaches including remote work, hybrid days, and even possibly relocation (or development of new offices in less crowded areas).
How This Helps Small Businesses
As large-scale players create strategies to satisfy their workforce, small businesses may have the ability to flourish in major cities.
Why? Small business leaders not only have access to a greater talent pool but have far more opportunities. There is a diverse selection of clients that would be great candidates for the small business’s products or services.
If a small business is particularly involved in the public sector, location can make such a difference. Due to the company having a base in a major UK city, it can be much closer in proximity to potential clients.
With regards to discovering talent, many young, talented, and energetic people as well as experienced veterans are located in well-known cities and are searching for their next position. A small business can find the best of the best and this can help grow the company to the next level.
There are prices to pay with a presence in a large city, but for small businesses, the benefits can be well worth the downsides.
Use Major Cities to Your Advantage
If you are a small business owner or leader, this is an exciting time to explore or be in one of Britain’s major cities. There are risks and you will have to carefully deliberate if a presence in these cities is the best decision for your company.
As highlighted above, one of the key benefits of being located in a major city is having closer access to valuable potential customers. Cities offer a significantly larger number of clients to have conversations with.
How do you get in contact with such clients in the most efficient way possible? Using a contact finder is a great starting point. To learn more about contact finding and how to reach a public sector audience, register for free today.