Business benefit of a London address
London is a great place to do business. It's a global city with global connections - perfect as a jumping off point, or for clients to visit. As the UK's capital city, it is the focus of one of the world's biggest economies. And London's population of nearly 9 million includes a talented, energetic and highly-educated workforce.
Other UK regions vie for attention, but London remains pre-eminent - the location of choice for major multi-national businesses and entrepreneurs alike.
This report explores the reasons why a London business address is an unparalleled asset. Our survey of British business executives demonstrates how and why they value London and the opportunities it affords, from the way their businesses are perceived to the connections they can create with customers, suppliers and investors.
In the next section we move from the abstract to the practical, exploring a real-world rationale for setting up in London to see how people have achieved success and looking at:
- - The traditional connotations of a London address
- - What is real-world success in London like?
- - Start-up culture
Finally, there is an overview of the main London districts that companies flock to, outlining the things that characterise different areas and the industries that call them home.
UK entrepreneurs believe a London address means success
As a centre of global trade and finance for centuries, London has long been considered the home of business. The city is bursting with headquarters of multi-national corporations, household names and worldwide brands. But it's not just a place for global giants - our survey of small and medium sized business owners shows that the capital remains the most prestigious location for organisations of every size.
Of the 448 entrepreneurs and executives surveyed by LEO, 64% say they would choose London for its great access to customers, while another 51% believe that being in London creates a better perception of their business. It's a key place for start-ups, with London's talent pool and access to investment creating exactly the right sort of climate to create success.
And it’s not just the city itself that makes for a great climate, it’s also the quality of the office spaces themselves for the people that work there. London serviced offices are a great option for businesses, offering a seamless and welcoming experience with staff to supply everything from catering to office support. And for growing businesses wanting to base themselves in the capital but still working to establish themselves, there’s always the option of virtual offices in London. This way they can enjoy the coveted ‘0207’ telephone code without having to deal with large overheads, until they’re ready to move to the capital.
Confidence is high - 57% of those surveyed think they could achieve annual growth of at least 20% by locating in London. And for anyone who thinks that technology has created a world of digital disconnection so that it doesn't matter where you are based, our survey has a counter-intuitive result - businesses recognise that they need to be close to their customers to be successful.
There is also a strong indication that new businesses thrive in the capital, with 58% of SME executives agreeing that start-ups in London have a better chance for success than elsewhere. Part of the attraction of London is the clustering of industries in different locations. Technology companies value the opportunity to locate in the silicon roundabout area around Old Street, financial entrepreneurs want to be in Bank or Canary Wharf, while law firms can choose between Mayfair, Chancery Lane and Cannon Street. The survey indicated a strong attachment to the traditional centres for different industries within London.
Where would you set up a luxury goods business?
Where would you set up a tech business?
Do you agree with 'Startups in London have a better chance for success than elsewhere'?
Do you agree with 'For a business to be successful, it needs to go where customers are'?
Opportunity for yearly business growth in London
Where in the UK would you start a business?
An overview of the industries and districts involved in the survey
As one of London’s most affluent areas, this district in the west end of the capital is the place to find luxury brands of all kinds: hotels, restaurants and exclusive retail outlets. With embassies and private members’ clubs scattered around the area, there is no shortage of potential clients for high-end services. Law firms and financial services companies that cater for high-net worth individuals are clustered here, and they benefit from the cachet that comes from a Mayfair address.
A five-star luxury hotel that is also home to a 3-Michelin-starred restaurant
Increase in investment from private equity firms, investment banks and hedge funds over one year
Estimated investment over the next five to ten years in the area
Once a satellite to the City, Canary Wharf is increasingly becoming its rival with major international banks and financial services companies based on the skyscraper-filled island. Development has spilled out from the Wharf into surrounding areas and it has become increasingly popular as a shopping destination with high-end retailers opening in the area. Fintech start-ups are also beginning to use Canary Wharf as their base, with one of London’s largest accelerators based here.
Number of people employed in the Canary Wharf area
Amount added to the UK economy each year from Canary Wharf and the surrounding area
Number of minutes it takes to get to the west end
The medical profession has long considered Marylebone to be its home, with Harley Street and various professional bodies located nearby. The High Street is famous for its exclusive restaurants, art galleries and elegant boutiques and there’s no shortage of either luxury brands or customers brandishing credit cards. With the major West End shopping districts of Oxford Street and Regent Street on the fringes, it’s ideal for anyone targeting retailers.
Amount of future investment in Marylebone
Number of underground stations within approximately one mile of Marylebone
Number of Michelin star restaurants in the area
Ten years ago, Kings Cross would have seemed out of place compared to some of the other names on this list but this area of north London is experiencing a major revival and is already London’s Next Big Thing. The Eurostar terminal is now ringed by exciting new destinations including Europe’s largest biomedical research centre, a refurbished canal district filled with art galleries and restaurants, and Google’s UK headquarters. With easy access to London’s university district, King’s Cross is a hot new start-up location.
Amount of investment over the past 10 years in Kings Cross
Number of jobs in and around the area
The new postcode introduced in 2010
This hipster hotspot is east London’s rising star. Shoreditch has been popular with artists and creative industries for decades, but more recently has begun to attract tech start-ups of all varieties. With Transport for London and the Financial Conduct Authority setting up head offices in the area by 2018, there are signs that this will become a major Fintech hub. Also good for fashion brands and boutique luxury goods.
Value of loans granted by Start Up Loans to small businesses in Shoreditch
Based in Shoreditch and sold to CBS Interactive in 2007 for £140 mil
The name given to Shoreditch and the surrounding area due to the large number of tech companies present
The traditional heart of the City remains an impressive place to do business. The Bank of England is at the centre of a constellation of major financial services headquarters as well as a great many smaller finance-related firms, not to mention a host of traders and markets including the London Stock Exchange and AIM. Bank is not just about finance though – several city law firms are also based nearby, not far from Royal Courts of Justice, and some luxury retail outlets.
The number of tonnes of gold in the Bank of Englands reserve
Value of the gold stored in the Bank of England
Number of businesses in and around Bank
East London Tech City, Silicon Roundabout – there are several names for the area surrounding Old Street roundabout, but they all point to the same phenomenon: a hive of tech start-ups changing the world one line of code at a time. Major tech players like Google and Amazon and young upstarts are cheek-by-jowl in this lively and thriving district, with restaurants galore. Tech has been joined by academia, Fintech and a growing number of investors keen to take their slice of the action.
Number of new businesses in the new nearby area
Number of Silicon Roundabout companies valued over £1bn
Percentage growth of tech companies in London from 2009 – 2012
Kensington Palace has been the centre for the highest British social strata for generations and the presence of embassies and high commissions from all over the world confirms that not much has changed. There are many leading fashion brands and retailers on Kensington High Street and the surrounding area, with exhibition centres supplying a regular stream of trade fairs. With Notting Hill just a short walk away, Kensington has plenty of potential customers.
Amount of capital MMC Ventures, based in Kensington Square, have to invest in businesses
Location of one of the world's most famous luxury department stores
Number of minutes it takes to get to King’s Cross
The area between Fulham Road and the Thames has been the ultimate destination for the young and the beautiful since the Sixties and the latest generation of bright young things is just as keen on the King’s Road as their parents were. Boutiques, art galleries, fashion houses and chi-chi restaurants jostle for attention and create a buzz all the way from Sloane Square to Stamford Bridge.
Number of Michelin-starred restaurants in the area
Number of nearby stations
New startup survival rate, among the highest in London
The real-world rationale for moving or starting up in 2017
1.The prestige of a London address
The cachet that comes from rubbing shoulders with organisations like HSBC, Shell, BP, Barclays and Glaxo Smith Kline is hard to beat. London - like Paris, New York and Tokyo - is one of the cities that has defined the world, and that has been largely down to the businesses that they gave birth to.
It's no coincidence that some of the most successful entrepreneurs in the last 50 years have started their businesses in London. In 1970, a 20-year-old named Richard Branson was on the way to creating his Virgin megabrand with a small mail order record company and a shop on Oxford Street. Philip Green, Alan Sugar and the men and women behind Vodafone, Carphone Warehouse, River Island and LK Bennett all created fortunes from modest start-up enterprises in London.
Start-up culture is strong in London, but the traditional slant from the British capital is distinct from the younger environment of San Francisco, for example, where new start-ups with interesting business models have opportunities of a different type. Being at arm's length from the major centres of business can be useful for start-ups which need a period of incubation; London's unrivalled connections to the rest of the world, and its pools of talent and financing, make it ideal for young businesses aiming to grow.
2. What is real-world success in London like?
The theory of setting up in London is compelling, but developing a high-growth, disruptive business requires more than just a killer idea. London provides start-ups with the tools and people to translate concepts into reality.
When considering start-up success stories in London, it's hard to look past Fintech. There are dozens of companies at the cutting edge of financial services that have grown from seedlings into thriving businesses in the past decade. Consider Transferwise, which is revolutionising international money transfer through peer-to-peer technology that cuts out traditional bureau de change commissions.
In both cases, the entrepreneurs managed to leverage many of London's unique qualities to break through. The proximity to investors helped the founders to find venture capital funds with seed funding, while being Europe's financial sector hub meant there were plenty of potential customers to pitch to and develop relationships with, without having to jump on a plane to reach the decision-makers.
These two success stories, like many others, also benefited from the credibility boost that comes from being in London, riding the perception that businesses in major London destinations are serious and significant.
3. Start-up culture
The search for the next billion-dollar unicorn is no longer confined to Silicon Valley or China - London is the new hunting ground for investors. There are 44 business accelerators in London, the majority of which are backed by tech giants like Google, Telefonica and Microsoft, as well as banks like Barclays and JP Morgan. There are also several university incubators, plus accelerators focused on property, fashion, health, media, food and drink, education and enterprise.
Funding is available, with strings - the British government funds several schemes through organisations like the Technology Strategy Board, the Regional Growth Fund and the Enterprise Europe Network. Groups like the UK Business Angels Association provide a starting point to find venture capital and other seed funding, and the chance to network to find the person who will help you move on to the next level.
London's start-up scene has become increasingly sophisticated, with rigorous due diligence becoming the norm for investors and high levels of competition from start-ups looking to get onto the better-known accelerator programs. But with the scene continuing to grow, there is nowhere better in Europe to find the right opportunity.
Our survey shows that entrepreneurs and SMEs are wholeheartedly enthusiastic about London. They have high expectations for growth, love the capital's superb networks and are fully subscribed to the opportunities offered by strong industry hubs.
Start-ups particularly benefit from being within London's business ecosystem. The start-up community helps nurture new ventures and thrives when there are fewer boundaries. Coming together is good for everyone, even competitors - customers, clients and employees all love the buzz that happens when an industry forms a community.
The excitement in London business culture is clear from our research, and has built on the city's success in the 20th and 21st centuries. The wealth of the City of London and Mayfair has not been supplanted by the newer areas of Shoreditch, Canary Wharf and King's Cross - they have created new opportunities and new ideas that have added to the merry mix of London business life. There has never been a better time to look to London for the next big break.