There are some obvious benefits to having your business based in a city. They tend to have a great buzz and good transport links, making it easy for staff and customers to reach you. But for many companies, an out of town location may be a much better option. Here are five reasons to locate your business outside a large metropolitan area.
1 Less intense competition
Tariq Khwaja had been MD of a large PR agency in London for some years when he decided to start his own marketing and PR practice, TK Associates. The west end of London, in particular, is well-known as a creative and media hub and is bursting full of agencies, so setting up in the capital could have simply felt like the thing to do. But he realised it would be incredibly difficult to stand out as a new small business in such a crowded market – and there was no particular need for his firm to be in London. “It would have been near impossible to stand out and get found in the massively overheated London creative melting pot – but it’s far more achievable in Surrey.”
2 Lower costs
Operating costs are generally much lower outside big cities. This particularly applies to the cost of business premises, which can be eye-watering in city centres. Staff costs outside big cities can also be much more affordable. Using the premises and staff costs of a typical 100-person company as its model, a recent study found the hypothetical company would save £2m a year by being based in Hastings instead of the west end of London*. The savings in housing costs for the firm’s staff would also be huge.
3 Security
Sadly, today’s major cities come with increased security threats – specifically terrorism, as we’ve seen from recent tragic examples.
A few years ago, tech company MIGSOLV decided to start its own commercial data centre. Most UK data centres are based in London and the other big metropolitan areas, but these face significant risks. So MIGSOLV looked elsewhere and purchased Norwich Union’s former internal computer facility in Norwich, Norfolk. The company refurbished the facility into a state-of-the-art data centre called The Gatehouse, which is now one of the most secure in the world. It faces virtually no risk of terrorist attack. And, at 39 metres above sea level, it’s not at risk of flooding for at least 1,000 years, according to the Environment Agency.
David Manning, managing director at MIGSOLV, says: “In many ways, extremely high security is actually our core product: it’s the reassurance we give our customers that their business-critical data is safe with us. So we need to be in the most secure location possible.”
4 Out-of-town edge
You shouldn’t assume your core customer base is in the heart of a big city. Khwaja’s TK Associates is based in Walton-on-Thames in Surrey. Its clients, many of which are in the property, local government and tech sectors, are spread across south-east England and have no need for an agency in London. In fact, TK Associates has found many businesses will avoid London firms because they know they will be high cost.
Khwaja explains: “For many companies, the fact we’re a non-London agency is actually a big plus. Savvy clients want their fees to pay for experienced marketing advice, not enormous overheads.”
5 Quality of life
If you scour through the 2016 Halifax Quality of Life Survey, which named Winchester as the best place to live in the UK, you will be hard-pressed to find an urban location near the top of the list. While some people love the buzz of big cities, others dislike their noise, pollution, overcrowded transport and busy streets. A hectic city can bring an extra level of stress you could do without, while basing your business elsewhere could give you a more pleasant, healthy and productive working environment.
*A study commissioned by economic development company Sea Change Sussex based on property cost data from DTZ (now Cushman & Wakefield) and staff cost information from PayScale.
Content on this page is paid for and produced to a brief agreed with Kia Fleet, sponsor of the Guardian Small Business Network Accessing Expertise hub.
