Much like our ancestors voyaged out into the unknown on ships in the days before the world was mapped, entrepreneurs are the courageous adventurers of today. They risk their livelihood to follow a passion and take the chance on establishing their own business, when the odds are always stacked against them and the destination unknowable.
Four in ten small businesses don’t make it to their fifth anniversary, and the investment required to get the dream off the ground can be eye-watering: according to a LDF report, the average cost of starting a SME in the UK is over £27,000.
Of the many challenges facing a would-be entrepreneur, one is trying to identify where demand outstrips supply – where is there a ready market for the service or product you hope to sell? Perhaps you make cupcakes – where is there a lack of cafes? Personal trainers might want to know where the fitness enthusiasts are feeling underserved. Intriguingly, it appears that Aberdeen is the answer to the latter, and potential cafe owners would do well to consider Cambridge.
This insight comes courtesy of new research that analysed over 154,000 Google search terms and 63,000 national business listings for 59 UK cities to find out where the online demand for local services outstrips supply. As 94% of people in the UK use search engines to find local businesses [Consumer Barometer Survey, Google, 2015], the method is a cogent means of establishing consumer appetite.
Overall, the historic city of Oxford presented the location with the strongest new business opportunity, ahead of Inverness and Cambridge in second and third place respectively. Oxford – despite being named as the country’s least affordable place to live – records high average wages that leaves residents with ready money for spending. The average Oxford-dweller has over £400 per month in disposable income, and as the research suggests there is a gap between local businesses and the online interest, Oxford could be a choice location for new businesses.
On a more category-specific level, prospective accountants and car wash businesses should take particular note of Oxford – it is this city where the difference between online interest and supply is largest. If you are considering opening a grocery store however, Cambridge is a compelling prospect, and the same is true for bakeries.
Further north, online consumers in Inverness are seeking cleaners, in Hull it’s landscape gardeners, while in Londonderry there is a demand for handymen. This information is available on an interactive map created from the research, providing a useful tool for prospective business owners around the country to support their own market research, cost analysis and risk assessments. With an additional string to their bow, would-be entrepreneurs can feel more confident of their decision to take the plunge by recognising where there is a demand for their services.
Any additional knowledge can only help make the life-changing decision of starting a business, an act that can seem an even greater challenge amidst these uncertain political times – but upheaval can present opportunities. Withdrawal from the EU gives small businesses a bigger role to play as they become vital in replacing the supply chains that are based on the Continent and creating the products that are currently imported from our European neighbours.
There have also been a few wins in the recent Budget, with the government offering a cap on business rates for some small businesses and a £300m fund for local authorities to offer support. Vocal commitments from the newly-appointed Business Minister Michael Fallon to make the UK “the best place to start and grow a business” provides further encouragements, and there are plans to “abolish or substantially reduce” at least 3,000 regulations via the ‘Red Tape Challenge’.
With all this in mind, the time is ripe to embark on the entrepreneurial voyage. This new research can help support would-be entrepreneurs to make informed choices and ensure they are taking the supply to meet the demand, hopefully setting sail for the islands of plenty!