The Case For Buying A Franchise Business In London
London is the heart of the UK. Rarely would anyone ever visit England without seeing what this fantastic city has to offer. Being a tourist hotspot and the busiest place in Britain means that the capital is certainly appealing to those that want to start their own business.
However, setting up a startup from scratch can be risky, especially in such a competitive marketplace. Here, we look at some of the challenges you may face and explore how a franchise business in London can overcome them.
London is expensive, we all know that. The costs for a solo enterprise are no exception. Depending on how you plan for your business to operate, start-up costs can include premises, equipment, market research, recruitment and salaries for staff, business rates, marketing and advertising, insurance, and professional fees.
Although some of these could be reduced by using companies outside of London, costs like premises and staff salaries are simply higher in this part of the UK and are thus unavoidable. And there’s no guarantee that your investment will pay off…
One of the main issues with starting a business in London is that everyone else also wants to. The city has the highest number of businesses in the UK, with 2017 statistics revealing that 1.1 million of the 5.7 million private sector businesses are in London.
The number of startups was up from 14% (2015) to 15% (2016) – unfortunately so was the number of businesses that ceased trading, increasing from 11% to 12%. In 2016, 17% of British businesses were located in London, which was the highest percentage of any area in the UK. In the same year, 14% of businesses located in the capital had to close – again topping the regional charts.
With a number of businesses failing in their first five years, it is apparent that this is significantly more likely to happen in London if you don’t have the right support networks in place.
The continuous change
London is in a constant state of development, which is no surprise given its population size and the fact that it is growing at twice the rate of the rest of the UK.
The market is completely different to the rest of Britain, too; you cannot assume best business practices or expect them to stay the same. You need to keep constantly up to date with the latest industry happenings and adapt to the needs of the city, otherwise your startup could be left behind.
The solution: start a franchise business in London
Depending on what you want out of a leadership role and your reasons for starting a business, franchising could be the solution to all the problems that a London solo enterprise presents.
In terms of risk, the failure rates of franchises are significantly lower than that of SMEs, and a record 97% of franchisee-owned businesses reported profitability in 2015. It is clear that a franchise business in London benefits greatly from being part of an established brand with the infrastructure, support and reputation already there to help you succeed.
When it comes to finances, there will be no wasted investment. With Rainbow, we can help you source working capital if necessary. As well as assisting you in calculating the amount required, we can also introduce you to the top UK banks who are willing to fund as much as 70% of our partners’ investment.
Both going it alone or starting a franchise business demands hard work and commitment. However, by taking advantage of the franchising opportunities in London offered by Rainbow, the risk is massively reduced. The issues of costs, competition and the ever-changing market will not seem quite so daunting.
We have numerous territories for sale in London right now with Rainbow, so you can seize the chance to build a long-term, profitable management franchise. For more information about London and franchising, we’re available on 01623 675185, or you can also book a call with our team today by visiting our Next Steps section.