- 30 June, 2016
Business Funding! Government Support Requested for Help SMEs outside London
London has by far been the main focus of Government when it comes to helping Businesses Grow. SMEs in other parts lack financial support to grow. Government is asked by Business Funding Experts to resolve issues faced by Entrepreneurs outside London.
London has enjoyed full support from Government in the past. As the Capital of UK, Businesses residing in it were also encouraged using Various Financing Schemes to help them start-up. SMEs in particular have gained support due to these initiatives by Government. Schemes like LCIF (London Co-Investment Fund) played a major role in financing Tech based businesses in London.
The Capital has proved to be troublesome for SMEs (Small & Medium-sized Enterprises) in a variety of ways. These problems have led many companies to get the encouragement of moving out to other cities. The lack of financial support offered for other parts is acting as an obstacle for them.
Tech Businesses in London
London Based businesses do whine about the fact that the availability of skilled labour in London is what restricts their growth. Tech companies complained about the shortfall of labour in the city. They regarded this to be one of the reasons for their shortfall in achieving good results.
Increasing Costs in staying in the City has also contributed to the situation. General cost of living is relatively high in London as compared to other cities. Higher costs acts as an obstacle for small businesses to grow. Cost constraints restrict the amount of success that could be achieved because of the scarcity of resources in start.
Potential in Other Parts of UK
Some Businesses even have taken steps to move on to other Cities for growth. ASOS, an online retailer, chose Birmingham for its new Office. Company’s CIO (Chief Information Officer) stated that it has proved to be quite successful in their decision. He said that it was perfect for them to shift and growth prospects in London were low. The costs were also low as compared to their London office.
Experts say that its time that the forefront of the Government’s focus should move on to other regions. They stated that the potential in other regions of the country have been undermined ever since. It is time to invest in cities like Birmingham and Manchester where potential is quite high and growth is expected.
London-centric politics have always been criticised to be taking up too much from the region. Businesses in other parts get little or no attention by schemes which try to help start-ups. Venture Capitalists such as CrowdCube have helped many SMEs in London in respect of Fund raising. However they have assured that they are trying to change that fact and move on to businesses elsewhere too.
Many would argue that Government is in fact being Region-centric. This is said considering the Tax Revenue that is earned from London with the amount spent on it. Even then London being the prime focus is causing the whole region to face problems. Subsidies for other parts because of it are halting the economy’s progress.
What needs to be done?
It is important that small businesses in other cities are also supported financially to help UK economy. London even with all its Good is taking up unnecessary attention at the cost of sacrificing the potential found in other cities.
Luke Lang, CEO of CrowdCube, stated that schemes similar to LCIF can be used to finance businesses across the region. It is essential to provide Entrepreneurs with sufficient funds and resources to prove their business model right.
Reference : http://lcif.co
The planned schemes would provide the individuals with a Partner who would help finance the Business. He would also be advising on how to let the business grow. This partnership will make sure that the Entrepreneur gets the right type of advice from an expert so that the business results in success.
Reference : http://www.entmagazine.com/start-ups.html
Economists and other Experts have asked the Government to move away from London and launch similar schemes for Businesses in other cities. This will lead to an increase in the Economy of UK as a whole. It will help encourage people to move away from the over-crowded city. Government taking notice has announced an £11m fund for tech businesses in Leeds, Sheffield and Manchester. This was incorporated in the March 2015 Budget.