News in brief: cities, cyber-attacks, funding, flexible working, Valentine's Day

News in brief
News in brief

Bristol named as top city for start-ups in 2016

Bristol has been named the top city in the UK for entrepreneurs to start a business in a study of the nation’s most populated locations conducted by University College London’s School of Management.

Towns and cities around the UK were scored on their availability, quality and cost of amenities provided for entrepreneurs, including broadband spend, cost of central office space and value or start-up loans in the area.

The UK’s top 10 cities for entrepreneurs are:

• Bristol

• London

• Birmingham

• Brighton and Hove

• Nottingham

• Edinburgh

• Liverpool

• Belfast

• Cardiff

• Leeds

Topping the table for broadband speeds and well above the UK average of 26Mbps are Bristol and Portsmouth, at 33.8Mbps, while Hull provides less than half the speeds at 14.1Mpbs.

Central office space is, understandably, at its highest price per square foot per month in London, at £52.50. Outside of the capital, office costs an average of £3.16, with all but Belfast, Brighton, Cambridge, Edinburgh, Exeter and Leicester falling below this cost.

London steals first place for the average value of funding accessed by start-ups, at £1,038 per new business, followed some way behind by Sunderland (£720) and Hull (£552). Start-ups in Leicester received on average just £132.

SMEs underestimate the effect of cyber-attacks

UK small businesses are underestimating the impact a cyber-attack could have on their reputation and must take steps to protect it, according to the Government’s Cyber Streetwise campaign and KPMG.

Despite the vast majority (93%) of small businesses surveyed thinking about their company’s reputation frequently or all the time, they are not considering how a breach could affect it. In fact, less than a third (29%) of small companies surveyed that haven’t experienced a breach say the potential damage a cyber breach could cause is an “important” consideration.

However 83% consumers surveyed are now concerned about which businesses have access to their data and whether it’s safe, and over half (58%) say that a cyber breach would discourage them from using a business in the future.

KPMG’s cyber security practice partner George Quigley comments: “Small businesses know that their reputation is critical to their success but it seems that many haven’t considered quite how many factors can affect it. Every piece of data in a business can be of interest to a cyber criminal – even if the business itself may not realise it – and with small and medium sized businesses a key target for this very reason - it’s vital to take steps to protect your data, and with it the trust of your customers and ultimately your reputation.”

Cost of funding for SMEs divides expert opinion

A campaign demanding the introduction of an annual percentage rate (APR) on SME finance products, called APR4SMEs, has been launched by SME overdraft provider Growth Street.

At present, commercial finance offered to limited companies falls outside the scope of the Financial Conduct Authority (FCA) and is unregulated. As a result, SMEs are often misled and end up paying far more than they should, with a detrimental impact on profitability, growth and local employment.

Commenting on the launch of the new campaign, Whittingham Riddell tax partner Duncan Montgomery said: “SMEs are already moving in to a more claims based environment with their banks. Complex financial instruments were in the past made available to businesses, often around interest rate hedging or currency swaps, and while in principle some understanding was had, there have been a great number of settlements made by banks on the basis that the product purchased and sold was misunderstood.”

Montgomery said he would urge all SMEs to examine the banking cost lines on their accounts and management information to make sure it ties to the expectation they have.

However, ReesRussell partner Jonathan Russell argued that for many small businesses the trade-off is worth it. He said: “Many might consider the cost of borrowing for small businesses too high and in truth it very often is considering the other onerous conditions applied. However, there are many who would say availability of funding for small businesses, particularly unsecured funding, is a bigger issue than the cost and indeed many would pay more in costs just to have the funding available. Whilst the commercial lenders trumpet their increased lending to SMEs much of it has been consolidating existing overdraft facilities.”

The flexible working revolution

Around 75% of businesses of all sizes have adopted flexible working policies, according to a survey by Vodafone.

The study found that businesses were overwhelmingly in favour of flexible working. Some key findings include:

• 61% of respondents said their company’s profits increased;

• 83% reported an improvement in productivity; and

• 58% believed that flexible working policies had a positive impact on their organisation’s reputation.

The rapid adoption of high-speed mobile data services, fixed-line broadband and cloud services is playing an integral role in this workplace revolution: 61% of respondents now use their home broadband service to access work applications and 24% use a mobile data connection via their smartphone, tablet or laptop with a broadband dongle.

In-store discounts sway Valentine’s shoppers

SMEs should do their best to make the most of the in-store shopping rush predicted this weekend as impulse buyers dash out for last-minute Valentine’s Day gifts. Barclaycard has predicted that 36% of shoppers leave their gift-buying until last minute, and are therefore more likely to shop in-store than online.

Data from 2015 shows that as Valentine’s Day occurred on a Saturday, year-on-year spending on February 14th was up significantly as shoppers rushed out to make last minute buys on the high street. This trend is expected to be replicated this year, with Valentine’s Day falling on a Sunday – meaning ecommerce-only retailers stand to lose out on vital sales if they do not use the week ahead to entice shoppers to buy online.

Barclaycard’s research shows that introducing exclusive online reductions and promotions could help boost consumer spending over the next week, as over a third (38%) of shoppers admit they would be swayed by discounting when looking for a gift for their loved one.