How I started a business in London
London is a melting pot of ideas, innovation and opportunity. But when you’re looking to start a business in the capital, how do you sieve through all the different options available and get the information and support you need without wasting any time? We spoke to two entrepreneurs with businesses that have been funded by Virgin StartUp, to uncover exactly how they went about launching a business in London.
Boo, founded by Davide Russo and Charlotte Cramer:
Boo is a brand with a mission to make bedtime more enjoyable for parents and young children. The first product that will launch the brand is, ʻGlow Awayʼ. Glow Away is a bedtime story book and glow-in-the-dark duvet cover that aims to help children overcome their fear of the dark by using the power of what got them scared in the first place: their incredible imagination.
Industry Avenue, founded by Caroline McQueen:
Industry Avenue is membership-based community for creative artists and entertainment professionals. The companies mission is to empower artists to make new friends create work opportunities and perform at their highest level through arranging exclusive events and services.
Who did you speak to in the London for advice, how did they help you?
Charlotte Cramer, Boo: We have learnt not to underestimate the power of loose contacts. We found that when you’re passionate about an idea it’s infectious and people are surprisingly open to helping your project grow. Having studied at University of the Arts in London we also have an incredible network of ex-classmates and lecturers who have been an amazing source of knowledge, inspiration, and production. Our business advisor at Virgin Startup was also extremely helpful. She really forced us to test every single assumption we had made about everything from our price point, to the packaging, and our distribution model.
Caroline McQueen, Industry Avenue: When I started working on my idea for Industry Avenue almost two years ago, there were two people that I spoke to for advice who were instrumental in helping to solidify my ideas into a plan that made sense. The first was my mentor for acting. She's been a working actor and director for several years and helped me focus on creating a business that aims to solve the problems at the core of the entertainment industry. The other was a business coach I hired. He gave me a lot of practical advice on scaling my consultancy business from a one-to-one to one-to-many business model, with a lot more moving parts.
Did you go to any networking events in London?
Charlotte Cramer, Boo: There are hundreds of networking events every week in London. We’ve found often, you’ll create stronger contacts by simply attending talks and workshops on stuff you find interesting. For example, a psychologist we met at a Science Museum event helped us refine our idea for maximum impact.
Our favourite events are probably the ones you might think would be the least relevant. A lecture on drugs and alcohol gave us insight into the power of the human mind; a lecture on health care products taught us the importance of premium design and usability; and a talk on war strategy gave us the confidence to ‘go for it’ but be prepared to be nimble and open to change. Look at university event pages (LSE is brilliant) and sign up to Meetup!
Caroline McQueen, Industry Avenue: That's actually one of the problems my business aims to solve. There are two exhibitions held annually in London, Surviving Actors in January and Actors Expo in October, that are there to help actors in all areas of life as a professional. Aside from these two exhibitions and a few smaller meet-ups that aren't very well publicised, there isn’t really anywhere for actors and other creative people in London to meet up and network on a regular basis.
Why is London a good place to do business?
Charlotte Cramer, Boo: Launching a business isn’t easy and it’s not something everyone can relate to. In fact, to a lot of my friends who leave work at 6 everyday think I’m mad when I leave the pub at 9 and say I’m going home to work. London is great because you’re never the only one leaving the pub at 9 to work on your startup. You’re surrounded by that mentality and it makes you feel a little bit less mental, which is always nice.
Something small but really important to me is how the cafe culture in London has really blossomed. It’s pretty cliché but sitting in a cafe with a great espresso and your laptop isn’t a bad way to spend your weekend. From a more practical point of view: incorporating a business is easy as pie (it takes 30 minutes online and only costs £15); tax allowances are fairly generous; and there are hundreds of events going on to give you advice on everything from national insurance to finding a co-working space.
Caroline McQueen, Industry Avenue: London is one of the entertainment capitals of the world, so it's a great place to do business because it's steeped in so much history and culture. What's more, the UK tax incentive scheme for film production means that a lot of Hollywood films are now being produced in or around the capital.
To qualify for the tax relief, 70% of a film’s labour costs must be paid to European workers and at least 25% of the production costs spent in the UK. Two of the big six studios - Warner Bros. and Disney, currently have several films in production just outside of London.
Since 2007, Disney has invested a total of £1.4 billion on filmmaking in the UK. This includes £240 million for Pirates of the Caribbean: On Strangers Tides, which is believed to be the most expensive in history. In 2013, Disney's UK film production costs reached £328 million, approximately 18% of the £1.9 billion the studio spent worldwide. A 7% increase from 2012.
Where in London do you base yourself and why?
Charlotte Cramer, Boo We’re based in Shoreditch, East London. Although the old magic of the area is fading in ways, there is still a rich creative culture that’s palpable and stimulating. It’s also a great base for industry events (aka free beer and pizza!) and meeting with collaborators as the majority of small creative businesses are nearby.
We also love having London’s best coffee shops on our doorstep for a caffeine fix, so many excellent restaurants; and food trucks from all around the world.
Caroline McQueen, Industry Avenue: I’m based in Covent Garden, near to Leicester Square. We host our cocktail parties and private screenings in Soho, so it makes sense to be located close by.
What advice would you give to other people looking to start a business in the London?
Charlotte Cramer, Boo: My tips are as follows:
1. Talk to your customers. If you’re shy, go on forums or find out where they hang out and just watch and listen. The amount of parent’s we’ve forced into an interview when we’ve met them at social events is in the hundreds. And they’ve given us a zillion times better advice than any business advisor or ‘startup guru’ has (sorry).
2.Use your loose contacts. And let people use you. We’ve also really come to live-by the mantra ‘there’s no harm in asking’. We’ll often go on LinkedIn, find a total stranger we want to speak to and ask to buy them coffee. It’s a bit awkward, yes, but people like to help and it’s been amazingly valuable.
3.If you don’t have a great co-founder, find one. There is so much frustration that goes into starting a business. You need to be able to keep each other motivated. If you’re not a solid team with a 100-tonnes of respect for one another then life’s going to be pretty damn harsh.
Caroline McQueen, Industry Avenue: In London you're bound to have competitors with a similar offering, so my advice would be to ensure you know how to communicate the value of your product or service to your audience. Know what makes you different from your competitors and what you do best. If you know definitively what your highest distinct value is as a business and brand, you won't be forced to compete on price or customers.
Is it expensive to start a business in London?
Charlotte Cramer, Boo: No not at all, but...you have to be willing to shop around; use your bedroom as a stock room, office, and meeting room; and outsource any jobs abroad that you can to keep costs down (that means some unsociable night-time calls to China). People Per Hour and Alibaba have been saviours, especially in the short term. Also there are lots of University’s in London with students who are keen to get their name out there. If you have a great idea, a student will spot it a mile off and will be only to happy to help (and put their name on it).
Caroline McQueen, Industry Avenue: “It may be expensive to run a business in London, but it certainly isn't expensive to start one. It doesn't cost a lot of money to test an idea to see if it has potential and if you do a lot of things yourself in the beginning you'll save money.
I don't have a storefront as I have a service-based business, but it could have cost me close to £12,000 to hire a developer to build the membership site for my business. By learning to code and doing the majority of the work myself, I managed to save all that money.
What types of businesses do well in the London?
Charlotte Cramer, Boo: “Businesses that do well in London should do well anywhere (unless of course they’re very specific to a cultural micro-trend or behaviour.)
Firstly, and I’ve stolen this from Altman’s Stanford lecture (which you should definitely watch), don’t look for a product or category that’s already huge. Look for something that’s on the lower end of the growth curve. The good thing about London, and most cities, is that this potential for growth is usually pretty palpable. Living in London it wouldn’t take a genius to have seen a few years ago that pre-packaged health foods were going to skyrocket.
Secondly, more and more people are looking for brands with a purpose. Brands who not only give the consumer what they want but also contribute some greater good. This doesn’t mean you have to donate your profits to charity, it just means that you have a core belief about how your product is making the world a teeny bit better and you really live by that.”
Caroline McQueen, Industry Avenue: It's difficult to say what types of businesses do well in London. I think it comes down to the entrepreneur and whether they're able to adapt and move with the trends of the city and whether they're able to effectively communicate the value of their product or service to a specific audience. And if you fall into the mind-set of believing, because there are millions of people here, you're bound to sell to lots of people; you'll end up not selling anything to anyone.