For those already doing business with the UK directly or through partners, and those who are starting a UK-based business from abroad, you were probably attracted to the UK for several reasons. In this post we explore those reasons, the UK’s stance toward small- and medium-sized businesses (SMBs) and provide insights into British culture and etiquette that will help entrepreneurs start and grow their UK-based business.
WHY THE UK IS RIGHT FOR ENTREPRENEURS AND SMBS
The UK embraces SMBs both economically and philosophically, often referring to them as the engine or backbone of the economy. In an effort to attract more SMBs from countries outside of Britain, the UK government has lessened business and banking regulations. The strategy is working. Today SMBs account for 99.9% of all private sector businesses in the UK. Only 0.1% are categorized as large businesses (over 250 employees).
Thousands of SMB owners are relocating their businesses to the UK, while entrepreneurs around the world see the UK as an ideal destination to start a business or expand an existing SMB. The Internet, which represents significant business opportunities in the UK, is driving much of the interest in the country. In fact, financial analysts estimate that the Internet and related businesses could mean as much as £19 billion in new business opportunities in the UK. London’s tech growth businesses are led by some of the UK’s most entrepreneurial leaders, who are expected to rise to the post-Brexit challenge and ensure London continues to thrive as a global tech hub
With that rationale supporting your drive to either expand your current UK-based business or encouraging you to open a UK-based business from abroad, you now need to think about key factors that will get you up and running quickly and enable you to sustain your business’ growth. We’ll begin with a look at UK culture and etiquette.
UNDERSTANDING TODAY’S BRITISH BUSINESS CULTURE AND ETIQUETTE
As an entrepreneur, you’re hungry to achieve success and while your mind may be churning with great ideas, it’s important to remember that you’re part of a larger community. And that community has an established culture and etiquette principles. Listening, absorbing and immersing yourself in this culture can help catapult your business to the next level. It’s this community from which you’ll establish enduring business relationships and partnerships that will enable your business to succeed. Ignorance to the cultural and etiquette nuances may hinder the progress of your business relationships and have a detrimental effect on the growth of your business.
The following points will empower you to think and act like a business insider who understands the overarching attitudes and values of its people.
- The UK is embracing Corporate Social Responsibility (CSR)
- Work place issues: UK citizens are more aware of, and vocal about working for companies that offer a favorable work/life balance and are vocal, active human rights proponents
- Community contributions: British are increasing seeking employment with companies that demonstrate their desire to uplift the community where they do business
- Environmentally Conscious: UK citizens care more about the environment than ever before. And they want their employers to care as well.
- British business people value punctuality when attending business meetings
As in most Western cultures, it is considered impolite to arrive late for a business meeting. As this cannot be avoided under some circumstances, follow these guidelines for managing tardiness:
- When 10+ minutes late, call ahead and provide your ETA
- When 15+ minutes late, call ahead, apologize and offer that the meeting be rescheduled
- Upon arrival, a brief apology will do
- When traveling to a business meeting via public transportation, allow extra time as the posted travel times are not always accurate
- Gift giving is not a common practice in the British business culture
- Many, larger UK companies forbid gift giving and receiving to eliminate the possibility of a gift being perceived as a bribe
- If you receive a gift from a business associate, reciprocation via a gift or note is a standard practice
- It is proper British business etiquette to bring a bottle of wine and possibly a small gift such as flowers when you are invited to a business dinner at the house of a business associate
- Classical conservative attire is the norm for men and women in British business culture
- Dark colors such as black, dark blue and charcoal grey are predominant in British business
- It is common for women to wear either trousers or a skirt in an office environment
- Head scarves are accepted as part of religious freedom
- Senior business managers display their status through their choice of quality clothing
HOW MIGHT BREXIT AFFECT MY BUSINESS PROSPECTS IN THE UK?
An SMB/Brexit study conducted less than a year ago revealed that 50% of survey respondents had felt no economic impact following Brexit; 30% reported a slight negative impact and 15% of SMBs said that Brexit resulted in a positive effect on their business
It is estimated that SMBs will contribute £217bn to the UK economy by 2020, said Mark Sismey-Durrant, Hampshire Trust Bank’s chief executive. He says Brexit highlights the importance of SMBs as the engine room of the economy.
POV FROM UK BUSINESS EXECUTIVES
- Sean Mallon, CEO of Bizdq says that SMB’s are more likely to benefit from what they see as a reduction in red tape following Brexit
- Josh Graff, UK Country Manager and VP EMEA at LinkedIn believes that this could herald a new wave of SMBs entering the UK business landscape. The UK’s thriving entrepreneurial culture shows no signs of slowing down
The Takeaway: Entrepreneurs, freelancers, independent professionals and SMB owners should remain confident in their decision to start and grow their business in the UK. Yes, there is a degree of uncertainly and doubt as markets continue to adjust to a post-Brexit world. More likely than not, SMBs and enterprises will both continue to benefit in the years ahead.
If you’re interested in learning how to register your own business in the UK, and how to open a checking account in the UK, please continue to the following sections
HOW TO REGISTER AS A BUSINESS IN THE UK
Most UK businesses register as a sole trader, limited company or partnership. It’s simpler to set up as a sole trader, but you’re personally responsible for your business’s debts. You also have some accounting responsibilities.
If you form a limited company, its finances are separate from your personal finances, but there are more reporting and management responsibilities. Some people get help from a professional, for example an accountant, but you can set up a company yourself.
A partnership is the simplest way for 2 or more people to run a business together. Under this arrangement, you share responsibility for your business’s debts. You also have accounting responsibilities. Find out more about being in a partnership and how to register. To find out more about registering a business in the UK, click here.
HOW TO OPEN A CHECKING ACCOUNT IN THE UK
You will need two documents to open a checking account in the UK:
- Proof of identity (passport, driver’s license or identity card)
- Proof of your address. Valid documents vary from bank to bank but typically documents that you can use to prove your address includes:
- Tenancy agreement or mortgage statement;
- An electricity or gas bill (less than 3 months old)
- A recent (less than 3 months old) bank or credit card statement that’s not printed off the internet;
- A current tax bill
If you’re new to the UK, you likely don’t have the documents listed. The good news is that banks have become more lenient in recent years in terms of the documents they’ll accept as proof of address. This is a question you should ask each individual bank with which you’re considering establishing a checking account:
WHAT ARE MY OTHER OPTIONS?
COSTS ASSOCIATED WITH OPENING A UK BANK ACCOUNT
Often, the banks will demand you make a significant initial deposit and then commit to paying a minimum amount of money into the checking account each month. Some banks will also charge you a monthly fee in addition to the requirements mentioned above.
This can make your bank account expensive to open and run, especially if your business’ cash flow is unpredictable.
WHICH BANK IS MOST SUITABLE FOR MY BUSINESS NEEDS?
Unfortunately, there is no straightforward answer to this question. The banking industry in the UK is very competitive, and many banks have special products designed to attract specific types of customer.
Seeing as you’re new to the UK, you have a limited credit history and not much documentation, you should be searching for SMB-friendly banks (often the UK’s largest) where the process of securing an account is more streamlined and unhindered by red tape.
It’s a good idea to contact each bank’s customer support department before opening an account. That way, you can get more information and ask questions before making a final decision
IS THERE A BETTER PAYMENT/BANKING SYSTEM FOR PROFESSIONALS AND SMBS WITH INTERNATIONAL BUSINESS NEEDS?
Independent workers and SMBs are increasingly turning to global payment platforms, such as Payoneer, to bypass all the issues involved with international banking. When using a global payment provider, you won’t need to establish a bank account in the UK; everything works through your account in the platform, and your existing, local home-country bank account.
In the simplest case, the Payoneer platform lets you send a payment request—an invoice —to your UK partner or customer. They can pay the invoice either with a credit card or a local bank transfer, in GBP. The funds immediately flow to your Payoneer account, and can later be withdrawn to your local bank account in your own currency. This process enables your clients to pay you in their local currency (£) and enables you to access funds in your own currency, with limited fees on either side.
If it’s a recurring payment, you and your customer can both establish accounts on the same payment platform and quickly send funds across the platform as needed. In Payoneer’s case, account-to-account payments within the platform are free and take mere hours to process. This is precious time and money saved.
Setting up an account on a payment platform can normally be done online in a few minutes; no need to go into a bank personally to get set up.
One of the best upsides to a global payment platform is that you can generally use the same platform in the UK and wherever else you do business – without worrying about establishing bank accounts worldwide. This also enables your business to learn about and participate in other business opportunities.
For more information about the global payment platform referenced in this article, please click here.