Thinking about where to move is a huge decision to make. It requires thorough research to find the perfect fit; the optimal location with all the right resources that will nurture your company and allow it to grow and develop into the best it can be.
Whether you are starting a new business or relocating internationally, there are many things to consider when deciding how to choose your company’s global headquarters, such as economic trends, access to talent, marketing trends, and governmental support. Above all, you want to be in a location that enables you to grow quickly while maintaining an edge over your international competitors.
Diane Janknegt, Founder & CEO of Wizenoze, a company that combines AI technology with education, told us that she chose to have the strategic office in the UK for three reasons: “The importance of UK education to global learning and development, the maturity of the UK EdTech market means a highly skilled and talented workforce, and the maturity and presence of Global VC’s in the UK market means access to capital.”
Every business will have different requirements — there is no one-size-fits-all guide — but here are six questions to consider when making your decision about where in the world to set up your HQ.
Is there access to the right talent pool?
Positioning your business somewhere with access to a local talent pool with the skill sets you need will give you an automatic edge when building your team. While COVID-19 has proven most jobs can be done remotely, location is still key to attracting talent.
Tony Kypreos, one of the experienced entrepreneur and venture capitalist Dealmakers at the the UK Department of International Trade’s Global Entrepreneur Programme, emphasizes that “innovative scale-up companies will choose to base themselves in cities with the right business environment, talent, access to capital, and to their key customers, but they will also distribute their talent regionally and internationally.”
Checking the local labor market, employment rate, recruitment strategies and salary projections will be helpful, as this will have an impact on your workforce. Being able to establish a relationship with local academic institutions can also help the business attract fresh talent for research and development.
Additionally, setting up in a country that enables and attracts an international workforce removes barriers like migration, free movement, or employment regulations, which might restrict access to the best talent from across the globe.
Are there strong free trade partners?
Residing in a country that supports international trade and investment is beneficial for a number of reasons.
First of all, you will have the advantage of having access to a wider range of products, services, and technologies, enabling you to select the best options and expedite the growth of the business. If you see the company expanding internationally in the future, you will want to be in a place that can facilitate this.
Secondly, it decreases your dependency on the domestic country, and therefore decreases economic risk. The economy will always fluctuate, but relying on global markets offers a safety net should any economic instabilities arise in your domestic country.
Finally, there are greater options in terms of your pricing strategy. Being able to trade and convert from a wider range of currencies gives you an advantage over competitors, as you are able to offer the most attractive option to partners and clients.
How much will it cost, and is there access to funding?
There are a number of costs that both new businesses and relocating businesses should think about, beginning with the start-up costs. This includes real estate, insurance, and service providers. It’s a good idea to check the corporation tax rates, laws, and regulations of the countries you are moving to, in order to check that these complement your company’s needs.
Planning out a financial forecast will help anticipate the profit of your business. Checking out the GDP of the country before moving will give you a good indication of the economic stability, which in turn will help you predict your business growth.
It’s worth checking the financing options and services available from the local government to see if you’re eligible for a loan scheme or fund, as well as looking at the tax relief options for both domestic and international businesses.
In addition to public funding, finding an area that attracts private investment is advantageous. Comparing the fast-growing tech clusters alongside the rate of investment for example, show a clear correlation. The UK, for example, saw a £10.1bn investment into tech companies in 2019, making it the #1 top scaling tech nation in Europe. Basing your business in this kind of thriving scene will likely result in an equally successful and high-valued company.
Is the community compatible?
Every country and region has its own cultural profile, and it’s good to be aware of whether or not your business possesses an intercultural competency that is compatible. When your company’s values are aligned with that of the local community, you’ll be more likely to be well-received, which can provide support.
A property planning specialist can help you get set up in an enterprise zone or business cluster, where you are amongst similar industries. Networking with other similar businesses prior to the move can be extremely useful to find out more information and get the inside scope on how receptive the community has been for new businesses. Seeing the success rate of other businesses there is a good gauge to predict a likely outcome for yours, too.
While checking other local like-minded businesses, it’s also important to measure the competition and assess whether your company offers something different. Ask yourself: does my business have a competitive edge that will make it stand out and be valued? Or will it disappear through the cracks?
Another thing to contemplate is the sustainability efforts of the region you are interested in. With more companies becoming increasingly aware of the importance of having transparency about their environmental impact, being in a location that can support this is a crucial factor to consider.
Many countries such as the UK have sustainability plans in place, as health and sustainability expert Kypreos explains, “the UK has the imperative to a sustainable future, with three of the four Industrial Strategy Grand Challenges relating to sustainability and enabling technology including Clean Growth, Future of Mobility and Artificial Intelligence and Data. This is supported by one of the most progressive R&D grant structures in the world with the UK Research and Innovation (UKRI) that has launched its first environmental sustainability strategy, setting out its ambition to achieve ‘net-zero’ by 2040.”
With the whole world becoming more eco-conscious, being in a country with such plans puts you a step ahead of everyone else. A structure like this can also greatly help businesses establish themselves as being committed to Corporate Social Responsibility (CSR), making the business more attractive to clients and investors alike.
Will the location help with marketing the business?
When marketing a product or service to certain customers, the business will most certainly reach business goals faster by having a presence in the country where your target audience is. Even though the majority of marketing is done online and a digital presence can be built remotely, you are more connected with your audience and competitors as well as industry and market insights when having a base in the same geographical location.
“Being based in London has given us a much greater insight into the requirements of a global curriculum and therefore how our AI technology needs to deliver. The many face-to-face meetings in London with our key customers, have given us an unsurpassed benefit,” Diane Janknegt, Founder & CEO of Wizenoze, told TNW.
Having a proximity to your customer base will provide a greater understanding of the customer needs and how to meet them, and you will be able to size up any gaps in the market that you are able to fill. Additionally, there is more direct access to statistics about population trends that could equally inform your marketing strategy.
Finally, there’s the added benefit of being able to use the reputation of the location in your marketing communications. Having headquarters in the right location influences your visibility, recognition, and legitimacy — not only to customers but also to potential partners, stakeholders, and investors, which can greatly impact the business growth.
Is there sufficient government support?
One of the most important things to explore is what sort of support your business can receive from the local government. An initiative such as the Global Entrepreneur Programme (GEP) in the UK can be a great way to get set up and dive straight into the network.
Derek Goodwin, Head of Entrepreneurship and the Global Entrepreneur Programme at the UK’s Department for International Trade, told TNW that “the GEP works internationally mobile entrepreneurs and their innovative businesses to help access the UK’s world-class ecosystem from a UK base. We have attracted companies to the UK from over 40 countries around the world, and these form the GEP alumni. We never seek to pull companies out of their home market as our aim is to support the ambitions of global entrepreneurs where a UK HQ will facilitate international growth.”
“This model is unique in that our focus, which seems to resonate among the entrepreneurial and investor communities globally, is to upskill and support founders by providing hands-on strategic/tactical assistance, mentoring, coaching, and introductions to the UK’s world-class ecosystem. We only work with founders that we feel have the ability to scale and grow, similar to how venture capital works. We have no money or incentives to offer, just the experience and expertise of our dealmakers.”
Finding out what kind of governmental relocation help your business is eligible for can be very useful with the decision in choosing a location to base. When planning for further into the future, being aware of the support a government can offer to help expand your business is also good to know.
To look at the topic in more depth, as well as explore the UK as your global launchpad, dealmaker Tony Kypreos will interview GEP alumni Diana Janknegt (WizeNoze), Liuigi Fidelio (Messagenius), and Nish Kotecha (Finboot) about what makes the UK the best launchpad for startups to scale up. Register now for TNW2020, and catch their discussion on Friday 2nd October at 12:15 CEST (GMT+2).
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This article is brought to you by the British Embassy at The Hague.