If you’re considering starting a business in or around the London area, its ever-expanding population means lots of potential customers. Our city and surrounding boroughs also have millions of visitors every day, so there’s lots of opportunities for brand exposure. With strong global connections and infrastructure, the potential for your business to grow is huge.
It might be an expensive part of the country to be in but for business owners, the possibilities are endless – but where do you begin? We’re here to guide you.
What type of business can I set up in London?
There is a market out there for pretty much anything. If there’s demand for a product or service, then there’s justification for you to supply it. So, if you’ve had an entrepreneurial brainwave, and done your market research to validate the idea and identify your niche, go for it!
If you know you want to start a small business, but you’re stuck for ideas, here are some top types of businesses that tend to do well.
Food and drink
Who doesn’t like food and drink?! Places to get delicious food and beverages are always going to attract customers so this could be a lucrative avenue for you to explore as a new business. There are so many London bars, restaurants and bakeries going viral on social media platforms like TikTok – yours could be next.
The city is well known for its diverse food and drink scene, from fine dining to international street food and local coffee roasteries. It’s all about finding something unique, whether that’s a fresh experience or new flavours – better yet, something that will go down a storm on social media and send customers flocking to you.
Creative services
In March 2023, GOV.UK data showed that there were 92,750 business sites in the creative industries in London. This makes up nearly 34% of all creative industry business sites in the UK. It’s no surprise then that the city is such a bustling hive of creativity buzzing with businesses of all shapes and sizes, from fashion and film to marketing and photography.
As a result, there is also a high demand for services used by creative businesses such as photography studios, podcast recording and sound engineers, equipment hire (and someone who knows how to set it all up) and co-working spaces for creative agencies.
As with all types of businesses, it’s important to find a niche so you can stand out. A good example of this is specialising in drone filming or drone photography.
In order to fly a drone legally in London, you will need to obtain a CAA drone licence and adhere to London’s specific drone laws. Other businesses won’t want to get these certifications and won’t be in the loop with the legalities so will need to outsource to an expert.
Tech businesses
London is home to more than 24,000 tech businesses already. While this means competition is high, it also shows that the capital is a great place to launch and grow a tech-based biz. You’ll even find purpose-built co-working spaces, incubator programmes and funding opportunities for tech startups.
You can also be sure that you’ll be surrounded by like-minded tech entrepreneurs to connect and network with. Having the support of a community like this around you is important when starting a business.
Fitness services
The health and fitness market continues to grow so if you’ve got qualifications in something like yoga, Pilates, weight training, boxing, etc., you could sell your skills to help others. This could be on a 1-2-1 basis or in a group class setting.
Something like personal training is also the kind of business you can set up as a side hustle or as an online-only service if you don’t want to take the plunge into full-time business ownership immediately. You can share fitness programmes and nutrition values and have check-in sessions with clients remotely, wherever they are in the world.
Dog walking and pet sitting
Having a dog if you live in a built-up city like London isn’t always easy. Affordable properties don’t tend to come with sprawling space for animals, which means finding time for walkies is crucial. In fact, according to research from estate agents Benham and Reeves, 60% of London homes on the market have a garden but this comes at a premium of £64,000 on average for outside space.
So, for time-poor dog owners, dog walking and pet sitting businesses are invaluable problem-solvers worth spending money on.
Cleaning services
You’ll know all too well that life as an entrepreneur can be hectic. Sometimes, this leaves limited time for things like maintaining a clean and tidy home. That’s why domestic cleaning services are often so successful – people are happy to leave it to the professionals when time isn’t on their side.
How do I start a business?
Ready and raring to start your business? Here are five important steps you’ll need to take to start your business.
Think of a business name
Find a unique name for your business and build its brand identity.
Choose your business structure
Decide what type of business you want to set up, whether it’s a sole trader, limited company or something else.
Do some market research
Assess your competition and your customer base to validate your business idea.
Write a business plan
Put together a comprehensive business plan that outlines your mission, the steps you’re going to take and your financial situation.
Create a marketing plan
Using social media to build your local customer base is one of the most effective ways to gain momentum. You can also consider things like email marketing, your website, paid ads, etc.
Who can help you launch your business?
Whatever business you choose to set up, the great thing is that you don’t have to do it alone. For example, your local Chamber of Commerce or organisations like the Mayor of London website will help you find advice and guidance. Our information hub has more details about where you can find support for your London business.
Do I need to hire an accountant?
You can, but it’s not a legal requirement. Some business owners prefer to launch alone, and then hire an accountant as they grow, whereas others like to have help from the very beginning.
Things an accountant can do to assist in getting your business off the ground include:
- Legally registering your business (and helping you choose what structure suits you best)
- Running financial reports to help you plan, budget and spend better to protect your profit and cash flow
- Making sure you’re claiming as much tax relief as possible to reduce your tax bill
- Ensuring you never miss a tax return or tax payment deadline
- Help with grants, funds, loans and investments
- Setting up your accounting and bookkeeping software for you
- Improving your business plan
Do I need a local accountant in London?
If you’re looking to hire an accountant or you want to make the switch to a new one, you might be wondering if you need a local accountant who is based nearby.
The short answer – no, not necessarily. Even if you set up a London-based business, you don’t have to find an accountant who is also London-based.
The benefits of working with a local accountant include:
- In-person meetings are easier to arrange
- An understanding of local economics and politics
- Experience working with other businesses in the area
Plus, The Big Smoke is a notoriously costly city so a local accountant will be able to advise you on how to start a business in London as cheaply as possible.
On the other hand, some people prefer to work with an online accountant because they prefer the benefits of a remote service, such as:
- Rates are often more affordable
- Online accountants are super tech-savvy and can help you navigate your accounting software
- Video calls can be easier to set up and attend
It’s all about weighing up the pros and cons to figure out what will work best for you.
Find more help with accounting and finance for your London-based business in our information centre.