Does location matter in business?

We’ve all heard the old estate agent saying, ‘location, location, location’. But does the same principle apply to business?

Gill Hunt, MD of online consultant marketplace Skillfair, argues that being out of town does not mean being out on a limb.

If you’re running a branch of Top Shop or a hotel, it’s obvious that your physical location is going to be a key factor in your success. For consultancy-style businesses, however, it’s not so clear-cut.

In the past, consultants have been notoriously reluctant to move out of major cities for fear of work drying up. One consultant I knew was told she was committing professional suicide when she opted to leave London. But in these days of flexible working it’s becoming easier to hold your head up high in a business environment if you live outside of the M25.

The personal reasons for moving out of the big smoke are obvious. Those who have made a success of it get the lifestyle they want and a decent salary, while travelling to visit clients keeps them in touch with corporate life and reminds them what they miss (or don’t miss) about being in the thick of it.

From a client perspective though, there is still some reluctance to hire consultants or agencies that are not city-based. Jeremy Hurst, who runs Cornwall-based design agency Slightly Different, believes there is a perception that if you are not based in London then you are not quite as good. In fact, he adds that in order to compete on an even footing with London agencies, his company has to be a lot better.

This seems unfair. The Chartered Institute of Personnel and Development’s factsheet on hiring consultants lists previous experience, understanding of the business, value-add and cultural fit as the key considerations to bear in mind when choosing a supplier. Nowhere does it mention geographical location.

Smart businesses have realised that you can cut costs without compromising on quality by seeking out-of-town suppliers. Their lower overheads provide an obvious cost benefit (‘sea-shoring’ as opposed to offshoring, quips Hurst). Furthermore, there is no reason after an initial face-to-face meeting that you need to have them on your doorstep. According to Hurst, a willingness to travel and meet people face-to-face is crucial to building up trust, while remote working tools can take care of an ongoing relationship.

With spiralling costs of living, a tightening economy, potential recruitment freezes and an increased desire for a work-life balance, moving your business out of the city might be an ideal solution. People buy people and once you have made yourself indispensable to a client then it should not matter where you are based.

Marc Barber

Marc Barber

Marc was editor of GrowthBusiness from 2006 to 2010. He specialised in writing about entrepreneurs, private equity and venture capital, mid-market M&A, small caps and high-growth businesses.

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