Doing Business In The Uk An Overview 2010
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A brief guide for non UK based businesses who are considering setting up or expanding in the UK.
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Doing Business In The Uk An Overview 2010
- 5. Some of our clients
- 6. Business Expansion in a Foreign Market
- 7. UK Overview Northern Ireland Scotland England Wales
- 8. Major Commercial Centres Belfast Glasgow / Edinburgh North East - Newcastle / Sunderland / Middlesbrough Liverpool / Manchester Yorkshire - Leeds / Sheffield Midlands - Birmingham / Coventry Greater London South - Southampton / Portsmouth Cardiff
- 9. Embracing Different Cultures
- 10. A Glorious Past
- 11. A Different Future
- 12. A Strong Economy
- 13. A Competitive Location in Europe
- 14. Doing Business in the UK
- 15. How can TCii help you?
- 16. Any Questions?
Editor's Notes
- TCii is a strategic and management consultancy based in Cavendish Square in Central London. This is a general overview of doing business in the UK. I’m not going to touch on the legal, banking or accounting aspects. But before we start let me tell you a little about TCii.
- We are a young company established in 1999 in Russia. The company grew quite rapidly and by 2000 half of the business we had was international so we decided to open up offices in the UK and Germany and at that time I relocated to the UK and set up the London office which then became our head office. Up to 2004, we were dealing only with very large corporate clients but we then set up a division to deal with small and medium sized companies and this accounts for about 25% of our business today. In 2006 we set up links and joint ventures with a number of similar organisations in the USA, mainland Europe and Asia and in 2007 and 2008/9 we have continued to expand our service by setting up a database of Angel investors for small and medium companies looking for finance and by entering into agreements with organisations who we work with when buying and selling businesses Internationally. In 2010 and beyond we intend to continue this process of developing links with other organisations to expand our services and our international network.
- So what do we do? We work with CEO’s, MD’s boards of directors and owner managers to help them develop robust strategies and route maps to help get their businesses from where they are today to where they want to be .......along with some clear milestones to check progress on there journey We then help them implement or execute the strategy, often working hand in glove with their management teams.. All of our people are senior business people with extensive, board level, international experience. We deliver creative but practical solutions... are hands on operators...... and keep a clear focus on delivering competitive advantage to our clients. And most importantly, we individually tailor solutions to a clients challenges.
- We have a very broad range of clients both large and small and here are a few that we have been working with during the last 12 months. My presentation today is about doing business in the UK.......
- The reason most of you are reading this is that you are interested in entering or expanding in the UK. If we go back to basics we can see that entering into any foreign market can be achieved through a wide variety of methods. The best mode of entry for you should be selected only after carefully analysing each alternative and comparing it to the others to check which is the best for your business and your particular circumstances. For example, in general, exporting requires the least amount of resources but allows for the lowest level of control - and - wholly owned subsidiaries, on the other hand, require the most resources but allow for the most control. Which is right for you …. It depends on your circumstances and your requirements. In general I suggest you remember 4 things: Don’t bring assets and people into the UK unless they are essential. When considering the tax benefits of the location of assets and operations, do not forget grants and other state aid that may be available. All significant commercial decisions should be tested by reference to the net of tax effect in the country of residence of the parent company or ultimate owner. Ensure that exit in the case of either success, or failure, can be achieved cost-effectively. So before taking any action, make sure you have thought your options or take advice from someone who can help you work through these. ……… .if you do this it will be a lot less expensive for you in the long run.
- The UK is often regarded as one country but it is actually four! England, Wales, Scotland and Northern Ireland. They are not all the same ....We have devolved assemblies in Scotland, Wales and N. Ireland as well as central government in London There are also some significant differences in education policy and healthcare in each of the countries. There are some fierce national allegiances for instance England v Scotland for the Calcutta cup in rugby yet when it comes to the Olympics we are all Great Britain and were happy to celebrate a Scotsman, winning 3 gold medals... Does this sound confusing.... Well it is to us as well.... Here are some of the facts about the UK: Only about one-third of UK family spending is on goods and it falls a little bit more every year. Goods are becoming cheaper: prices in the shops are lower now than they were five years ago. That is largely because of what might be called the China syndrome. Either our goods come from lower-wage economies in East Asia and eastern Europe, or the pressure from the possibility that they might , is pushing down the prices of the things that are still made here. The UK covers approx 243,000km2 Population 61m Currency = Pound Sterling Capital: London ( Scotland- Edinburgh, Wales – Cardiff, N. Ireland – Belfast) Constitutional Monarchy: Head of state: Queen Elizabeth – since 1952 A nation of cultural and ethnic diversity Historical and language links with the USA Parliament - the supreme legislative body We have a House of Commons (elected) & House of Lords (hereditary & appointed) Political head = Prime Minister Gordon Brown (As at April 2010!) Member of the EU since 1973 – Although we still don’t use the Euro and many people here still use the term “Europe” as an expression that does not include us! So you could say we have a bit of an Island mentality! And finally, since 1948 we have offered Free health care to all UK residents under the NHS.
- The next slide shows the for business the UK is not just London. London is Europe’s financial capital with appox. 2000 UK headquartered companies listed on the London markets. Year after year London continues to attract more than its fair share of gifted and highly qualified individuals and it has been voted the top city in Europe to access qualified staff for 16 consecutive years. However, although London is the largest city in the UK and the financial centre of the country, there are many other commercial centres around the country as shown on this slide. The size of the shaded area represents the size of the centre, so after London we have Manchester /Liverpool and then we have Birmingham/Coventry in the midlands , Newcastle/Sunderland / Middlesbrough in the North east and so on.......... So dependant on your business London is only one of the locations for you to consider when expanding into the UK.
- Modern UK is a very multicultural society with a long history of immigration and a melting pot of cultures However there are also a number of common factors that are quickly adopted by newcomers ... For example: There is a saying that “An Englishman’s home is his castle” -- this expresses the desire of people here to own a property rather than rent it – a few years after I left University I went to work in Germany and people there that I met were amazed that I, like most of my UK colleagues at the time, had a mortgage on a house in London and that I was prepared to spend most of my monthly income, at that time, paying for it – where as their attitude was that that this was crazy – why not rent, have more cash to do what you want and not have the hassle of maintaining a house. So very different attitudes!
- The UK has an impressive history of innovation and commercial development:.... The industrial revolution started in the UK in the late 18 th and early 19 th century with a previously manual labour based economy transitioning to a machine based economy, followed by a massive increase in trade. The effects of this spread to Western Europe and North America during the 19 th century, eventually effecting the world. Notable Examples of UK innovation include 1825 GEORGE STEPHENSON INVENTS THE RAILROAD LOCOMOTIVE 1840 MICHAEL FARADAY INVENTS THE ELECTRIC MOTOR AND POWER GENERATOR 1856 CHARLES BABBAGE INVENTS A CALCULATOR AND AN EARLY COMPUTER 1901 HUBERT BOOTH PATENTS FIRST VACUUM CLEANER – and later sold it to William Hoover – who commercialized it 1924 -1928 JOHN LOGIE BAIRD INVENTED TELEVISION 1930 FRANK WHITTLE INVENTS JET PLANE COCKERELL INVENTS HOVERCRAFT 1991 TIM BERNERS-LEE INVENTS THE WORLD WIDE WEB And finally between 2000 - 2007 JONATHAN IVE DESIGNS iPod nano and IPhon FOR APPLE .... All invented by Brits and all of which went on to become major commercial successes.
- Bur what about the present and the future? As in many other industrialised countries, the last couple of decades have seen a major restructuring of British industry away from the more traditional heavy engineering and primary sectors towards the service and high-tech fields. This process has also coincided with radical shifts in approach to management and company structure. Many of the hierarchy and class issues which were so much a feature of the British industrial landscape have been replaced by more modern business models - often heavily influenced by US thinking Ideas of 'jobs for life' have largely been overtaken by an expectation of rapid change in work patterns and prospects. Most current British managers no longer expect to spend the majority of their careers with one or two companies, but rather look for progression through moving from employer to employer……possibly promoting more of a short-termism attitude. Generalisation, rather than specialisation, tends to typify the British approach - with less merit being placed on pure technical ability than in some other countries. The proposition that the manager needs to be the most technically competent person would receive little support in the UK. Therefore, pure academic education is afforded much less respect than in other countries (notably Germany and possibly France) and the emphasis is on relevant experience and a 'hands-on', pragmatic approach. Much more emphasis is placed on the man-management skills needed to produce the best results from the team. A manager is expected to have the interpersonal skills to meld a team together. Many modern UK managers want to cultivate a close, often humorous and overtly soft relationship with subordinates. This seeming closeness should not, however, be mistaken for weakness on the part of the boss - when difficult decisions need to be taken, they will be taken. The British find it difficult to be direct and British managers often give instructions to subordinates in a very indirect way, preferring to request assistance than to be explicit. This use of language can be very confusing for the non-British
- Well a strong economy until recently that is as the UK – along with most of the rest of the world has been hit by the economic slow down. In the UK, some people believe that that these difficulties will be with us for another 18 months or so and that the UK economy, along with the US and most of the Euro area will shrink next year before we see the beginning of a recovery.
- Despite the current economic difficulties effecting us, the UK is still a very attractive place for business...... The UK is the fifth largest economy in the world (Source: World Bank, 2007). The UK is forecast to have the strongest business environment of all major European economies for the period from 2008 to 2012 (Source: EIU, 2007). The UK was the second largest recipient of foreign direct investment (FDI) globally in 2007 (Source: UNCTAD, 2008), The UK was the second largest exporter/third largest importer of commercial services and the seventh largest exporter/fourth largest importer of merchandise The UK is one of the most competitive locations in Europe for business and personal taxation, The UK has low unemployment (with an unemployment rate well below the European Union average) Other advantages are: One of the easiest places to set up and run a business in Europe. // 2. An Internationally Competitive tax environment for foreign investors. // 3. One of the most flexible labour markets in Europe. // 4. Least barriers to entrepreneurship in the world. // 5. World leader in innovation. // 6. One of the most stable political environments to do business. // 7. Stable regulatory environment. // 8. One of the easiest countries to register a property. // 9. Commitment to improving the planning regime. // 10. Operating in English gives firms in the UK an advantage when communicating globally.//11. Progressive communications network. // 12. Home to Europe’s number one city for business : London.//13. Top talent . // 14. Springboard to Europe. // 15. Number one location for European headquarters. // 16. Olympic opportunities: 2012. // 17. Good transport links. // 18. High quality of living. // 19. Magnet for foreign investment. // 20. Productivity rapidly increasing. So, in short there are many good reasons for coming to the UK.....
- So, what other differences will you come across when doing business in the UK..... Well here are a few.... Compared to many other cultures the British and in particular the English use politeness and courtesy which means that direct questions can receive evasive responses with conversations being ambiguous and full of subtleties and understatement – paying attention to tone of voice and facial expression is important as an indication of what is meant. The term stiff upper lip is often used to describe the traditional British image of reserve and restraint when faced with difficult situations. Open displays of emotion, positive or negative are rare. This means that in business meetings some of your British colleagues may appear formal and detached. A vital element in all aspects of British life and culture is the renowned British sense of humour. The importance of humour in all situations, including business contexts, cannot be overestimated. Punctuality should be considered essential for any business or social event. In most cases first names are used immediately. Business cards are usually exchanged at first meeting. It is normal practice to shake hands on first meetings and if you have not seen a contact for some time. But, it is not normal practice to shake hands every day. Business Dress is often conservative. Titles such as doctor or professor are rarely used outside academic circles and can even be seen as a sign of affectation / showing off.
- So there is much to consider when entering or expanding in the UK. There are several ways that TCii may be able to help for example: Practical advice guidance and mentoring from an experienced, International, multi cultural business team. Feasibility checks and appraisal of your planned investments. Working with you to create, develop and implement a robust UK growth strategy. Identification and negotiation to secure appropriate distributors on your behalf. Sourcing of key people, both executive and non-executive for your UK operation. Introductions in to a range of UK and international business networks. Acting as the UK representative office for your organisation.
- OK that’s it....... On the TCii web site you will find a few more materials from TCii that you may find of use: 1. A white paper on “Going Global” which has some good hints and tips about doing business outside your home country. 20 top tips on British business culture – expanding on the things I mentioned earlier.. Some testimonials from a cross section of our clients And finally some case studies of work we have done.