70% of London SMEs want to expand beyond the city in 2022
Despite the challenges of the past 18 months, new research from Google shows small businesses in London are poised to grow in the next year, with 70% surveyed planning to expand nationally and/or internationally for the first time in 2022. 29% of those surveyed intend to expand both nationally and internationally in 2022.
SMEs’ expansion plans in London are being driven by the growth of digital during the pandemic: 29% say their decision to expand nationally and/or internationally was driven by their increased uptake of digital tools following lockdown, while 27% attribute this to opportunities created by online platforms. In addition, 23% say opportunities created by social media played a role in their decision.
Businesses in London have already invested in the growth of their companies – of the 74% who received government funding in the past year, 26% used this to invest in new physical premises while 24% invested in new digital software and hardware, such as laptops. Almost a third (29%) used this funding to hire new staff.
Allergy-friendly bakery Vida Bakery was forced to close two stores when the pandemic hit, put their third on hold, and pivot to online sales. Co-founder Vanessa Miquilena worked on setting up a website in less than 24 hours, learning to use Google Ads and amending the company’s Google My Business account to keep customers up to date.
Speaking about their new strategy, Vanessa says: “Google Ads helped us not only reach customers who wanted cupcakes and cookies but also the allergy-friendly market. Being able to target niche Search terms around allergies was super useful in stretching our spend and reaching our target audience. I’m now running campaigns for both online orders and to drive visitors to the shop — we get a lot of customers through Google Ads.”
As small businesses in the region grow, the research shows almost three-quarters (71%) of small to medium businesses in London surveyed will take on more staff next year, creating more local employment opportunities. And despite increased use of digital over the pandemic, physical premises are set to remain – among those with a physical presence, only 18% intend to scale this back.
The findings come as Google launches its independent Economic Impact Report for London – published by independent research specialists Public First – quantifying its impact on the local economy as businesses became increasingly reliant on digital to continue operating.
The report shows that as a result of the pandemic:
- Over 50,000 London businesses started selling online for the first time
- Over 53,000 London businesses started taking online payments for the first time
- Over 49,000 Lonon businesses started advertising online for the first time
By helping businesses shift to online sales for the first time during 2020, the report estimates that Google helped support £948 million in economic activity.
Ronan Harris, Vice President & MD (UK & Ireland) at Google comments: “With more small businesses across the capital on the brink of expansion, we must make sure that everyone has the digital tools and skills needed for the next phase of business growth. It’s inspiring to see people gain confidence through our Google Digital Garage skills training. Encouraging greater adoption of digital technology could be one of the most powerful ways of driving a sustainable and inclusive recovery.”
However, the road to growth is not always easy. SME owners and decision-makers say the most common barriers to growth in London are potential future COVID-19 restrictions (30%), falling customer demand (23%) and staff shortages/cashflow issues (both 21%). And when asked what advice they would most like to receive about growing their business using digital in 2022, SME owners and decision-makers cited social media (17%) and online advertising (13%).