Business survival rates and proximity to public transport have always been thought to go hand in hand.
The theory, which is entirely rational, goes that people will be more likely to visit a store if they can access it by bus, tube or train. As not everyone has a car, being in a hard-to-reach part of the town will not stand you in good stead when you are trying to develop a reputation among your target audience.
But new research by PlaceILive.com challenges this notion, as its analysis of figures supplied by the Office for National Statistics actually found that London businesses are perfoming better in locations where there is less accessible public transport.
The three areas with the worst two-year business survival rates were the City, Westminster and Waltham Forest, with all three areas below 65 per cent during the first 24 months. On the other hand, Hillingdon, Hounslow, Sutton, Bromley and Richmond – which are all located on the outskirts of Greater London – recorded survival rates between 76 per cent and 80 per cent during the same time period.
According to the research, accessibility to public transport is the strongest factor influencing the longevity of new businesses – indeed, it was much stronger than levels of unemployment and salary expectations.
The study suggests that Londoners prefer shopping nearby, as they view travelling to a different retailer as too much hassle. This means local businesses have a clear advantage over competitors elsewhere in the city.
If the findings are taken at face value, people looking to set up small businesses in London should consult the local transport network before making a final decision on the site’s location. By choosing an area that is mainly residential and boasts limited transport options – even if the rent is a bit dearer – entrepreneurs are giving themselves a better chance of long-term success.