Real Estate Investor Magazine South Africa Real Estate Investor Magazine - April 2017 | Page 46

UNITED KINGDOM
8 Top Tips from a CEO
How to Expand Your Business to the UK
BY KIM BARTY
S 3
2 4
5
6
outh African businesses are expanding and
opening offices and branches in the United
Kingdom (UK) for three reasons, says Scott
Brown of Sable International Accounting.
1
South African business owners can gain access to
expansion opportunities in the UK and Europe by
setting up a UK business ‒ without having to emigrate.
The regular presence of senior management in the UK
is recommended, however, as it is advantageous for
strengthening a UK-based office.
Corporate tax is less in the UK than in South
Africa. The UK government has also removed
obstacles and is offering ‘sweeteners’ such as grants and
incentives to companies wishing to expand offshore.
3
Subsidiary applications are cheaper and simpler
than alternative visa categories. The Entrepreneur
Investment Programme, for example, requires business
owners to purchase a business for no less than 200 000
British Pounds and employ a stipulated amount of UK
staff in the business.
Chris Wilkins, the CEO of Dynamic Technology
Holdings (DTH), waited until the company was one
of the top three significant players in its sector before
spreading his wings and opening an office in the UK.
The practical factors that played a role in Wilkins’
choice to expand his business to the UK included
similarities in time-zones, language and business
culture. Strong business and familial ties with the UK,
as well as the prospect of a Rand that is expected to
deteriorate faster against the British Pound than the
Euro or the Rupee, were also key considerations.
Wilkin’s eight top tips for UK business
expansion
1
Ensure your business is at the right stage of its
lifecycle, so that you are not just reinventing the
wheel but offering a compelling alternative to a mature
and established model in the UK.
2
Keep as much of the cost in South Africa as
possible, as this is the model that really kicks hard.
Apply the 70/30 rule to SA/UK costs.
42
APRIL 2017 SA Real Estate Investor
A product or service that is promoted in the UK, but
serviced from South Africa is a winner. Avoid the
mistake of parachuting in a South African citizen with
a pat on the back and a few words of encouragement
‒ it really does not work. This person won’t know the
market, wouldn’t have worked within the highly-
regulated UK environment and will be unfamiliar with
the UK commercial context. A South African citizen
won’t have the established support structure or network
on the ground in the UK either.
Pick a specific region and service or product for the
UK, don’t try and be everything to everyone, or
everywhere.
Ensure the service or product is focused and specific,
clearly communicated and as commoditised as
possible.
Make sure that the marketing collateral has been
critiqued and reviewed intensively for the UK
market The UK is less hung up on price, but a shoddy
brochure could scupper the deal.
7
Make sure that you have sustainable funding, as you
don’t know how long it will take, and the margin to
keep going could mean the difference between success
or failure in breaking into the UK market.
8
Craft an approach using partners, channels and
individuals. This means establishing a UK network
of companies and individuals, in a variety of contractual
relationships, who will help you take your product or
service into the UK market.
Finally, expect the UK market to take twice as long.
“It costs three times as much to break into and utilize
a credible organisation with knowledge of the South
African and British tax and legislation requirements
and systems,” says Wilkins.
RESOURCES
Sable International
www.reimag.co.za