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Neil Lewis: The North can capitalise on being careful with cash

Cover of  by Neil Lewis

HOW much?

That is the question that drives customers into Poundland ? one of the UK's fastest growing retailers.

And value is what Bradford-based Morrisons offer their customers too.

So, does that mean that there is opportunity in the new climate of austerity? And if so, how can you use your Yorkshire base to benefit?

The answer is yes, the new age of austerity does offer great opportunity especially if you are based in Yorkshire.

The types of businesses that are succeeding in this current climate fall into of these three camps:

Offering better value ? low cost model for consumers.

Exporting ? and selling against sterling's weakness.

Outsourcing ? low cost model for governments.

Poundland and Morrisons are good examples of the first category ? they are using their low cost base to keep prices low across their business. At the same time, they are both expanding rapidly to gain market volume that allows them to buy in bulk ? again, at lower prices and so that they keep offering great value to their customers.

As an example of the second category ? exporting ? Wensleydale Dairy Products ? manufacturers of the eponymous cheese have recently announced an expansion in export sales to North America and Asia.

Many similar British businesses are winning new contracts by exporting established brands and products into new territories ? and especially the rapidly growing Asian markets.

Lastly, with the Government on path to cut 25 per cent of public spending over the next few years, an increase in work going to outsourcing firms is expected to deliver better value for money and greater savings.

However, there is another advantage that Yorkshire offers which is less often noted and that is exporting to London and the South East.

I say exporting, because the price and cost differences between the two regions are significant and therefore, Yorkshire businesses would be wise to see it as an export activity.

In the recent months, I have been working with start up entrepreneurs in London who are looking to launch new media and digital products and services. They are surprised when I tell them that I can source talented digital and social media freelancers in the North of England ? to help develop and market their products and services ? for a range of prices beginning at £10 or £15 per hour.

I say they are "surprised" because firstly they pay almost twice that amount locally and secondly, because they are often active in outsourcing work to India or Philippines to gain a price advantage ? where they typically pay $15 per hour (slightly more than £10 per hour).

Hence the cost of a young, but experienced web developer in Yorkshire costs only slightly more ? per hour ? than sourcing the same skills from the other side of the world.

Of course, being in the same country means that, while there are differences between Yorkshire and London, those differences are slight in comparison with speaking to a developer more than 6,000 miles away by Skype. As a result, London to Yorkshire communication will be better and the project will be completed faster and at a lower overall cost. Additionally, the degree of innovation in the project is likely to be higher because of the higher quality communication.

In addition, the train network means that the commercial centres of Yorkshire are only a couple of hours away from the centre of London instead of a jet-lagged full day of flying.

In fact, I have become so convinced of the advantage of sourcing digital, creative and marketing skills in the North of England that I am putting on fairs and events ? Enterprise Freelance Fair ( to showcase this huge opportunity.

The opportunity then, for Yorkshire based entrepreneurs is to take advantage of the low cost base and export that benefit into government, around the world and down to London.

The almost next door proximity of Leeds, Sheffield and other Yorkshire commercial centres mean that distance is no reason for a London or South East firm not to gain this price advantage.

In fact, if London based firms want to remain competitive, and innovative at the same time, they really don't have much choice.

All we, the Yorkshire and northern England based entrepreneurs, need to do is to start selling the commercial, cultural and innovation benefits of outsourcing to our region.

If we take on this challenge ? either as individual freelancers, national firms or as large global companies, we will bring lots of new and exciting jobs back to our region for the benefit of Yorkshire and the rest of the country too.

The traditional Yorkshire values of careful cost management are in vogue. It is time to capitalise on them.

Neil Lewis is author of 100 Rules For Entrepreneurs: Real-life business lessons, published by Harriman House.

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