Cities of Innovation: Manchester
Key indicators
ICT Infrastructure
Internet exchange point
Peering service speeds (Gbps)
— IX Manchester is the UK’s strongest IXP outside London and offers conventional peering services for all IPv4 and IPv6 traffic at speeds of 100Mbps, 1Gbps and 10Gbps — All primary telecom carriers and fibre networks converge through Manchester
Local, national and international transport links
Local airports
Flight destinations
— Manchester airport hosts 29 million passengers and 121,000 tonnes of cargo a year — Direct access to the M6, M61 and M62 to London, Liverpool, Leeds and Edinburgh — 60 direct trains a day to London with a journey time of 2 hours
University links and access to talent
QS World University ranking
University of Manchester
Workforce in financial and professional services
— Ranked number 1 in the UK, the School of Computer Science produces a high calibre of talent with knowledge in coding and technology engineering — The University of Salford offers specific expertise in future media, computer networking and telecommunications
Costs and availability of workspace
Co-working spaces
Rent free period
— Workspace rent ft2/year Grade A|Grade B: · Central Manchester €40|€31 · Salford Quays €28|€20 · North Manchester €17.50|€12 · South Manchester €28|€20 · Manchester Aiport €28|€20
City support for start-ups and SMEs
Workspaces and support
Science & innovation community
— Manchester Science Partnerships is a science and innovation community based in the heart of Manchester’s knowledge quarter, known as the Corridor which is the largest clinical academic campus in Europe
Financial support and access to investors & accelerators
Accelerators
Loans
— 3 Greater Manchester grants or funds initiatives — Business loans from £3,000 to £100,000 (€116,000) with interest rates typically between 8% and 15%
Additional information
ICT Infrastructure
Manchester has more National Grid supply points than London. The city has enough spare capacity to route all the internet traffic in the UK should the main peering point, Telehouse in Docklands, London, fail.
Manchester is an established data centre hub due to existing high levels of infrastructure from electrical power, communication fibre network and favourable climatic conditions.
Manchester airport is the third busiest in the United Kingdom and the global gateway to the North of England, and also the largest UK airport outside of London.
City airport Manchester handles private charter flights and general aviation. It is located 9.3 km (6 mi) to the west of Manchester city centre.
There is significant investment to upgrade the motorway network around Manchester to a ‘smart motorway’ to help speed up traffic at peak hours.
The city is well served by the rail network, with 60 direct trains a day to London (every 20 minutes), with a journey time of just over two hours. The High Speed 2 link to Birmingham and London is also planned, which, if built, will reduce travel time to London to roughly 1.5 hours. Freight trains are also numerous and frequent.
The Manchester Ship Canal connects Manchester to international shipping and container routes. More than 40 million tonnes of freight are handled a year through the port.
University links and access to talent
Manchester has 99,000 students in four universities:
— University of Manchester 7th in the UK according to the QS ranking, the University of Manchester has made a considerable contribution to the development of computing. This includes many firsts including the first stored program computer, the first floating point machine, the first transistor computer and the first computer to use virtual memory.
— Number 1 in the UK, the School of Computer Science is home to an Advanced Interfaces Group to explore real time collaborative working; a Nanotechnology Centre for the fabrication of new generation electronic devices; and an e-Science Centre and Access Grid facility for worldwide collaboration over the internet.
— Manchester Metropolitan University is one of the largest campus-based universities in the UK with a total student population of over 36,000. Its digital innovation initiative brings together start-up businesses, digital research and teaching in a unique environment called The Shed.
— The University of Salford has a digital campus at MediaCityUK, which is home to state-of-the-art facilities.
— The University of Bolton runs a large number of professionally accredited courses in computing and IT.
City support for start-ups and SMEs
The Landing @ MediaCityUK gives digital SMEs and micro-businesses a place to work alongside large media and technology organisations.
— eSpark – NatWest and RBS, together with KPMG, are stepping up their support for entrepreneurs and high growth for businesses with a network of new business accelerator hubs, including one in Manchester.
—The Vault is a new 2,000 sq ft facility within the XYZ building in Spinningfields aimed exclusively at FinTech/cyber security companies. The Vault will provide the infrastructure and the environment needed for start-ups to grow and will encourage collaboration and innovation.
— The Sharp Project is home to over 60 digital entrepreneurs, businesses and production companies who specialise in creating and distributing cutting-edge digital content in a collaborative ecosystem.
— Manchester Science Partnerships (MSP) is a science and innovation community based in the heart of Manchester’s knowledge quarter, known as the Corridor.
Financial support and access to investors & accelerators
There are 20 main VCs, Angel Networks and private equity funds and grants. The main accelerators are: Cisco and MSP in partnership with GCHQ and the Wayra ‘Engineer accelerator’ programme. The programme has brought together government’s intelligence and security organisation GCHQ and Wayra to get behind the tech disruptors. In partnership with IT and networking company Cisco and the UK’s leading science park operator Manchester Science Partnerships (MSP) this initiative focuses all its attention on local entrepreneurs and startups.
‘Access Accelerator’ Programme. The Landing and IN4.0 will work together over the next two years on several new projects that will support and educate industrial SMEs and start-ups across the North West who want to make better use of disruptive technologies to grow their businesses. designed to help manufacturing businesses start, scale and succeed in industry 4.0, the programme will be launched to an audience of industry experts at BAE Systems Academy near Preston. Access will be run from The Landing, which will also become the new headquarters of the IN4.0 Group. The group is also bringing Beaden Capital and DiceyTech Ltd to The Landing.
PwC is launching Scale Manchester in again in 2019 to support the region as a leading digital and technology hub. The programme will connect innovative and high growth scale-ups with opportunities for commercial growth, market leaders and industry insiders.
There are also three main Greater Manchester grants or funds initiatives:
— Greater Manchester Investment Fund, which is essentially the public sector acting as a £100m lender to business projects as debt or in exchange for an equity stake.
— Greater Manchester Export Fund which offers business loans from £3,000 to £100,000, with interest rates typically between 10 and 15%.
— Northern Powerhouse fund loans which provides loans of between £25,000 and £100,000. Interest rates typically will be between 8-15% GC Angels supports businesses seeking access to angel investment, ranging from £25,000 up to £2m.
UK investors
— ECI Partners typically invest £25m to £100m of equity in deals valued up to £200m. Focus is on Technology, Media, Telecoms, Consumer, Business & Financial Services
— Endless LLP typically invest up to £75million per investment. Focused on UK headquartered businesses with a turnover between £10 million and £1 billion
— Equistone usually invests between £25million and £150million. Supporting Industrials, Consumer & Travel, Financial Services, Support Services
— Mercia Technologies typically invest between £50,000 and £250,000. Software & the Internet, Electronics, Materials, Manufacturing/Engineering, Life Sciences & Biosciences, Digital & Digital Entertainment
— Beech Tree Private Equity invests between £10million and £30million in Financial Services, Technology, Specialist Manufacturing, Support Services
— Living Bridge typically invests between £2million to £40million. Healthcare & Education, Consumer, Technology, Media, Telecoms, Services.
— LDC normally invests between £5million to £100million in Healthcare, Support Services, Technology, Media, Telecoms, Travel & Leisure, Industrials, Retails & Consumer, Construction & Property, Financial Services.
— Maven Capital Partners has been known to invest between £5million to £25million in IT/ Telecoms, Software, Automotive, Specialist Manufacturing.
— Northedge typically invests between £2million to £45million in diverse businesses.
— NVM typically invests between £2million to £12million in Healthcare, Business Services, Oil & Gas, Technology, Media & Telecommunications, Consumer, Leisure, Industrials.
— Palatine Private Equity usually invests £10million to £30million in Business Services, Consumer & Leisure, Financial Services, Healthcare, Skills & Training, TMT.
— Phoenix Private Equity invests in Consumer & Leisure, Financial Services, Healthcare & Education, Media & Information, Services, Technology.
— Zeus Capital typically invests between £1million to £350million in Alternative energy, Business Services, Consumer, Financial Services, Healthcare and Pharmaceuticals, Industrials, Technology, ‘Special Situations’.
— Acceleris Capital typically invests between £250,000 to £2million with a focus on technology.
— A2E Venture Catalysts invests in the whole company with 15-25% handed back to the management team. Focusing on Aerospace, Industrial decorative, training, medical equipment.
— PHD Equity Partners normally invests between £500,000 to £4million in all sectors.
— Aquarius Equity supports Life Science, Biotech, Therapeutics, Specialty Pharma and Medical devices.
How to set up a business: a quickfire guide
What are my options?
While there are numerous business forms, the most common initial start-up structures are as a sole trader and or a private company limited by shares.
A sole trader is the simplest structure as the individual does not need to register the company with a formal constitution. Sole traders enjoy minimal paperwork and benefit from the flexibility of moulding their business plan without consulting shareholders. The downfall of this structure is that sole traders are personally liable for all the debts and contractual obligations of the business.
Private companies limited by shares give a business its own legal personality. This means that the business owners are not personally liable for the company’s debts. Companies with this structure are also able to raise capital more easily due to tax incentives and greater credibility as a result of a company’s professional image. Although this structure comes with additional paperwork, the UK’s efficient online company system has made the submission of paperwork a relatively simply task.
What do I need to set up a company?
To incorporate a company, an individual needs to submit the following:
Company name: this must not be too similar to another registered name.
Registered address: you must provide a UK office address as the address to which all business letters and invoices are sent. While there needs to be a registered address in the UK, an international director does not need to be present at the address. The director only needs to ensure that it is a physical address from where they can receive mail. Many businesses use their accountant’s address where post can then be forwarded to the director or managed by the accountant itself.
Director: the name of at least one director. Directors need to be at least 16 years old. Directors do not need to reside in or even have visited the UK. Shares: the details of share capital with at least one initial shareholder.
Company documents: a Memorandum and Articles of Association are the legal documents which confirm company formation and dictate the rules by which the company will be run. While these may seem daunting, the UK government’s website (gov.uk) has a memorandum template and model articles which a director may copy and complete easily and quickly for submission.
How much does it cost?
The entire online registration process costs £12 (€14) and it takes up to 24 hours for the company to be registered.
Tax rates
Following registration, the company will be subject to a 19% tax rate on company profits. Additionally, the company may be liable to pay VAT if its taxable turnover exceeds £85,000 annually. VAT rates vary depending on services or goods rendered with the maximum VAT rate being 20%.
The UK government strongly supports start-ups and offers various tax relief and support schemes. Tax relief is usually possible on spending that is entirely for business use such as certain business travel or machinery. R&D tax credits are available to businesses which are working to advance science or technology. A company that profits from its patented invention could also benefit from Patent Box in which corporation tax is lowered from 19% to 10%.
Small businesses can also benefit from the Seed Enterprise Investment Scheme which offers both income and capital gains tax relief to the company’s investors.
To raise further capital, the government arm Innovate UK drives growth by supporting UK- based businesses through funding. To date, the scheme has invested around £2.5 billion. Businesses may participate through regular innovation competitions, which focus on different sectors.
Legal contact
Electra Japonas and Kaveesha Thayalan
The Law Boutique
Work.Life, The Law Boutique, 5 Tanner St, Bermondsey, London SE1 3LE
