A NEW breed of small business, dubbed TOTs, could add over £5m to Leeds’s economy and create up to 850 new jobs in the area over the next 12 months, according to the Henley Business School (HBS).
TOTs, an acronym coined for the T-Mobile 12 Study, describes firms that are Twelve months old; have an Optimistic outlook on business; and are Technologically-minded, using social networking sites and smartphones to boost their business from the outset.
According to the study, the top five ‘TOTspot’ locations are London, Manchester, Liverpool, Leeds and Bristol.
This new breed of British business is growing quicker than the average start-up according to the study, conducted by the HBS. Six out of ten Leeds TOTs predict they will increase revenues by 31 per cent or more over the next 12 months.
With TOTs in Leeds generating between £100,000 and £180,000 revenue in their first year, this results in an extra £31,000 to £56,000 turnover per firm. Even if 10 per cent of the firms started in Leeds in 2011 became TOTs it would add a minimum of £5m to the local economy, the study found.
The study revealed the average Leeds TOT employs five permanent staff, with almost nine out of ten planning to recruit at least two to three more over the next year. Again, if just 10 per cent of new start-ups in Leeds become TOTs they could create around 600 to 850 new jobs over the next 12 months, the study concluded.
The study was commissioned by mobile communications company T-Mobile to investigate traits displayed by successful businesses that survive their first 12 months. The findings are being used by T-Mobile to help tailor its business offer to this specific sector.
Given the economic backdrop in which these businesses were set up, the research reveals TOTs have focused on improving cost performance, boosting export performance and being highly flexible as a business. Nine out of ten TOTs export goods and services to markets around the world – 49 per cent trade with Western Europe and 44 per cent with Eastern Europe.
While in order to control costs and flex with volatile market conditions, two thirds said their firms do not want to commit to long-term contracts or leases.
Martin Stiven, vice president of business for T-Mobile, said: “It’s clear that Leeds is benefiting from these optimistic young firms that have embraced technology and are creating jobs.”
The research also found that the vast majority of TOTs rely on smartphones for emails, organising their day and accessing business apps. They also use social networking sites like Twitter, Facebook and LinkedIn to promote products, network with potential customers and get real-time feedback on products and services.