How Important Are Time Zones for Startups?

Startups are affected by a plethora of location-based variables that influence their operations. From the legal regulations enforced by countries of registration to practical, operational considerations, there are plenty of factors for entrepreneurs to consider when deciding where to start a business, and time zones are one of the most essential.

Different parts of the world operate in varying time zones depending on their geographical locations. Essentially, countries in the Eastern hemisphere have different time zones to countries in the Western hemisphere, putting the former behind the latter.

Of course, the whole concept of time zones is far more complicated than that since the idea of different hemispheres and east versus west is a made-up concept that humans have developed as an arbitrary form of organisation for the purpose of world order.

To make things significantly more complex, time zones are also affected by different countries making their own decisions regarding the time zones they fall into. Some of these decisions are practical and others are political.

The ins and outs of how time zones came to be are fascinating, but even more interesting are the ways in which they influence our lives, from our ability to keep in contact with friends, family and colleagues overseas to the operational efficiency of businesses and major corporations in different time zones.

How Do Time Zones Affect Startups?

Startups can be significantly influenced by different time zones, depending on where in the world they are, what they do and where employees, customers and manufacturers, among others, are based.

Essentially, it comes down to basic business hours and all the ways in which different time zones would affect organisational operations, including the ability to deal with customers during working hours, respond timeously to customer requests, effectively manage supply chain logistics and more.

Conducting business between countries with significant differences in time zones – like New York in the USA and Sydney in Australia, for instance, with a 14-hour time difference – can be a logistical nightmare, leaving little opportunity to communicate in real time, organise supply chain logistics and more.

However, there can also be advantages to operating with global partners or customers in opposite time zones.

It really comes down to specific startups and what they do, what their target markets are and so much more. Of course, some people and businesses have complete freedom over where they live and which companies they conduct business in, such as digital nomads working freely around the world in whatever time zones suit them.

However, for most startups and businesses more generally, dealing with time zones is a bit more complicated than that.

These are some of the main considerations that need to be taken into account by startups concerning differences in time zones and where they choose to establish themselves.

Customer Service

Businesses with customers in different time zones may have difficulty communicating efficiently and timeously during business hours, since it’s possible for customers to reach out for support during business hours in their own time zone but outside of business hours in the time zone of the company in question.

Unless the company has 24-hour support, this can lead to delayed response times to customer queries.

Of course, 24-hour customer support, with employees working all over the world in various different time zones, is the ultimate solution, but it’s not always possible, especially for startups.

Thus, the country in which a startup (and its employees) is based will very much influence customer service capabilities, and it’s advisable that this is considered at the outset.

Startups ought to consider things like where the majority of their customers are based when making big decisions about locations and time zones.

For instance, if most of your customers are based in Southeast Asia, a city like San Francisco may not be the most convenient location in terms of time zone practicality, as the 14-hour time difference will pretty much put you on opposite schedules.

However, if being able to offer real-time customer support isn’t a dealbreaker for your startup, then differences in time zones won’t necessarily be too big of a deal. It all depends on the startup in question.

Some parts of the world are particularly well-suited to being able to provide customer service in different time zones due to their central location, including places like the UK, Western Europe and central parts of Africa such as South Africa.

Since these countries operate at and very near Greenwich Meridian Time (GMT), they’re working within similar business hours to each other. More importantly, however, they’re also situated fairly centrally with regards to other major time zones, about half way between the United States, on the one hand, and Southeast Asia and broader Oceania on the other.

Global Operations and Collaborations

For startups that operate globally and participate in international collaborations, especially those that require a lot of back and forth, time zones are an important factor to consider.

For instance, companies may have several different international teams that need to coordinate activities and deal with clients.

Operating from various parts of the world, across time zones, is totally doable, but it requires a fair bit of planning and logistics in terms of scheduling meetings and setting deadlines.

Some parts of the world are particularly well-suited to global operations due to their centrality, as we touched previously, but another factor is the specificity of the industry in question.

For instance, startups needing to be in communication with people in countries like America may find themselves a little bit out of their own normal time zone, but since the USA has six different time zones, it can also provide extended opportunity for operations within the country more generally.

Supply Chain Logistics

Production and manufacturing companies are, arguably, the most important types of companies that need to properly consider time zones as differing time zones will have a significant impact on supply chain logistics.

Startups involved in anything to do with supply chain logistics need to assess their ability to coordinate operations between different regions. This involves managing things like shipping times, production schedules and delivery expectations.

An interesting factor is to consider is the advantage of operating in opposite time zones, so to speak, to where products are being produced.

For instance, somebody far out in Brisbane, Australia may place an order with a manufacturer in Florida in the USA at the end of their work day, but since Florida is 14 hours behind Brisbane, they’d only just be starting their day.

Therefore, by the time the Australians wake up the following morning, the order would have been received and processed, all outside of their business hours. Indeed, this is one example of how to use significant differences in time zones to your advantage ias a startup.

Marketing and Communication

A lot of marketing strategy is influenced by timing. That is, it’s essential that businesses consider the time zones/s of their target markets before sending marketing emails, launching ad campaigns or posting on social media.

For instance, a company based somewhere in Japan with a target market in the UK would be well advised to pay careful attention to the eight-hour time difference to ensure that, for instance, social media campaigns are posted at optimal times in the UK rather than optimal times in Japan.

Countries in Europe, however, and other central locations, would have less trouble with this since they’re likely to have a far greater target market within a smaller scope of time differences.

Financial Transactions

Startups whose operations revolve around stock markets have to be incredibly in tune with different time zones. Trading is very sensitive to timing, and different locations around the world have varying peak times based on a variety of factors.

Thus, it’s important for businesses that are involved with stock markets and financial trading to operate according to peak times in the countries in question as part of an effort to respond effectively to market movements and get the most out of their trades.

This requires a lot of logistical coordination and has the potential to significantly influence the operations and overall success of startups around the world working in finance.

One of the best places to be for startups working with stock markets and similar financial issues would be in New York or anywhere near Eastern Daylight Time. That’s because the US stock exchange is based in Wallstreet in New York City, and optimal business transactions would be conducted during business hours.

Compliance

Time zones can influence the deadlines of various legal aspects of business operations, including things like contract deadlines and compliance reporting, as well as other legal deadlines.

While it’s a relatively easy thing to work around, a great deal of organisation is required to ensure that all deadlines have been converted appropriately according to relevant time zones for startups to be able to avoid financial penalties and any other legal repercussions.

Competitive Edge

Proper management of time zones can provide businesses with a valuable competitive edge, as they’ll be able to respond quickly to not only customer needs and requests but also to both market opportunities and threats.

Startups will be more likely to be able to seize opportunities that arise suddenly and spontaneously if they’re operating in accordance with the relevant time zones. Conversely, they’ll also be able to respond quickly to any threats that arise, mitigating potential negative consequences.

Are Time Zones A Deal Breaker for Startups?

Ultimately, for most startups, it’s more about having a proper understanding of relevant time zones and being aware of how they may affect your business specifically than it is about having to actually be based in certain countries.

This certainly differs across industries and from one startup to the next depending on varying priorities. For instance, a company specialising in finance and and anything to do with the stock exchange would probably want to operate according to Eastern Daylight Time.

Meanwhile, startups that aren’t able to operate 24/7 but still want to reach as large a audience as possible during working hours may want to consider a central location like London or nearby European countries.

There aren’t any parts of the world or specific time zones that are inherently better or worse than others in terms of startup locations for optimal business operations. Indeed, contrary to popular belief, being located in so-called “far-out” locations like the most Western parts of the US or all the way in the Middle East isn’t necessarily a disadvantage.

Rather, it depends entirely on your specific business (what your startup does), what your priorities are (providing customer service, for instance, or managing manufacturing) and your ability to maintain logistical awareness of different time zones while understanding how to use them to your advantage.

Essentially, different time zones certainly can and will have an influence on startups, but these things can mostly be managed, limiting the disadvantages and emphasising advantages, by means of awareness and organisation.