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Which UK city is best for business?

by Janine, May 2017

Start-up failure rates in the UK can be high, which is bad news for the economy. But with Brexit in motion, it’s imperative now more than ever that new businesses are able to thrive and grow up and down the country.

There are many reasons why new business ventures fail. Flawed business plans, poor management and lack of investment are some of the more common reasons for insolvency. But just how many businesses manage to thrive in UK cities? And how much does location determine business success?

Using data supplied by the Office for National Statistics, we analysed how many new enterprises survived past the first five years across 30 UK cities. We also compared the growth rate in each city by comparing the number of new business start-ups and business demises from 2011-2015.

Fancy your chances?

Getting a new business up and running is not an easy task and the first few years are crucial. We have analysed the number of new businesses that were registered in 30 UK cities in 2011, to see just how many of them were still trading in 2015.

The results show that 92% of businesses are still likely to be running after one year. In year two, however, survival rates start to decline, with around 74% still trading. In year three, the survival rate sits at just 58%. Less than half of new businesses, around 49%, make it past the five-year mark.

So, which cities have the highest survival rates?

Of the 30 cities that we analysed, 16 of them proved to have a survival rate that was higher than the 49% average. The locations that came out on top may seem surprising.

Based on the graph, the top 10 cities with the best survival rate over a 5 year period are Stoke, Chester, Cambridge, York, Bath, Oxford, Edinburgh, Norwich, Leeds and Belfast. However, 7 out of the top 10 cities for survival rates are actually in the lower 50% for the number of registered new business start-ups.

When we analysed which cities encourage the biggest percentage growth, the results are very different.

So which UK cities encourage business growth?

Top 10 cities for growth

We calculated the total number of business start-ups and business demises over a five-year period, from 2011-2015, to determine business growth for each city.

So perhaps unsurprisingly, London encourages business growth the most, with an increase of 36.61% over a five-year period.

Manchester is the second most positive city for business growth. With a growth rate of 30.14%, it is the most encouraging northern city in England.
Meanwhile, in Scotland Edinburgh offers the best odds with a growth rate of 27.06% survival rate, beating Glasgow and Dundee.

Interestingly, Bristol takes the third place on the top 10 podium, with a business growth rate of 28.48%. The underdog contender beats the likes of Liverpool, Birmingham and Newcastle upon Tyne.

Oxford and Cambridge both made it into the top 10. However, Oxford won the race between the two rivals with a growth rate of 27.39% compared to Cambridge’s 23.39%.

So, if you’re starting a new business venture perhaps head to one of these UK cities, where business is booming.

How did other UK cities compare?

So, we can see the cities where business thrives the most, but which ones have the lowest growth rate? Check out our league table to see how your nearest city measures up.

Cities for business table

Methodology
Using data from the Office for National Statistics from 2011-2015 business survival rate and business growth rates were calculated for 30 UK cities. Business survival rates were analysed over a five year period and the overall survival rate for the UK was determined along with individual figures for each city. Business growth for each city was calculated by comparing the total number of business births and deaths over a five year period to find the percentage increase.