Know Your Money logo
Gatsby Storybook Starter

The Best Cities to Start a Business in the UK

The role that UK cities play in both the national and global economy is changing.

While London has long been the nation’s de facto centre for business activity, recent change has brought significant growth and development to other parts of the country.

We have already seen huge transformations take place in certain Northern cities and several places in the Midlands seem destined for a similar future. If not now, then certainly over the next 5 to 10 years, a whole new landscape will emerge, with many exciting opportunities for UK enterprises and entrepreneurs.

So, while London is still one of Europe’s economic powerhouses, it is by no means the only hub of opportunity in the UK for new businesses. In this guide, we rank the best places in the UK to start a business outside of the capital and leave you with our predictions about where business will thrive over the next decade, post-Brexit.

What makes a good place to start a business?

To make sure we’re all on the same page, we’ve outlined the major factors we believe make a good city to start a business. As every organisation is different, you may need to factor in your own set of unique criteria, but this list should give you a good place to start – combining a range of quantifiable data from official sources and unique insights from our own data.

Business landscape

Business survival rates, entrepreneurship

Access to talent

Nearby universities and skilled workforce, qualified at NVQ Level 4 and above

Quality of life

Average full-time weekly earnings, cost of renting a one-bed apartment, cost of renting commercial premises

Growth and development

Population, number of working adults

Infrastructure

Transport links, available business premises

Funding and support

Grants, business networks and centres

Future development

Infrastructure pipeline, businesses seeking finance

The UK business profile at a glance

  • Ranks ninth among world economies for growing, retaining and attracting talent, according to INSEAD’s 2019 Global Talent Competitiveness Index
  • Home to the largest air transport system in Europe, with transport networks ensuring connectivity across the country
  • Renowned for its world-class education system and for hosting several of the world's top universities
  • Extensive digital broadband and telecoms market with smart technologies increasingly integrated across its major cities
  • A leading destination for foreign direct investment (FDI) in Europe

Where are the top 10 cities to start a Business in the UK?

Take a look at the cities on our map to discover where the top 10 UK cities to start a business are located.

About this data

  • Business survival rate is defined as the percentage of businesses that lasted 5 years after incorporation between 2012-2017.
  • Active Business Population refers to the total number of active businesses recorded in 2017.
  • Data used in this report has been collected from a number of official sources, as well as industry research and analysis. These include, but are not limited to, Nomis, ONS, Numbeo, Colliers, Centre for Cities, Huawei, Office for Students and the BBC.
  • Data from Know Your Money has been collected on anonymous online users through Google Analytics to understand which cities are showing significant interest in business bank accounts and business loans. We have compared this to our analysis of each city to predict future business growth in specific UK cities.

Top ranking UK cities to start a business

1. Birmingham

Key Stats

Business survival rate

39.70%

Active business population

43,520

Commercial property rent (per sq ft)

£33

Cost of one-bed apartment (per month)

£734

Population estimate

1,137,123 (as of mid-2017)

Weekly pay for workers (gross per week)

£584.10

Local universities

5

NVQ Level 4 and above

241,900

Overview

Birmingham is considered by many to be the cultural, financial, and commercial centre of the Midlands. Once at the heart of the Industrial Revolution, it has become a modern-day hub for commercial activity, both nationally and internationally. Outside of London, Birmingham has the largest active business population in the country and a large talent base of adults with NVQ Level 4 qualifications or above. More affordable office and living space also make Birmingham an attractive alternative to London and a top contender for the best city in the UK to start a business.

As well as achieving the highest accumulated score in our analysis of UK cities, Birmingham shows clear potential for future growth with a large number of businesses seeking finance here, according to Know Your Money’s own data insights. Together with planned infrastructure in the form of HS2, which is set to create many new business opportunities across the region, Birmingham is a strong choice for businesses looking for a place to base their future operations.

Major considerations

The HS2 (High Speed 2) train line project is now under construction, which will connect London and Birmingham in a journey time of less than one hour. Also extending to Manchester when it reaches its second phase, this transport link is set to transform connectivity across the West Midlands and create many new business opportunities that stretch into the capital.

Those who migrate here soon may be able to benefit from a considerably lower cost of living and a less-saturated job market compared to London’s dense business space.

2. Sheffield

Key Stats

Business survival rate

44.90%

Active business population

18,180

Commercial property rent (per sq ft)

£24

Cost of one-bed apartment (per month)

£586.50

Population estimate

577,789 (as of mid-2017)

Weekly pay for workers (gross per week)

£542.10

Local universities

2

NVQ Level 4 and above

166,800

Overview

The transformation that has taken place in Sheffield in recent years has been momentous. Attracting both domestic and international investment, the city has demonstrated a great capacity to help businesses thrive.

Manufacturing, tech and IT businesses have done particularly well here and Sheffield’s recent investments in its creative and digital quarter have nurtured a strong start-up environment. Together with much lower costs of renting residential and commercial premises than in London, it makes for a good destination for many new businesses.

Major considerations

Devolution of the Sheffield City Region has long been on the cards and would see significantly more decision-making powers on infrastructure, transport, skills, housing and drivers of business growth given to the region. While it has been stalled since its initial introduction in 2015, the Government has agreed to make good on this agreement, which could bring millions in investment to the local economy over the next 30 years.

The Government has also confirmed that Sheffield city centre will be directly connected to HS2 and Sheffield Midland Station. With concerns over fast and efficient transport being one of the major issues for those residing in Sheffield, this move will reduce journey times to London by 40 minutes and open up new labour markets, expanding business opportunities across the region. Similarly, Sheffield will benefit from the development of Northern Powerhouse Rail, which could reduce journey times to Leeds and Manchester to under 30 minutes.

3. Glasgow

Key Stats

Business survival rate

36.10%

Active business population

21,840

Commercial property rent (per sq ft)

£31

Cost of one-bed apartment (per month)

£634.26

Population estimate

621,020 (as of mid-2017)

Weekly pay for workers (gross per week)

£542.10

Local universities

5

NVQ Level 4 and above

197,100

Overview

Glasgow has recently undergone major regeneration and has benefited from several investments in its infrastructure. As Scotland’s second-biggest city, it has pulled in a large talent base in the technology sector, nurturing a strong start-up presence in this industry. Businesses in Glasgow also have access to several grants available for small businesses, administered through Business Gateway and Scottish Enterprise.

While crime rates were once the biggest drawback for those thinking of relocating here, these have fallen significantly in the last decade, while the active business population has continued to grow.

Major considerations

Following an awarded investment of £24 million from the UK Government into digital infrastructure and open data, Glasgow has become a world-leading smart city, with an estimated £150 million generated from its initial investments in 2013, according to the Government. Since it was picked out to become a future city demonstrator, it has delivered successful growth in its businesses, as well as improvements to citizen experience and overall safety.

It has done so, using creative technologies and open data to develop new solutions for creating an interconnected smart city. Glasgow also boasts a highly qualified labour force with four universities within 10 miles of its city centre.

4. Leeds

Key Stats

Business survival rate

41.90%

Active business population

33,335

Commercial property rent (per sq ft)

£30

Cost of one-bed apartment (per month)

£648.86

Population estimate

784,846 (as of mid-2017)

Weekly pay for workers (gross per week)

£551.90

Local universities

6

NVQ Level 4 and above

197,600

Overview

After London and Birmingham, Leeds is the third largest city in terms of active business populations in UK cities. Located in the Northern county of Yorkshire, it is also central to the economy in this region. Outside of London, it is considered the largest financial centre in England, making it an important location for many fintech start-ups over the last few years.

Perhaps, due to the strength of its education sector, with an impressive six universities within the area and a high level of qualified adults with NVQ Level 4 qualification or above, it is also a strong contributor to the UK’s knowledge economy, with an ambitious pool of talent available for new businesses.

Major considerations

Both Manchester and Sheffield are less than an hour away from Leeds by road and rail, and Leeds Bradford International Airport is close by, offering opportunities for regional, national and international business. The growing number of businesses in the financial services sector is notable, with many firms seeing the potential in Leeds’s lower cost of living and less-saturated labour market in comparison to London.

Leeds is also set to benefit from the Northern Powerhouse Rail plan, linking it with Manchester via a new line, opening up business opportunities between these large Northern economies. HS2 will integrate with Northern Powerhouse Rail and provide further travel opportunities to London, Sheffield and Birmingham.

5. Coventry

Key Stats

Business survival rate

42.20%

Active business population

11,465

Commercial property rent (per sq ft)

£16.50

Cost of one-bed apartment (per month)

£653.08

Population estimate

360,149 (as of mid-2017)

Weekly pay for workers (gross per week)

£595.10

Local universities

2

NVQ Level 4 and above

85,400

Overview

Coventry and the wider region are proud to lead the way in advanced manufacturing, automotive engineering, and digital gaming. Benefiting from strong growth factors such as low commercial rent and digital connectivity, Coventry has done well to support local start-ups with certain initiatives supported by Coventry City Council and the Coventry Chamber of Commerce – boosting the rate of job growth here. Along with other cities in the West Midlands, Coventry has an excellent pedigree in advanced manufacturing, especially aerospace, which is helping to drive UK exports.

Major considerations

The Coventry and Warwickshire Local Enterprise Partnership contains one of the largest volumes of gaming companies in the UK. Centering on Leamington Spa, also known as “Silicon Spa” and an “established mecca of video games production” according to the UKIE (the Association for UK Interactive Entertainment), Coventry should offer excellent networking and collaboration opportunities for companies interested in breaking into this sector.

In terms of transport links, Birmingham International Airport can be reached in just 15 minutes by car, while Birmingham city centre itself can be reached in under an hour. Regular train services also run to London Euston and take just over an hour.

6. Edinburgh

Key Stats

Business survival rate

42.90%

Active business population

21,400

Commercial property rent (per sq ft)

£32.50

Cost of one-bed apartment (per month)

£766.74

Population estimate

513,210 (as of mid-2017)

Weekly pay for workers (gross per week)

£613.30

Local universities

5

NVQ Level 4 and above

208,400

Overview

While the cost of accommodation and commercial premises is relatively high in Edinburgh, a draw for many entrepreneurs and businesses is what the city has to offer beyond working hours. This has led to a number of sources ranking the Scottish capital as one of the best cities for quality of life in the world. Edinburgh's talent base is incredibly strong, coming behind only Birmingham in this list, with a high proportion of the population with NVQ Level 4 qualifications and above. Contributing to this is perhaps the existence of a number of universities in the area, including the world-class University of Edinburgh.

Major considerations

Edinburgh is well-located within a thriving business landscape. It is also home to one of the nation’s leading science parks and research centres, as well as a cluster of emerging start-ups. This has all contributed to a now established commercial environment where a great number of new businesses are thriving.

In terms of research and development support, the University of Edinburgh is active in promoting new innovations in the city, supporting companies in science and technology industries with a number of incubation centres. Similarly, Edinburgh is one of the best places to start a business in Scotland as it encourages the tech industry to thrive, with support for new start-ups coming from both the University of Edinburgh and the City of Edinburgh Council.

7. Bristol

Key Stats

Business survival rate

44.80%

Active business population

20,535

Commercial property rent (per sq ft)

£32

Cost of one-bed apartment (per month)

£860.71

Population estimate

459,252 (as of mid-2017)

Weekly pay for workers (gross per week)

£565.70

Local universities

2

NVQ Level 4 and above

155,900

Overview

A popular choice for individuals migrating away from London, Bristol is an incredibly exciting location for today’s businesses, with a mix of tech, aerospace, legal and creative industries all thriving in this West Coast harbour city. It boasts an impressive business survival rate which comes second in this list, as well as a growing start-up community that has attracted considerable new investment over the years. Bristol is also another location where quality of life is a large game-changer for businesses – ranked first this year in best places to live in the UK for Under-26s by the BBC.

Major considerations

Awarded leading smart cities status in 2017, Bristol has made significant efforts to develop smart innovations, with attention paid to areas such as digital connectivity, infrastructure, energy and healthcare. It is also home to a thriving enterprise zone known as Temple Quarter, which supports hundreds of new businesses.

In terms of transport connectivity, Bristol is well-placed for links to the South West as well as the North, with most UK cities accessible through direct rail or road networks. New businesses in Bristol also have a range of funding options such as the West of England Growth Fund and West of England LEP (Local Enterprise Partnership), which can offer grants and discretionary discounts through the government’s Regional Growth Fund (RGF).

8. Nottingham

Key Stats

Business survival rate

43.40%

Active business population

10,380

Commercial property rent (per sq ft)

£19.50

Cost of one-bed apartment (per month)

£583.33

Population estimate

329,209

Weekly pay for workers (gross per week)

£506.40

Local universities

2

NVQ Level 4 and above

70,200

Overview

Nottingham has seen major investment in recent years across its communities and the city centre, including the completion of new tram lines and investment in the city’s two universities. Nottingham also has a strong reputation as a technology centre with a thriving hub of digital and tech businesses. It holds status as one of the UK’s official Science Cities and is a world-leader in science and technology innovation in research and business, making it an appealing choice for companies in this field, such as medical start-ups. Moreover, the city’s reasonable cost of renting accommodation and commercial premises is much lower than many other cities on this list.

Major considerations

Nottingham is one of the fastest-growing cities in the Midlands and is experiencing a significant period of economic regeneration, partly fuelled by the £250 million Southern Gateway development and the £150 million re-development of the Broadmarsh shopping centre. It is also set for another boost, following plans to connect it to the new HS2 high-speed rail link by 2023, to add to its convenient location in the heart of the East Midlands.

The Creative Quarter of the city centre offers a number of funding programmes and grants, to encourage its growing tech and life sciences cluster. Business loans from these programmes range from £500 to £25,000 for new start-ups and existing businesses based in the area.

9. Leicester

Key Stats

Business survival rate

40.50%

Active business population

13,900

Commercial property rent (per sq ft)

£17

Cost of one-bed apartment (per month)

£581.67

Population estimate

353,540

Weekly pay for workers (gross per week)

£487.90

Local universities

2

NVQ Level 4 and above

66,400

Overview

Leicester is one of the most diverse cities in the UK. It is also one of the most visited retail locations, with both its manufacturing and motor vehicle repair industries making important contributions to the UK economy. Increased development over the last few years has allowed significant job growth and employment here, while accommodation and commercial property rent prices have remained reasonable, when compared to other contenders in this list of best places to start a business – making Leicester a fairly inexpensive city to live, with strong potential for new businesses.

Major considerations

Geographically, Leicester is centrally-located in the UK, with access to the M1 and M69 motorways, with an East Midlands train service getting you to London. The East Midlands airport is also less than 30 minutes away. Leicester benefits from a range of grant schemes for businesses, such as the Leicester & Leicestershire Enterprise Partnership operating a £21 million RGF-backed. This offers grants of up to £1 million to small and medium-sized businesses located in Leicester and the surrounding region.

10. Brighton

Key Stats

Business survival rate

43.20%

Active business population

15,910

Commercial property rent (per sq ft)

£30

Cost of one-bed apartment (per month)

£962.27

Population estimate

288,155 (as of mid-2017)

Weekly pay for workers (gross per week)

£532.80

Local universities

2

NVQ Level 4 and above

104,100

Overview

In recent years, Brighton has become an impressive hub for innovation, with developments in digital technology earning the seaside town the title of ‘Silicon Beach’, partly due to its mature community of tech start-ups. Despite having a smaller population than many other cities on this list, it has a strong active business population and high volumes of educated adults with NVQ Level 4 qualifications and above. A large proportion of Brighton’s workforce are also engaged in the creative and digital industries, making it an appealing place for new businesses in these areas who want to move away from the capital.

Major considerations

In terms of transport connectivity, Brighton is less than an hour away from London and Gatwick airport can be reached in under 30 minutes by train, with the A23 and M23 motorways offering decent road connectivity to the region. While not as pricey as London, Brighton is still an expensive place to live, compared to other cities in this list.

Whether this is a result of housing stock not keeping up with demand from buyers and renters, or if increased popularity in the city has brought with it a higher cost of living, new businesses will have to pay considerably more for the pleasure of basing their operations by the South Coast.

Know Your Money’s Future Cities

The outcome of Brexit will redefine the UK’s international relationships, while domestic investment will signal the future growth of various cities and regions across the country. Meanwhile, technology and evolving business culture are set to reshape the world of work across Europe.

Driving factors include the Government’s plans to spread an estimated £600 million worth of investment into transport, energy and digital infrastructure across the nation, as well as social infrastructure and sector-by-sector development.

A renewed focus on housing will also change the way local communities support regional growth, with hundreds of thousands of new homes set to be established in key locations. These are all things that need to be considered by any fledgling business or entrepreneur.

With this in mind, we’ve added our own unique insight into the world of business financing, as a way to try to predict future growth. Using anonymised opt-in data as a measure, from thousands of people interested in business loans, commercial mortgages and business bank accounts, we have been able to interpret where entrepreneurial interest is growing and predict where we think business activity could blow up over the next five to ten years.

The results of our research show that Birmingham comes first after London in terms of overall interest in business finance products, and is the city most interested in business banking and business loan products. In terms of commercial mortgages however, Nottingham comes first outside of the capital in terms of interest in products under this search term, followed closely by Sheffield and Birmingham, in joint third position.

There are some unsurprising names on this list, but the appearances of places like Nottingham, Leicester, Sheffield and Cambridge are very interesting, highlighting the changing landscape of UK business. Of definite note is Birmingham’s reappearance in first place in our Future Cities predictions, indicating the potential of this Midlands city to become one of the biggest driving forces for the UK economy, post-Brexit.

Cities predicted to grow significantly over the next 5-10 years

Rank

City

1

Birmingham

2

Nottingham

3

Glasgow

4

Coventry

5

Bristol

6

Leicester

7

Brighton

8

Sheffield

9

Cambridge

10

Leeds

Business product searches by city

Knowyourmoney.co.uk's Business Loans, Business Bank accounts and Commercial Mortgages traffic split by city 2018.

Business BankingBusiness LoansCommercial Mortgages0%25%50%75%100%
  • London
  • Birmingham
  • Glasgow
  • Nottingham
  • Coventry
  • Bristol
  • Leicester
  • Brighton
  • Cambridge
  • Sheffield
  • Leeds
  • Edinburgh
  • Manchester
  • Cardiff
  • Reading
  • Northampton
  • Milton Keynes
  • Liverpool

Business Banking

Business Loans

Commercial Mortgages

Rank

London (Region)

51.15%

38.56%

44.29%

1

Birmingham

5.58%

7.33%

7.14%

2

Nottingham

3.65%

3.37%

9.29%

3

Glasgow

4.04%

6.89%

2.86%

4

Coventry

5.58%

5.28%

2.14%

5

Bristol

2.69%

5.13%

5.00%

6

Leicester

2.88%

4.69%

3.57%

7

Brighton

2.88%

4.55%

3.57%

8

Sheffield

2.69%

2.49%

5.14%

9

Cambridge

3.08%

2.49%

3.57%

10

Leeds

2.50%

3.52%

2.14%

11

Edinburgh

3.46%

2.35%

1.43%

12

Manchester

1.54%

2.93%

1.43%

13

Cardiff

2.31%

2.35%

1.43%

14

Reading

1.35%

2.20%

2.86%

15

Northampton

2.50%

2.35%

n/a

16

Milton Keynes

1.15%

1.17%

2.14%

17

Liverpool

0.96%

2.35%

n/a

18

Best cities for specific sectors

Sector

City

Financial services

Leeds

Professional services

Manchester

Tech services

Brighton

Retail and wholesale

Cambridge

Manufacturing

Sheffield

Video games

Coventry

Legal services

Bristol

Naturally, different cities will have their own pedigrees when it comes to sector development. If your choice of city requires you to be at the heart of any particular industry, it is well worth considering the top location for your field when choosing your next base of operations. We’ve outlined which cities excel in specific industries, based on our own research into the volume of businesses, the largest brands and companies located in each city, as well as the general business landscape.

The best business location

Depending on your goals, what makes a strong city for one company might make it a weak one for another. So, we’ll finish with some final factors to consider when reviewing this list of best UK cities to start a business.

Immediate location

Does the location of your business (in relation to customers or clients) matter? Depending on your type of business, easy access to a busy high street or location within a commercial business park might make a significant impact on your profits – regardless of the city you choose.

Competition

High business survival rates and a healthy overall business population are strong signs of a thriving start-up economy, but does this mean more competition? Understanding how local enterprises could negatively affect your own venture is important.

Operating expenses

The location of your business can influence the total cost of operation. Cash will be tight in the early years so starting a business in a cheaper area, especially if you require large storage spaces or operate an online e-commerce-based enterprise, can really help you get things off the ground.

Nic Redfern, Know Your Money

Small Businesses are key to the future of the UK economy and this study shows a lot has been done to develop an economic environment across the country in which they can thrive. There are challenges ahead for some interesting cities that did not make it into the Top 10, clearly there is still more work to do to help the spread of opportunity reach across the country.