The best places in the UK to start a business
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It’s a fact: freelancers, contractors and the self-employed are playing a huge part in keeping the UK running.
If you’ve recently started, or are thinking about starting a business - great! Your country needs you!
Small businesses are vitally important to the UK’s economy and are a key driver of growth and sustainability. That’s why it’s good news that in the first half of 2021, 80 new UK-based businesses were being created every hour.
SMEs – or small and medium-sized enterprises make up 99.9 per cent of the nation’s business population.
Of the 5.6 million SMEs recorded in 2021, 5.3 million were microbusinesses - companies employing less than 10 employees.
But not all areas of the country are equal when it comes to offering the conditions required for a small business to succeed.
Three things that make small business success easier to achieve are:
cheaper running costs
access to skilled staff
business support and finance, like Start Up Loans
Sortlist.com’s SME Guide also looked at factors such as broadband speed, public transport, office and electricity costs, and even happiness.
So where should you start up to stand the best chance of success?
The top 3 cities to start a business are Edinburgh, Leeds and Kingston upon Hull. Surprised?
Read on to find out why!
1. Edinburgh
Out of all UK cities, Edinburgh has one of the lowest percentages of unskilled workers, with just 4.2% of Edinburgh’s working-age population possessing no qualifications.
So that ticks the box for getting the right staff in your startup.
But what else does Edinburgh offer?
Workers and customers are spending more time online than ever before and Edinburgh boasts the second highest broadband download speed in the UK. At 115 megabits per second (Mbps), Edinburgh is keeping pace with Newcastle upon Tyne and Milton Keynes, but it’s not quite as WiFi-wondrous as Kingston upon Hull.
As businesses increasingly transition to hybrid ways of working, choosing to start a business somewhere you know you’ll get a fast connection seems sensible to us.
2. Leeds
Taking the silver “startup city” medal is Leeds, where electricity costs were some of the lowest in the UK when the research was published in September 2022.
With energy prices reaching record highs, Leeds is an attractive location for new businesses. At the time of Sortlist’s research, electricity cost 18.2 pence per kilowatt hour (p/kWh).
(If keeping your overheads down is a current concern, you might like to read about how the Energy Bill Relief Scheme will help businesses.)
Another strength of the Yorkshire city is that just 6.6% of Leeds’ working-age population lack qualifications, meaning start-ups will have no trouble finding skilled workers.
3. Kingston upon Hull
In third place as the best UK city for start-ups, Kingston upon Hull’s only setback according to Sortlist’s SME guide is that there is no major airport nearby.
Kingston upon Hull has the fastest recorded broadband on the list at 171 Mbps.
Combine that with the fact that the city has one of the lowest office rental costs of £10.49 per square foot, and a low electric cost of 18.2p/kWh. It definitely looks to be one of the cheapest places to start a business, but has a slightly higher proportion of unskilled workers (11.1%).
Visit Sortlist.com to see the scores on the doors for all 23 cities surveyed.
What about the best places to find investors?
When looking at where to launch a brand new business, you might also want to know where the UK’s keenest investors can be found.
UK financial services provider CMC Markets analysed Google Ads data across the most populated areas of the UK, to determine where there was the greatest interest in investing.
Examining the monthly search volume for investment-related search terms allowed them to work out where people are most interested in investing.
Cities were ranked according to two factors:
Combined number of monthly investment-related search terms
Number of search terms per 100 thousand people
CMC Market’s research puts Reading in the top spot for having the keenest investors in the UK, followed by Bristol, London and Manchester.
Given that London has the biggest business district in the country and a population over nine million, it may be surprising that London places behind Reading and Bristol in the ranking. But Londoners are certainly keen, searching the term ‘investment’ 12,100 times per month on average.
In fifth place for keen investors is Edinburgh, with 1,185 monthly searches per 100 thousand residents. TechRound reported that “the Scottish capital ranked highly due to its population of more than 500,000 people and an average total of approximately 6,250 combined monthly search terms related to investing”.
Base your business wherever works for you
At Transmit Startups we’re super interested in how the small business sector keeps evolving, and we’re committed to serving the whole United Kingdom with the best in business support.
Throughout the recent political and economic chaos, success stories of entrepreneurs achieving great things kept coming in thick and fast. Each time this happens, the Team Transmit and our colleagues at Smarta take time to celebrate - because every bit of good news matters.
Alongside the British Business Bank, we’re celebrating the 10th anniversary of the Start Up Loans programme.
We’re feeling particularly proud of the fact that four of the 2022 Start Up Loans ambassadors accessed their loan through Transmit Startups, including the team behind Pastéis Lisboa, in Glasgow.
Emma and Sebastian took out a loan of £20,000 each to set up Pastéis Lisboa, Scotland’s first specialist Pastel de Nata bakery, after falling in love with the delicacy themselves in Portugal.
Glasgow just sneaked onto the list of top UK cities for startups and ranked 6th on areas in the UK that are home to the keenest investors. But if we’re looking for Portuguese pastries, it’s our number one!
The British Business Bank recently shared a league table of the UK’s top local authorities for startup businesses.
The data was collected from Start Up Loans customers since the scheme began in 2012, and is based on the number of Start Up Loans successfully drawn down over the past 10 years by small business owners in each area.
Nationally, the top local authorities for start ups weighted against population size are:
"We’re delighted to be the 2000th loan recipients!"