Around 600,000+ new businesses are registered in the UK every year, which is the equivalent to 70 businesses being started every hour. Evidently, the entrepreneurial spirit of UK citizens is still burning bright. However, when it comes to business success and death rates, this passion isn’t reflected positively…
There, of course, are a wide range of reasons why small businesses struggle to survive in today’s market; one of these reasons being location.
Aurora decided to perform a deep dive into the best locations for starting a new business, taking Companies House data to identify where most incorporations are occurring relative to population density.
A full breakdown of the best startup locations in the UK, some of which will definitely surprise you.
The 10 Best Startup Locations
The UK’s Surprise Silicon Valley
Bromsgrove is the most surprising result. Out of the 296 locations, this small town in Worcestershire has the highest incorporation to population ratio. In other words, they have the highest number of new business startups for their current population count.
For every 13 people, there’s a business incorporation.
This is not the first time Bromsgrove has come out on top when it comes to business startups. The data goes as far back as 2016 and ever since then, Bromsgrove has been making headlines.
They offer a range of benefit, including startup business centres which offer rent as low as £60/week. Support and guidance is also offered to new businesses as well as financial support for those who require funding.
However, Bromsgrove is not the only smaller town magnetising startups…
The Startup Underdog
Warrington was also discovered as a startup hotspot in the research. The data reveals that for every 14 people a business incorporates. With a population density of 209,000, this is very impressive.
Steve Parks, Director of Growth for Warrington Borough Council, says:
“Warrington continues to be one of the UK’s most successful places economically and is one of the key engines of growth in the Northern Powerhouse. A key reason for this is our business-friendly approach to everything we do. We are committed to creating new and well-connected business development areas, actively supporting growth and investment and enhancing Warrington’s talent – its people.”
Steve Parks attributes Warrington’s success to excellent transport links, the town’s ‘can do’ attitude, and the various real assets for start-ups and SMEs. These include the Pyramid Digital Hub, the Base Business Incubator, and the enhanced St James Business Centre.
It’s this continued investment in business that makes Warrington so attractive for new businesses.
“This investment in business is a fundamental part of our ‘Warrington Means Business’ strategy, which aims to unleash the potential of the town’s people, its businesses, its connectivity and its sense of place, to accelerate economic growth and reinforce Warrington as a strong national driver of prosperity.”
The Elephant in the Room
So, with the best and most surprising startup locations revealed, there’s still an elephant in the room…
Where is London?
London scored 9th on our list, which is surprising given the size of the city. Saying this, although it doesn’t get high marks for incorporation to population ratio, it does win overall in terms of incorporation rate as a standalone statistic.
London is such a large city that it makes up for 22% of all incorporations in the UK! Beating both Birmingham and Manchester by a longshot.
It’s not hard to see why London has a high incorporation rate. Investing in London locations gives you access to top talent, a highly connected ecosystem, and unique investment opportunities.
It’s a hard offer to turn down if you’re looking to start a fresh company and require all the help you can get when building new foundations.
The North-South Divide
Although the research investigated the UK as a whole, there were clear winners when looking deeper into regions.
The North-West and the South-East (with little clusters in the middle) appear to be where the powerhouses are present. Cities like London, Reading, and Watford stand strong in the South, whereas, towns such as Warrington and Manchester rein in the North.
There are, of course, outliers. For example, Norwich scores high yet sits far in the East of England. In comparison, Bromsgrove and Leicester are situated in the midlands.
Nonetheless, a high concentration of incorporations occur in North-Western and South-Eastern territories, and it’d be worth diving into the reasons behind this further in future research (which is discussed later in this article).
Brexit and Business
With Brexit forever looming on the horizon, uncertainty plagues the business world. However, despite this, the rate of incorporation hasn’t slowed down. It’s good to see the event hasn’t resulted in a fear of failure when starting new business ventures.
George Holmes, Managing Director of Aurora Capital, is positive about the future of startups and new businesses.
“Despite the uncertainty around Brexit, it’s been great to see so many businesses forming in the UK. Over the last 12 months, we have personally seen an increase for start-up funding across the UK. I expect these numbers to increase next year now the UK future is clearer”.
Brexit has definitely had an influence on the rate of new business developments. However, there is now optimism surrounding the future of UK business and entrepreneurship, especially following the findings of this research.
Following the exit from the EU, it will be interesting to investigate the effect it has on the rate of incorporations in the UK, particularly in locations such as Bromsgrove and international hotspots like London.
Future Directions for Research
There have been a few studies prior to this looking at similar metrics and drawing similar conclusions. However, this is one of the first to utilise recent statistics from the Office of National Statistics (ONS).
Our goal was to assess the rate of business startups, not the survival rate or business expenses that ensue from setting up in one of these locations.
Thus, future directions for research could look into the survival rates from setting up in these high incorporation locations. They attract the business, but can they sustain it?
More research could also be performed on the prices of rent, transport links, and the difference between sectors (technology, fashion, etc.).
Where are you Starting your Next Business?
After investigating the data, it’s clear significant start-up locations exist within the UK. Bromsgrove and Warrington reign supreme with the highest incorporation rates. London trails at the back in position 9 and Brexit hasn’t seemed to have an impact on the state of new business in the UK.
If you’re looking to start a new business and need funding to get you off your feet, get in touch today on 020 3355 7462.