12 Best UK cities for Startups, and Why
According to statistics, most small businesses up to 50% are operated right from the bone without any designated office or location. That is an advantage since location can be a big factor to consider when launching a business. In the UK, starting up a business in the right location may have a significant impact on your business.
An ideal business location is the area that will give you a high level of access to your target audience. Provision of affordable infrastructures has the support of the local and technical support. A location where your business slings with the regulations of the environment. Normally, the cost of living, infrastructure and other legal requirements varies from city to city.
Usually, the best cities in the UK are suitable for starting up a company or business among many other cities. However, even though they are among the best for small businesses, they are not the top cities when it comes to startups and small businesses. These locations are relatively expensive and competitive and are only suitable for entrepreneurs who love a competitive environment and can sort out the cost of their businesses in these areas.
Based on some factors, we will discuss the best UK cities for startups. These factors are the survival rates of business and the reason why it has become a popular start-up destination. Note that this lust is in no particular order.
1. Sheffield
Sheffield City has an impressive backstory from its industrial past. The city has transformed into a city known for its business opportunities and culture. In 2019, research by Paymentsense recognised Sheffield as one of the top cities to start a business. The city has a five-year startup survival rate of 44.9%, indicating that most businesses succeed in their early years. The city also has an affordable cost of living.
One of the key factors that contribute to Sheffield's thriving business environment is the network for startups and also the availability of seed funding. These resources in the city provide support for local entrepreneurs, helping them to turn their ideas into successful business enterprises.
Also, Sheffield's strategic location close to major cities such as London, Manchester, Birmingham and Liverpool ensures that businesses can easily access important markets from nearby major cities within a two-hour journey, enhancing the business's potential for growth and also increasing reach.
The city's tech industry has played a significant role in the economy of the city, with business consultancy Tech City UK estimating a 70% growth potential for Sheffield's tech industry. This sector is expected to have continuous growth in the coming years, further enhancing and maintaining Sheffield's reputation as a hub for innovation and technology.
The supportive business environment and strategic location, combined with the availability and success of the tech sector, make Sheffield an attractive location for entrepreneurs who want to establish and grow a business into success.
2. Cardiff
Cardiff City, the capital of Wales, has gained recognition as one of the best places in the UK to launch a startup. The city has an affordable cost of living, offering businesses affordable commercial slaves, transportation, and utilities making it easier for small husks to succeed. Cardiff has a five-year survival rate of 42% for new businesses, showcasing the city's supportive and conducive environment for startups.
Aside from the business-friendly attribute of the city, the city is also a well-known tourist destination that has boosted the city's tourism, retail and leisure sectors of the economy. As a primary business centre in Wales, Cardiff provided a good foundation for businesses to grow. The city is also enhanced by its ability to access talented individuals from nearby universities, such is a significant advantage for startups who need skilled professionals.
In the 2018 Tech Nation Report, the CEO of Cardiff-based AMPLYFI, Chris Ganje, emphasised the city's benefits to businesses. He pointed out some key sectors such as the easy access to talent from local universities and also the growing legal and financial support businesses get from both the government and banks. These factors, however, contribute to Cardiff's attractiveness as a location for startups, offering a conducive environment for new ventures to grow and succeed.
In summary, the combined affordable cost of living in Cardiff, the talented workforce and a strong system make it a prone location for entrepreneurs who want to establish and start up a business. Also, the city's flourishing tourism industry and status as a financial hub stand as an opportunity for entrepreneurs who want to start a business in the UK.
3. Liverpool
Due to the affordable rents of Liverpool and also the high number of tourists the city attracts, the city stands out as one of the best cities for starting a business. This combination helps in providing a successful business environment, with Paymentsense reporting a 38% five-year startup survival rate in the city.
The active tourism sector of Liverpool has a significant contribution to the city's economy, alongside the diverse dining options and various leisure activities. The city attracts both local and visitors, creating a dynamic and diverse market for business to flourish in. Also, Liverpool is home to four universities, which serve as a rich source of fresh talent. These reasons make the city an ideal location for businesses that are looking for skilled graduates and innovative things to hire.
Since the mid-1990s, Liverpool's economy has seen rapid growth, and this growth has continued till date. The city is expecting more growth in the future. The ongoing development of the city is driven by their investments in infrastructure, regeneration projects, and a supportive business environment that encourages entrepreneurship. The combination of low and affordable cost of living, the inflow of tourists, and easy access to a talented workforce makes Liverpool a good environment for startups and already established businesses.
4. Leicester
Over the years, Leicester has evolved from its historical background in textiles and shoe industries to become one of the top UK cities for launching a startup, particularly in the engineering, food, and retail sectors. According to Paymentsense, Leicester has a 40.5% five-year startup survival rate which reflects the city's supportive environment for businesses both new and already established.
In recent years, Leicester has seen a steady and rapid increase in new business registrations and job vacancies, showcasing a good and growing economy. The city's strong startup community plays an important role in this growth, an active organisation of networking events, industry fairs, and funding pitches to help entrepreneurs connect, learn and secure resources. These events help to build a sense of community and collaboration, which is important for the success and growth of new businesses.
Simply Business conducted a survey that highlights Leicester as one of the best locations or cities in the UK for female entrepreneurs. The city ranks third in the country for the number of female-owned businesses, showing its commitment to promoting entrepreneurial gender equality and supporting women in business. This, alongside the conducive and supportive environment for businesses, is a proof of Leicester's progressive approach to entrepreneurship and its dedication to building diverse leadership.
Leicester's growth as a business hub is also supported by the strategic location of the city, excellent transport links, affordable commercial properties and cost of living. These factors position the city as an attractive location for startups, looking for a place to minimise cost while maximising their reach and potential for success. The city's evolution from a traditional manufacturing centre to a modern, diverse business landscape shows the city's ability to adapt to industrial changes, making Leicester a good option for entrepreneurs across various industries.
5. Edinburgh
As London as a business hub in the UK grows more popular and expensive, Edinburgh on the other hand stands out as an affordable, highly attractive city for startups. With many benefits for new businesses like budget-friendly but high-quality office spaces as well as fast internet speeds, the environment provides a supportive environment for businesses. These benefits aid startups in operating efficiently while keeping costs manageable.
According to research by Paymentsense, Edinburgh has a five-year startup survival rate of about 42.9%, which is an encouraging statistic for entrepreneurs who want to start a business in that area. The city is also known for its higher education institutions, scientific research, and financial services, all of which contribute greatly to the economy through innovation and entrepreneurship.
Edinburgh's universities produce a steady flow of skilled graduates, providing startups with access to a wide range of talented workforce. Also, the city emphasises scientific research which helps in building an environment full of innovation and making the city a good choice of location for tech and research-based startups to survive.
Edinburgh's financial services sector is another significant opportunity for startups to utilise. The city has a well-established banking and investment infrastructure that provides valuable opportunities for new businesses to secure funding and relevant financial advice. The diverse economic system alongside the city's low and affordable cost of living and easy access to a talented workforce makes Edinburgh a good choice of a place for entrepreneurs who want to establish and grow their business.
6. Coventry
Coventry has established itself as one of the UK's leading cities for entrepreneurs. In 2027, more than 7,000 startups were established in the city, giving it the title of the fourth most entrepreneurial city in the UK, according to CoventryLive. The high number of new businesses shows the city's supportive and promising environment for startups. According to research by Paymentsense, the five-year startup survival rate of Coventry is 42.2%, showcasing the city's ability to welcome and support entrepreneurs.
The automotive sector has, for a long time, been the backbone of Coventry's economy. However, the city offers more than just the automotive industry. In addition to its strong presence in the automotive industry, Coventry has been growing in the finance, research, logistics, leisure and creative industries. The diverse economy provides startups with a variety of opportunities across different fields and sectors of the economy. Also, the presence of already established industries in these sectors creates a balance in the local economy of the city.
Conventry's supportive environment extends beyond the economic sectors. The city also offers affordable office spaces to meet the needs of small and medium-sized startups or already existing businesses. According to John Williams, the head of marketing and research at Instant Office, there is an increasing demand for flexible office spaces in Coventry. This flexibility also plays a role in attracting start-ups and larger companies, making it easier for businesses to find the perfect workspace to fit their growth.
The combination of a high startup survival rate, a diverse economy and also flexible offices makes Coventry a location of choice for both new and already established businesses. The city offers a supportive infrastructure that provides a good foundation for startups to succeed. Also, the active startup community of Coventry organised a variety of networking events, such as industry fairs and funding pitches, building connections and collaborations among entrepreneurs and also with entrepreneurs and investors.
7. Leeds
Leeds is a guide location for businesses due to its economic stability across different industries. The city houses UK's largest legal and financial centers, providing a solid foundation and environment for business growth and development. Also, Leed has a strong presence in sectors of engineering, medicine, publishing, food, retail, construction, creative industries and also digital technology.
In a study carried out by Bark.com, Leeds ranked the top city in the UK for launching a startup. Kai Feller, a co-founder of Bark.com, stated that Leeds' top position is expensive given its rapid evolution as a business hotspot. This recognition contributes to the city's rapidly growing reputation as a supportive location for entrepreneurs looking to start a new business.
According to research performed by Paymentsense, Leeds has a five-year startup survival rate of 41.9% which is a good percentage, showcasing the city's supportive environment for businesses. The diverse economy of Leeds also provides various opportunities for startups to go into different markets and industries, increasing their chances of success.
Leeds growing business ecosystem is further boosted by its strategic location and good transport links, which provide easy access to other major cities in the UK. This connectivity allows businesses in Leeds to reach a larger audience and market and also aids them in collaborating with partners across the country. The city's supportive infrastructure and affordable cost of living make it a good choice of location for both startups and already existing businesses.
8. Bristol
Bristol is rapidly gaining recognition as one of the UK's top locations for innovative technology and businesses. With a five-year startup survival rate of 44.8 according to research made by Paymentsense, Bristol creates a supportive environment for new businesses to succeed. The city has also gained the reputation of a leading smart city, known for its adoption of the latest advanced technologies and also the city's forward-thinking to urban development.
With a very strong presence in the tech industry, Bristol attracts tons of tech and engineering talents to the city. The rise in available skilled professionals in the city creates a diverse and innovative business environment, particularly for startups looking to start a business in the tech industry. Bristol does not only have a presence in the tech industry, but the city also offers various opportunities in other sectors, including electronics, aerospace and creative industries, offering a diverse environment for startups to explore various markets and find their niche.
The city's emphasis on innovative solutions and technology has led to the development of an effective support network for startups. Bristols has lots of incubators, accelerators and co-working business spaces that provide the necessary resources and mentorship for new businesses. These adequate facilities enabled startups to easily navigate the challenges of the early stages of the development of businesses and operate effectively.
Bristol's commitment to promoting a collaborative and inclusive business fitter enhances its suitable environment for businesses. The city hosts regular networking events, industry conferences and hackathons serving as a strategy to encourage the connection of entrepreneurs, sharing ideas, and collaborating on projects. The diverse economy supports the growth of individual startups and also contributes to the overall economy of the city.
9. Sunderland
Sunderland, with a five-year startup survival rate of 41.9% provides an excellent environment for startups. Historically known as a trading port, Sunderland has now evolved into a successful hub for automotive, science, services and tech industries. This transformation of the city has played an important role in shaping the city's economy to more technology.
Sunderland has a strong presence in tech. According to Tech Nation, Sunderland's digital tech sector grew by 26% between 2014 and 2016. This growth is a contribution of many factors, including the city's affordable rent and cost of living. These advantages gas made Sunderland a good location for startups, especially tech startups, leading to a significant expansion in the industry during this period.
In addition to the city's success in the tech sector, Sunderland is also a leader in automotive manufacturing and scientific research. The presence of these industries diversifies the economy, making the city adaptable to market changes. The diversity also offers various opportunities for startups to find their niche and succeed in a supportive environment.
10. Nottingham
Nottingham is a city traditionally known for its bicycle manufacturing and lace making. Over the years, have been transformed into a city with a strong presence in sectors of digital media, finance, retail and leisure. The city has a five-year startup survival rate of 43.4% which is quite impressive and showcases the city's provision of a supportive environment for new businesses.
Dab Smith Rye CEO of Detail Assist, talks about 5ye positive business conditions in Nottingham. He states, "As Retail Assist enters its twentieth year, we feel we have benefited from the positive conditions for business that Nottinghamshire delivers." These endorsements encourage the city's favourable environment for business growth and success.
Nottingham's features make it a comfortable environment for startups. The city also has a strong presence in the digital media sector, attracting businesses and talents interested in creative tech-driven ventures. Nottingham's finance sector also provides essential services and support for startups, enabling access to funding and financial expertise.
One of Nottingham's significant features is its young population. More than half of the residents of Nottingham are under 30, offering businesses added to a diverse and dynamic talent pool. The youthful demographics are a key asset in Nottingham, providing startups with a steady supply of innovative and sound individuals ready to contribute to their growth.
However, Nottingham's retail and leisure industry offers a wide range of opportunities for entrepreneurs. The city has a conducive retail environment and a successful leisure industry, creating a diverse market for businesses to explore. The combination of a strong economy, a young and talented workforce and a supportive business environment showcases the city's ability to support businesses.
11. London
As the city capital of the United Kingdom, London is an economic powerhouse that offers a wide range of opportunities to entrepreneurs. The city is home to a large number of highly trained professionals, providing startups with access to experts across various industries. London's extensive network of collaborative workspaces helps to build innovation and collaboration, enabling easy connections between startups, sharing ideas and growing their businesses.
Districts such as Silicon Roundabout and Shoreditch are particularly known for nurturing startups, especially those in the tech sector. These areas have become synonymous with innovation, attracting tech entrepreneurs from all over the world. The well-established investment infrastructure in London plays an important role in supporting bee businesses. Startups have wide access to funding options, from venture capital firms to angel investors, helping entrepreneurs secure the financial support needed to efficiently operate their businesses.
However, it is very important to consider the challenges associated with living and operating a business in London. The high cost of living and expensive office spaces can be a significant obstacle for startups, especially those in their early stages. Despite these challenges, there are a lot of opportunities and resources for entrepreneurs available in London, making it an attractive location for entrepreneurs who can afford to run a business in London.
12. Manchester
Manchester has become the leading business hub for aspiring entrepreneurs, especially those in the software development and digital marketing. The city has a strong academic network, with several universities and research institutions contributing to the evolved and diverse economy of the city. The academic presence provides a steady flow of skilled graduates and also helps in building collaborations between academia and industry, therefore driving advancements and new exciting business ideas.
One of the key advantages of Manchester City is that it has a mixed affordable cost of living compared to London. This affordability makes it easier for startups to manage their expenses and also allows them to invest in their business growth and development. Also, Manchester provides a supportive business environment, with lots of networking events and accelerators to help entrepreneurs connect with peers, mentors, and investors.
The city also provides an infrastructure that is conducive and supportive of business growth, with excellent transport links that make it easier to gain access to other major cities in the UK and beyond. The city also has a rapidly growing reputation as a tech hub and has attracted lots of businesses, including already-established companies.
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Conclusion
As an entrepreneur who wants to start a business in the UK, you might want to consider the best environment for your business, considering the cost of living, the access to other bigger cities and the presence of the city in various industries.