It’s fair to say that London can often dominate the business conversation in the UK, with much of the country’s economic and financial infrastructure situated in the capital. But for younger businesses, the idea of ‘life outside London’ is growing as regional cities begin to play a greater role in the start-up scene.
Recent research has shown in fact that Bournemouth, on the south coast (and approx. 1.5 hours from London) represents the best opportunity for those looking to launch and grow a business. The survey was based on the following metrics:
- The average monthly gross disposable household income (GDHI) after tax and deductions, according to ONS
- The ONS Unemployment Claimant count rate %
- The ‘Spend’ and ‘Footfall’ recovery scores for each city (CentreForCities)*
- The reported number of businesses in each city within five business niches, according to ONS
Each data point was then combined to create an index ranking for each city, out of a total possible 100 points, across different business niches. The results show that London only ranked 9th out of the most promising markets, with the top five below Bournemouth rounded out by four northern cities: Leeds, York, Doncaster and Newcastle. Indeed there are a further three northern powerhouses in the list – Bradford, Manchester and Warrington – before you reach London in ninth place.
Of course, there’s more to life than simply starting a business. Growing in and maintaining its survival is perhaps an even greater challenge, and again there are regional differences across the UK for business survival rates. According to Bionic, Bristol has the highest survival rate, with 44.36% of startups registered having survived for five years.
That is followed by Brighton and Hove, where 44.13% of businesses making it to the five year mark. Leeds third at 42.88%, with Sheffield and Cardiff rounding off the top 5 with a 42.66% and 42.34% 5-year survival rate respectively.
Up in Scotland, 42.12% of businesses in Edinburgh survive, compared to Glasgow city at 37.46%.
It’s also worth noting where London sits in the list. Out of the 83,600 businesses set up in London in one year, only 39.35% survived the five-year milestone.
Of course the fact that a big proportion of startups fail does pose the question why. There are many and varied reasons for failure, and interestingly, The Telegraph says that its research has found that 60% of all new businesses tend to fail in the first 3 years. The most common reasons include:
- 42% fail because there isn’t a need for the products or services they’re offering
- 29% fail because they run out of money
- 19% were beaten by competitors
- 18% failed because they priced their products or services poorly
- 14% failed because they were unable to market themselves effectively
What all this shows is that businesses need the right kind of support to flourish. Whether that’s through government help (often via the tax system) or through professional advice and guidance, there’s no substitute for getting the right tools in place.
Given that the UK remains a leading destination for growing companies, understanding the options open to your business can make a big difference to your growth story. We’re right here for all your needs, and you can contact us for help and support in a number of areas, from tax and payroll to accounting and banking.