Wondering the best city to start your business? With growth opportunities and potential earnings to balance alongside living costs and quality of life, there’s a lot to consider when choosing a location for your small business. Fortunately, new research reveals the top spots for entrepreneurs across the UK.
Simply Business looked at six factors to create our Best UK Cities for Small Businesses Index for 2024. So, whether you’re considering moving to a new location to follow your big dream or happen to live in one of these cities already, keep reading to find out which cities made our rankings.
Where is the best place to start a business?
Of course, there’s a lot more to running a business than just choosing a location. We have guides to help you with things like tax and marketing if that’s what you need. But if you’re looking for inspiration and some tips on what you should consider, here are the top 15 UK cities for starting a business.
We researched UK cities and ranked them based on the following factors:
- business growth
- average turnover
- average monthly rent
- coworking locations
- quality of life
- startup programmes
Our top 10 cities…
City | Business growth* | Average turnover 2023 | Average monthly rent 2023 | Coworking locations^ | Quality of life score (1=high) | Startup programme score (1=high) |
|---|---|---|---|---|---|---|
26% | £77,855 | £793 | 5 | Not ranked | 2 | |
9% | £102,532 | £2,125 | 175 | 3 | 1 | |
12% | £77,906 | £643** | 2 | Not ranked | 8 | |
10% | £74,483 | £656** | 2 | Not ranked | 8 | |
8% | £74,613 | £594** | Not ranked | 8 | ||
4% | £89,221 | £1,037 | 16 | 6 | 4 | |
16% | £61,863 | £740** | 1 | 1 | 5 | |
9% | £79,029 | £912 | 9 | 7 | 6 | |
14% | £58,135 | £656** | Not ranked | 6 | ||
7% | £85,311 | £930 | 3 | 8 | 3 |
…and the cities ranked in the top 15
City | Business growth* | Average turnover 2023 | Average monthly rent 2023 | Coworking locations^ | Quality of life score (1=high) | Startup programme score (1=high) |
|---|---|---|---|---|---|---|
12% | £82,919 | £796 | 1 | 9 | 7 | |
10% | £68,050 | £798 | 1 | 2 | 5 | |
2% | £78,672 | £762 | 2 | 10 | 3 | |
6% | £74,788 | £1,291** | 11 | 9 | 6 | |
4% | £74,082 | £1,374 | 10 | 5 | 7 |
*Top cities that created a new insurance policy in 2022 vs 2023 that had greater than 1,000 per region. **Regional averages used for Norwich, Stoke-on-Trent, Coventry, Doncaster, Brighton. ^Number of coworking locations based on HubbleHQ data
Business growth data is based on where people created a new Simply Business insurance policy in 2023 compared to 2022 (with greater than 1,000 policies in each region).
We also looked into the number of coworking locations as using these creative spaces is a growing trend for freelancers and the self-employed. Coworking can offer the chance to be around people who share the same entrepreneurial spirit.
Read the full methodology here.
Why business location is important
Business location can be more important depending on what your trade is and whether you operate from a business premises or online. Either way, checking out the competition in your area is an important part of business planning.
If you’re an online business then you’re more free to run your business from anywhere – you could even be a digital nomad – but there’s still living costs and wifi speeds that could factor into your decision.
Where are the highest paid small business owners in the UK?
The figures below are based on anonymised data for newly self-employed people who have business insurance with Simply Business. We worked out the average turnover for each city based on information customers provided when taking out a new policy in 2023.
City | Average turnover 2023 |
|---|---|
London | £102,532 |
Manchester | £89,221 |
Glasgow | £85,311 |
Sheffield | £82,919 |
Birmingham | £79,029 |
Top 15 cities to start a business – ranked
Here’s our list of UK cities that topped our rankings.
1. Newcastle
Newcastle claimed our top spot for most new businesses started in 2023. The city scored well for growth in new businesses and average turnover. It also has cheaper monthly rent than many of the cities on our list, making it an attractive option for people taking the leap into self-employed life.
And when it comes to startup programmes and business support, Newcastle came second in our table thanks to a great range of support offered through the North East Growth Hub and an incubator network through Barclays Eagle Labs.
2. London
Unsurprisingly, London tops the table when it comes to average earnings, startup programmes, and coworking spaces. But with that comes an average monthly rent of £2,125, so the high cost of living could push many entrepreneurs to consider more affordable cities in the UK.
Despite the cost, the UK capital also came third for quality of life thanks to better work opportunities and overall lifestyle.
3. Leicester
Our data shows a high average turnover for entrepreneurs in Leicester, as well as a 12 per cent growth in new businesses for 2023. And with average monthly rent for the region less than a third of what it costs to rent in London, it’s a highly affordable city to live and work.
Leicester also has programmes such as Barclays Eagle Labs and the Leicester Startups community, which offers a support network and funding for new businesses.
4. Coventry
Similar to Leicester, the average turnover and number of new businesses in Coventry has granted it fourth place in our rankings. The city saw a 10 per cent increase in people taking out a new policy in 2023 compared to 2022, so it might be worth considering the medieval city for your next venture.
Meanwhile, programmes available for businesses include the Start-Up Programme and Coventry University Enterprises Limited.
5. Doncaster
Doncaster made the top five in our Index with the average turnover for 2023 hitting £74,613. It also has the lowest monthly rent – £594 a month for South Yorkshire. This balance between earning potential and cost of living could make it an attractive option for founding a new business.
While there’s not much on offer when it comes to startup programmes, the city does have Launchpad and Startup South Yorkshire to help businesses start and grow their ideas.
6. Manchester
A city with historical architecture steeped in its industrial past, Manchester offers an exciting quality of life and plenty of things to do. And while average rent is at the higher end of the table, earnings are higher to match.
Those thinking of starting a business can also benefit from plenty of startup programmes and incubators to get a new business off the ground. Opportunities to explore include the Natwest Entrepreneur Fintech Accelerator, Manchester Digital, and accelerateme, but there’s countless others if you start researching.
7. Norwich
Norwich came second on our list for business growth, with a 16 per cent rise in new customers based there in 2023 compared to 2022. But while the rent is low, the average turnover for 2023 isn’t as high as other areas on our list.
There’s a range of grants, funding, and business support for businesses based in Norwich and the surrounding region. For example, Sync the City offers an Apprentice-style competition for startups, while the New Anglia Small Grant Scheme is open to businesses in the area. Norfolk City Council has a full list of funding and grants available to startups to help with your research.
8. Birmingham
Birmingham is an affordable city to live in and ranks seventh in One Family’s best cities to live and work table, making it an attractive choice for new entrepreneurs.
Plus, Simply Business saw a nine per cent increase in new businesses started in the city in 2023, and an average turnover of £79,029. Programmes to help you get your business going include the BioHub Birmingham incubator and accelerator and the ScaleUp Programme.
9. Stoke-on-Trent
The Staffordshire city of Stoke-on-Trent came third for business growth in our research. We saw a 14 per cent increase in new businesses between 2022 and 2023, so it could be a thriving location for your startup.
Stoke-on-Trent has a range of grants, loans, and investment programmes for businesses too. For example, the Fly High Start-Up and Enterprise grant and the UKSPF Powering Up Inward Investment fund.
10. Glasgow
With startup programmes like Startup Grind and the Foras programme, there are plenty of ways to get your business idea off the ground in Glasgow. Plus Scotland’s largest city offers high earning potential (the average turnover is £85,311 based on Simply Business data), a thriving music and arts scene, and a relatively affordable cost of living compared to the rest of the UK.
Located in the western-central area of Scotland, the city also offers business accelerators like the Innovation Accelerator and inspiring coworking spaces like Collabor8te.
11. Sheffield
The South Yorkshire city of Sheffield has a strong industrial past and is surrounded by green space and countryside. This helps boost its score when it comes to cost of living and value for money in One Family’s rankings.
Simply Business saw a 12 per cent increase in new businesses in 2023 too, indicating it’s a strong region for startups. And business support in the city includes the TwinklHive Accelerator and the South Yorkshire Incubator and Accelerator Network.
12. Liverpool
Liverpool saw 10 per cent growth in new businesses started in 2023 compared to the previous year, so it could be a great choice for your new business. Plus, the average monthly rent is reasonable and the maritime city ranks well for general quality of life and happiness too.
If you’re looking for business support programmes, opportunities in Liverpool include Barclays Eagle Labs, Baltic Ventures tech accelerator, and blueorchid.
13. Belfast
The Northern Ireland capital, Belfast, calls itself ‘the city for business’ and offers a range of support for startups in the city. Programmes such as Spare Room to Stellar and Go Succeed are designed to help you get started.
With an average monthly rent lower than most of the locations on our list and good earning opportunities, it’s earned a deserved spot in our rankings.
14. Brighton
The seaside city of Brighton and Hove scores well when it comes to coworking locations and general happiness. However, the city fell down the scoreboard due to higher monthly rent in the region and the number of new businesses started in 2023.
Inspiring spaces to work from include Projects and Platf9rm where you’ll find a community of freelancers and networking events. There’s also a healthy amount of startup programmes, including Barclays Eagle Labs and Plus X Innovation. You’ll also find business incubation services at the University of Sussex.
15. Bristol
Bristol is a cultural hub and has been voted one of the happiest cities to live, so makes a great choice for creative entrepreneurs.
With plenty of coworking spaces, exciting career opportunities, and startup programmes available, Bristol’s an exciting location for small businesses. However, average monthly rent is higher than most cities on our list so you’ll need to consider your prices and budget when choosing your startup location.
For business programmes in Bristol, check out SETsquared Bristol or the Natwest Entrepreneur Fintech Accelerator.
‘Quest to save on associated business costs’
Alan Thomas, UK CEO at Simply Business, comments: “Small businesses sit at the heart of our communities and play a vital role in our local and national economy. Our recent SME Insights Report revealed that more than a quarter (26 per cent) of small business owners in the UK believe that they will be forced to cease trading if the outlook for their business does not improve. Half of SME owners believe the rising cost of living is the most glaring challenge facing their business with rising taxes, interest rates, and inflation eating into profit margins.
“We know finance plays a huge part in starting or growing a successful small business. A quarter of small business owners cited lack of funding (25 per cent) as a major factor affecting their business. Which means regional support such as startup programmes, average monthly rent, and coworking locations take on additional importance in the quest to save on associated business costs. By thinking about where you set up your business, you can make sure you are best placed to hit the ground running.”
- Business growth – locations where people created a new insurance policy in 2022 vs 2023 that had greater than 1,000 per region
- Average turnover – average turnover provided by people who took out a new Simply Business policy in 2023, based on location and information they provided on their quote form
- Average monthly rent – from Zoopla Rental Market Report, December 2023 (data to October 2023)
- Coworking locations – based on HubbleHQ listings
- Quality of life – One Family’s City Livability Index, December 2023
- Startup programmes – startup accelerators and incubators found on local authority websites and Google Search
What do you think of our best city rankings? Let us know in the comments.
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