The four best cities in the UK for entrepreneurs looking to run a business

10 min read

12 February 2016

Entrepreneurs whose aim it is to start a business this year should invest plenty of time in the planning phase in order to research the pros and cons of not just their product or service, but of the town they choose to set up in to counteract any hurdles.

An intriguing paradox has sprung up around technology in the workplace. Surveys such as the one carried out by ClickSoftware in April 2015, which tout the importance of job location to employees, jar with conventional wisdom that suggests technology has made location all but irrelevant in the world of work.

But while location may matter less now from a practical perspective, greater choice and flexibility has elevated it to a level of emotional importance that actually makes it of far greater consequence than ever before. This was highlighted by ClickSoftware’s findings, which revealed location is the most important factor keeping 57 per cent of UK workers in their jobs.

As such, and through the help of research by University College London’s School of Management, we unveiled the top four cities to start a business in.

(1) Bristol

In top spot is Bristol, which also ranked first place in “Startup Cities Index 2015” largely due to its above average business survival rates. 

At the forefront of its propositioning is the UK’s busiest port – Royal Portbury Docks – which reaches over 42m people and has become of great importance to businesses looking to gain access to international markets. It is also home to the Bristol Temple Quarter Enterprise Zone, which looks to boost economic growth and already has over 350 businesses on site.

Furthermore, the city offers two research-led universities, of which the University of Bristol is ranked among the top 30 universities across the globe. In addition, a large proportion of Bristol’s labour force are well qualified, with 45.6 per cent of the working age population having NVQ Level 4 qualifications and above.

The West of England Local Enterprise Partnership has also recently been awarded £86m to develop Bristol. One of its central focuses is to generate private investment in the Temple Quarter Zone, with a goal of creating 4,000 jobs by 2017, and around 17,000 jobs in the 25 year lifespan of the project.

The area has a particular focus on science and technology, given that Bristol is home to the High Value Manufacturing Catapult Centre. And its Bristol and Bath Science Park offers lab space, hot-desks and a “grow-on centre” where fast-growth businesses can become residents in order to scale.

Business will also be privy to the West of England Growth Fund, which provides grants between £10,000 to £80,000 to businesses and projects that will generate economic growth, the West of England LEP, which distributes grants from the government’s Regional Growth Fund, as well as several loan funds including the Microcredit Fund.

Read more UK-based lists:

(2) Greater London

London has been deemed the business capital of Europe, with Forbes recently declaring it as the most influential city in the world, beating the likes of New York, Paris and Singapore.

And according to a report from Tech City UK, roughly a sixth of the 1.46m people employed in digital companies across the country are based in the capital – the tech population of Bristol, Bath, Manchester, Reading and Leeds combined still doesn’t add up to London’s share. However, another report suggested that balance may be starting to shift, with as many as two-thirds of London startup bosses saying they considered leaving the capital after their first year in business. 

This is in large part due to the sometimes painfully expensive office space, however, the capital offers 47 universities; access to tons of financial investments; a host of co-working spaces designed for startups to ease the cost of rents; and the networking opportunities that come with being right in the thick of it.

Another key factor in London’s offering is its continued capital injection, with the capital seeing nearly $10bn of VC investment since 2010. Such financial support, coupled with a booming tech market, as well as improvements in infrastructure, is making London the of the hottest locations in Europe for tech startups.

It also has a a progressive regulatory environment, as well as general incentives like the Seed Enterprise Investment Scheme, capital gains and R&D tax credits – and is home to the Business Growth Fund and the new British Business Bank. The former has directly invested over £400m of growth capital in more than 70 British scale-ups, while the British Business Bank has invested almost £150m in a number of growth finance funds and lenders in the UK scale-up sector.

Read on to find out which other two UK cities made the list.

(3) Birmingham

Recorded as having the highest number of new startups in 2014, as well as the most active business population, Birmingham is home to one of the largest business conference venues in Britain: the National Exhibition Centre. It also houses the Bullring, one of the UK’s top commercial centres, which currently accommodates over 500 brands. 

Its most recent accomplishments include establishing itself as a tech hub otherwise known as “Silicon Tech Canal”, with support for startups coming in the form of the Birmingham City Centre Enterprise Zone, which aims to create 40,000 new jobs and add £2bn a year to the economy over the next 25 years. 

February 2015 saw the launch of Natwest’s accelerator programme at Birmingham’s St Philip’s Place, launched in partnership with Entrepreneurial Spark, which has space for 80 entrepreneurs and culminates with an investor event with cash rewards of up to £50,000 on offer.

It also has a plethora of science parks which offer mentoring, office facilities and research and collaboration opportunities. And additional incubator schemes include Entrepreneurs 4 Future, which is targeted at early-stage tech and clean tech businesses. Birmingham further boasts its own Business & IP Centre – an EU-backed support service created in partnership with the British Library – which opened in July 2014. It offers a wide range of materials and resources, as well as access to free and low-cost business workshops, seminars and one-to-one advice services. 

Based on the above, it’s not hard to see why Birmingham was the fourth city selected for such a centre.

(4) Brighton and Hove

Brighton, otherwise known as “Silicon Beach”, is one of the UK’s entrepreneurial capitals with more startups per capita than anywhere else in the UK.

With plenty of office space available at several sites, it also features enterprise centre Denton Island, which provides incubator units for startups with one to ten people, as well as the Sussex Innovation Centre, which aims to help startups and corporate innovators. Coast 2 Capital is another initiative looking to foster growth by connecting new and established local businesses with relevant support services. By 2030, it wants the city to have a sustainable economy, as well as be resource-efficient.

Indeed, Brighton seems geared for support, with the city also offering startups with high-growth potential the opportunity to attain funding from University of Sussex’s leading science park. Entrepreneurs will also have access to fund management organisation Finance South East.

Then there’s the Digital Catapult, which will focus primarily on the “Internet of Place”, and will be looking to develop innovative projects for small businesses to use and learn from, as well as hosting a series of events to foster collaboration.

In terms of attaining talent, there are several initiatives available, including the University of Brighton-operated CENTRIM, which offers an internship programme linking graduates with local companies.