- New research analyses the UK’s 100 most populated areas on 12 key business indicators.
- Manchester tops the list after scoring well in factors including business births, high-growth businesses, and highly qualified workforce.
- Reading came in second thanks to the highest employment rate, fifth-largest increase in employment rate, and largest percentage of high-growth businesses.
- In third is Milton Keynes as a result of the drop in failed businesses over the last five years and for value added work.
Manchester has been ranked the best place to start a business in the UK, says new data.
The research, conducted by flexible workspace & coworking provider Colony, analysed the latest figures from the Office for National Statistics (ONS) on 12 key metrics that impact a new company’s chances of success. The metrics ranged from business births and broadband coverage to education levels and growth of the local economy, and were combined to calculate a weighted index score for the UK’s 99 most populated local authorities plus London.
Manchester scored 68.44 overall, putting it ahead of Reading (67.68), Milton Keynes (63.98) and Central Bedfordshire (62.67) as the top spot for fledgling companies.
How Manchester won the top spot
Manchester topped the list after receiving top 20 scores for 7 out of 12 factors, including one of the best scores in the study for business births. Its percentage of businesses newly registered for VAT and/or PAYE in 2023 was 12.37%, the fourth highest of all 100 areas that were measured, highlighting the city’s vibrant entrepreneurial scene.
The study found that Manchester boasts an impressive number of ‘high-growth businesses’, which are defined by the ONS as companies with an average growth in employment of greater than 20% per year over three years. A total of 5.84% of businesses in Manchester meet this criteria, a proportion which is only bettered by five other areas in the analysis.
Alongside good rates of business birth and growth, Manchester scores well for its companies’ chance of survival over the past five years. Its percentage of companies that ceased activity fell from 13.5% in 2019 to 12.4% in 2023, the ninth-best improvement in the list.
Manchester also offers new businesses access to one of the best qualified workforces of all 100 areas in the analysis. It scores in the top five for the percentage of the working population to have qualifications of A-level (or equivalent) and higher, with 77.3% of people aged between 16 and 64 educated at or above this level – almost double that of Basildon (41.3%), the lowest scoring location.
Reading
In second place is Reading thanks to a combination of productivity and workforce quality. With the highest local employment rate in the country at 86.1%, it offers businesses access to a strong and experienced talent pool while also suggesting a stable and active local economy.
Beyond that, Reading boasts the sixth highest score (6.05) for gross value added (GVA) per hour worked in the ranking. The area’s estimated value of goods and services produced per hour worked stood at £49 in the most recently available figures, indicating strong local productivity. A key reason for this is the prevalence of high-value industries like finance and technology in the area, which typically outperform sectors such as retail or hospitality in terms of GVA.
Milton Keynes
Milton Keynes ranks as the third-best place in the UK to start a business, thanks to its strong economic performance and impressive business growth momentum. It ranks fourth overall for the percentage of businesses that qualify as high growth, 6.3%, which is level with London and behind only Trafford and Reading in the rankings. The number of high growth businesses in the area has also increased considerably, growing by 49.39% between 2019 and 2023 – the eighth best increase in the study.
Milton Keynes demonstrates a high level of productivity, with a gross value added (GVA) per hour worked of £47.2, placing it among the 10 top-performing areas for economic output per worker hour.
Central Bedfordshire placed fourth overall on a score of 62.67, while Stockton-on-Tees came in fifth on 62.67. The top ten was rounded out by Edinburgh in sixth, Portsmouth in seventh, London in eighth, South Gloucestershire in ninth and Wokingham in tenth.
A flexible future for business
Jamie Halliday, Head of Marketing at Colony, says, “As more entrepreneurs choose where to start up based on cost, connectivity, and community, flexible workspaces are becoming an essential part of the business landscape. They allow startups and growing teams to access professional space without the long-term costs of a traditional lease.
“Manchester is an attractive area to young entrepreneurs and qualified workers, offering the career opportunities of a major city, great transport links and overhead costs that are much more manageable than London.
“We conducted this research to see which area was the kindest to blossoming businesses, with many startups beginning in a Colony office. In recent years, Manchester has welcomed the headquarters of some household names: Puma, AO.com and Auto Trader, and this study offers some great insights as to why the city was top of their list too.”
The UK’s top 10 areas for starting a business
Based on an overall score out of 100 across 12 indicators:
- Manchester (68.44)
- Reading (67.68)
- Milton Keynes (63.98)
- Central Bedfordshire (62.67)
- Stockton-on-Tees (62.57)
- City of Edinburgh (60.63)
- Portsmouth (60.54)
- London (60.18)
- South Gloucestershire (59.55)
- Wokingham (59.42)
