Expert Opinion: Birmingham storms ahead as the UK’s heart of small business

Mobile payments platform SumUp have released the Small Business Index 2019 to uncover the status quo of small businesses across Europe. The study reveals how high levels of external support and investment for small enterprise cannot offset the cost of rising rent and real estate across Europe’s major metropolises. Small businesses are the lifeblood of communities across Europe, and this is certainly the case for Birmingham, the UK’s second-most populous city.

The Small Businesses Index 2019 analyses the 100 most populous cities across Europe, and ranks them according to four criteria: the amount and type of Small Businesses, Density, Real Estate factors, and various forms of External Support. While Spanish cities Valencia and Madrid rank first and second place, and Germany steals nine of the top thirty places in the ranking, the UK secures multiple positions thanks to Glasgow’s availability of rental spaces, London’s sheer volume of enterprise, and Manchester’s impressive score for External support, which involves factors such as financial measures, initiative of the population, and subsidies supporting small businesses.

Ranking 10^th place overall and first place for the UK, Birmingham offers comparatively cheap rent and alongside high levels of investment. In 2018, the Birmingham City Council won a prestigious award from the Federation of Small Businesses commending its work to stimulate the growth of SMEs across the city, and it’s clearly well-deserved. Glasgow tails narrowly behind; the most populous Scottish city ranks just behind Birmingham due to its low density of small businesses per capita. Entrepreneurs looking to attract new markets would be wise to head to this northern haven for their next venture.

“Small businesses support local people and protect the culture and authenticity of a city. At SumUp, we know it takes resilience and drive to overcome market competition. Our quick and easy payment methods allow growing UK enterprises to rival larger corporations when it comes to card payments” says Marc Alexander Christ, Co-Founder of SumUp.

The following table reveals the Small Business Index 2019 ranking of cities in the UK, with the highest score in each category highlighted in blue, and the lowest in yellow:

The following table reveals the top 30 cities in the Small Business Index 2019, and their overall score for each category:

The full Small Business Index 2019 and Methodology can be found here.

Further findings:

UK metropolises rank high for small businesses:

• For Density of small businesses in the UK, Cardiff and Edinburgh rank top. With less than 5% of the population of London, the Welsh Capital is filled to the brim with small enterprise. Edinburgh, in comparison, outperforms Cardiff for the availability of rental spaces, with a higher retail sales area provision per person.
• The UK scores consistently highly for Initiatives (criteria within External Support), indicating a strong small business and entrepreneurship interest. London scores full marks in this category, with Manchester and Birmingham following closely behind. In contrast, the availability and price of Rent and Real Estate is consistently poor across the UK, with Birmingham and Glasgow the only exceptions.
• Manchester, dubbed “the capital of the North”,  may not secure a place in the top 30 – the metropolis ranks 50th overall in the Small Business Index – but it does boast a high number of small businesses, particularly cafes and bars. As the third most visited city in the UK, Manchester is pulled down in the ranking due to its low availability of rental space and relatively high prices.
• Despite high levels of state venture capital investment and low corporate tax rates (both criteria within External Support), some UK cities rank poorly in the Index –Coventry, ranking 96th, the most obvious example. Wakefield (59th) and Sheffield (67th), midlands cities just 25 minutes apart by train, also have a low number of small businesses compared to the rest of the UK.