Startup Cities: The Top Places in the UK to Start a Business

It is no secret that 2020 was not an easy year for entrepreneurs. Lockdown regulations and wavering consumer demand massively hampered the growth of many startups and small businesses. However, as we begin to slowly recover from the social and economic impact of COVID-19, projections from Micro Biz Mag reveal that more than half a million new businesses are likely to enter the market this year. So, with the entrepreneurial spirit in the UK appearing to be at an all-time high, where are these budding business owners looking to set up shop?

Typically, London is one of the most desirable locations to launch startups because of its global reputation and extensive professional network. However, due to rising competition, new business funding options and demand elsewhere in the country, many startup owners are casting their gaze outside of the nation’s capital. So, to help budding entrepreneurs settle on their ideal location, this article outlines 6 up-and-coming hotspots that are giving London a run for its money.  

Top Places in the UK to Start a Business


Colloquially dubbed the ‘Steel City’, Sheffield has gained an international reputation for its rich, industrial history. While post-industrial decline plagued the city for decades, it still remains a nationwide hub for manufacturing technologies. Also, due to the low costs of living and running startups in the city, it is now considered one of the most promising cities in the UK for new businesses to settle. 

According to research conducted by the merchant services provider, Paymentsense, the northern powerhouse, is one of the top cities in the UK for startup survival, with 44.9% of startups managing to make it past the five-year mark. Also, with two prestigious universities providing a pipeline of talent to startups across the city, it’s no surprise that Sheffield continually ranks high against other UK cities. 


Another city that is being increasingly recognised for its startup potential is Cardiff. The Welsh capital offers an affordable place for new business owners to settle down, and the same research from Paymentsense reveals that it also boasts a competitive five-year business survival rate of 42%. According to Chris Ganje, CEO of the Cardiff company AMPLYFI, an increasing amount of legal and financial support from local government and banks also stand behind the cities, increasing desirability. 

In addition to the affordable nature of the city and the promising funding opportunities it offers, the launch of Cyber Wales and Tech Wales have also made Cardiff an attractive location for tech startups — with the cities fintech sector contributing £2 billion of GVA (Gross Value Added) to the region’s economy per year.


Globally renowned for its vibrant tourism, nightlife and dining industries, Liverpool is another UK hotspot that is attracting startups in droves. According to a recent Global Startup Ecosystem Report by the research firm Startup Genome, the Manchester-Liverpool region ranked 9th in the world and second nationally for its suitability for new business owners. This places Liverpool’s city region higher on the index than globally reputable locations like Chendu and Dubai.

The report ranked the area high on access to early-stage funding, ability to scale up, and the performance of newly established startups. And in addition to these promising factors highlighted by Genome, the Northern city is also home to four leading universities, which makes it a promising hub to recruit fresh talent.


While this coastal city may not be the first one to come to mind when thinking of entrepreneurial hotspots, the business financial platform Tide recently ranked Bournemouth as the best place to start a business outside the capital. The municipality was positioned first due to the 95.8% rise in startups between 2018 and 2019 and its impressive five-year survival rate of 45.65%, which makes it the best fifth-best performing city in this respect. 

Since the results of this survey, the city has also witnessed a massive amount of regeneration, with a £21.7 million grant recently being awarded to the area of Boscombe to create a new living, retail, and commercial space. This, combined with the stream of promising tech, media and arts graduates from the leading institutions The Arts University Bournemouth and Bournemouth University, allow the southern city to be a very competitive alternative to bigger, better known urban areas. 


With the cities core speciality being the ‘Internet of Things’ (IoT), the Scottish capital’s startup scene has global recognition and is only growing in size and scope. According to a report by UK Tech News, Edinburgh was the fastest-growing tech hub in the UK in 2017. And, it’s currently home to one of the highest numbers of verified startups (2,442) outside of London, including industry leaders like Skyscanner, Ice Robotics and Rockstar North.

A significant factor behind Edinburgh’s desirability is its affordability. Compared to other populous cities, Edinburgh offers new business owners a low-cost environment to build foundations and prepare for future growth. Also, with the city boasting super-fast internet speed and all the opportunities of larger, more expensive cities, it’s no surprise that an increasing amount of entrepreneurial minds are heading for the Scottish hub. 

Final thoughts 

When it comes to setting up a business, location is everything. It’s one of the most important aspects of starting a company, and the decision will often determine whether a startup is likely to succeed or not. When figuring out your ideal location, we recommend that you carefully consider the affordability and five-year survival rates of the city. By making sure that operational costs are low and survival rates are high, you can ensure your small business has the best possible chance of getting off the ground.

However, these figures aren’t the be-all and end-all. The best city for your business will be the one that is best suited to your unique needs and preferences. So, by reading this list above, we hope you’re one step closer to deciding on your dream location. 

About Carson Derrow

My name is Carson Derrow I'm an entrepreneur, professional blogger, and marketer from Arkansas. I've been writing for startups and small businesses since 2012. I share the latest business news, tools, resources, and marketing tips to help startups and small businesses to grow their business.