They say that the first five years are the toughest when starting a new business, and many startups don't make it past this point.
Whether it’s the struggle to stand out in your niche, getting your brand out there or keeping a healthy cash flow, there are a lot of challenges when you’re starting out, but where your business is based could have an impact too.
Here at BusinessComparison, we’ve studied five-year survival rates of startups around the UK to see where new businesses have the highest chance of succeeding.
The UK’s Best
Startup Cities
To identify the UK’s best startup cities, we looked at how many new startups were founded in 2013 and how many of those businesses were still going five years later, in 2018.
To show just how tough it is when starting out in business, less than half of startups made it past five years in any of the thirty cities that we looked at, with the average survival rate for the country as a whole standing at 42.4%.
The city with the best survival was Bristol, with 44.4% of new startups surviving to the five-year mark, with an economy built on industries such as creative media, electronics and aerospace.
The only other cities to show a higher survival rate than the national average were Brighton and Hove (44.1%) and Leeds (42.9%).
At the other end of the scale, Plymouth was the city that we looked at that had the lowest startup survival rate, with less than one in three (30.7%) new ventures lasting five years or more.
Key
New Startups in 2013 Five Year Survival Five Year Survival Rate
Top 3 Cities
Ranked #1
Bristol
2,570
1,140
44.36%
Ranked #2
Brighton and Hove
1,960
865
44.13%
Ranked #3
Leeds
3,895
1,670
42.88%
The UK’s Best Startup Cities Ranked
The UK’s Best
Startup Regions
Looking more broadly at the picture around the UK, the South West was the region with the highest business survival rate (45.6%). In fact, each of the three regions with the highest survival rate were located in the South, with 44.7% for the East of England and 44.6% for the South East.
On the other hand, Northern and Scottish businesses found it harder to make it past five years, with 41.9% surviving in the North West, 41.7% in Scotland and 41.1% in the North East.
However, London bucks the trend when it comes to the South, with a survival rate of just 39.3%, the lowest of any of the UK’s regions.
Key
New Startups in 2013 Five Year Survival Five Year Survival Rate
Top 3 Regions
Ranked #1
South West
25,640
11,690
45.59%
Ranked #2
East
32,570
14,555
44.69%
Ranked #3
South East
50,895
22,700
44.60%
The UK’s Best Startup Regions Ranked
|
Rank |
Region |
New Startups in 2013 |
Five Year Survival |
Five Year Survival Rate |
|---|---|---|---|---|
| United Kingdom | 146,910 | 281,620 | 42.43% |
Five Year Regional Survival Rate Mapped
1. South West - 45.59%
2. East - 44.69%
3. South East - 44.60%
4. Yorkshire and the Humber - 43.38%
5. Northern Ireland - 43.05%
6. West Midlands - 43.00%
7. East Midlands - 42.59%
8. Wales - 42.05%
9. North West - 41.87%
10. Scotland - 41.72%
11. North East - 41.09%
12. London - 39.35%
London’s Startup
Hotspots
While London as a whole falls below the UK average for startup survivals, certain areas definitely seem to be thriving.
Looking more specifically at the capital, nine boroughs had a higher survival rate than the national average, with Bromley seeing the highest (46.6%).
Of the top ten boroughs with the highest survival rates, just one was found in inner London, which was Hackney, with a five-year survival rate of 43.2%.
Key
New Startups in 2013 Five Year Survival Five Year Survival Rate
Top 3 Cities
Ranked #1
Bromley
2,080
970
46.63%
Ranked #2
Harrow
2,170
980
45.16%
Ranked #3
Hounslow
2,210
980
44.34%
London’s Startup Hotspots Ranked
|
Rank |
Borough |
New Startups in 2013 |
Five Year Survival |
Five Year Survival Rate |
|---|
London’s Five Year Regional Survival Rate Mapped
1. Bromley - 46.63%
2. Harrow - 45.16%
3. Hounslow - 44.34%
4. Kingston upon Thames - 43.88%
5. Sutton - 43.78%
6. Richmond upon Thames - 43.52%
7. Hackney - 42.59%
8. Hillingdon - 43.12%
9. Merton - 42.93%
10. Bexley - 42.16%
11. Brent - 42.15%
12. Kensington and Chelsea - 41.77%
13. Ealing - 41.56%
14. Barnet - 41.15%
14. Camden - 40.98%
14. Hammersmith and Fulham - 40.83%
17. Havering - 40.75%
18. Southwark - 40.75%
19. Wandsworth - 40.57%
20. Redbridge - 40.45%
21. Croydon - 40.35%
22. Haringey - 40.28%
23. City of London - 39.78%
24. Lewisham - 38.63%
25. Westminster - 38.62%
26. Waltham Forest - 37.90%
27. Enfield - 37.67%
28. Greenwich - 37.07%
29. Barking and Dagenham - 36.71%
30. Tower Hamlets - 35.60%
31. Newham - 34.91%
The UK’s Best
Startup Industries
We also looked at which industries have seen the highest survival rate from five years ago.
Some of the industries which saw the highest survival rate over the five year period include drinks manufacturers (53%), residential care (52%) and the creative arts and entertainment industry (52%), as well as the refining of petrol and fuel (100%), although this was something of an outlier due to just five businesses startup up in 2013, all of which have survived.
At the other end of the scale, some of those industries which have struggled include insurance (13%) and clothes manufacturers (30%) as well as various niches within the mining sector.
Key
New Startups in 2013 Five Year Survival Five Year Survival Rate
Top 3 Industries
Ranked #1
Manufacture of coke and
refined petroleum products
5
5
100%
Ranked #2
Activities of membership
organisations
1,230
735
59.76
Ranked #3
Manufacture of beverages
310
165
53.23%
The UK’s Best Startup Industries Ranked
|
Rank |
Industry |
New Startups in 2013 |
Five Year Survival |
Five Year Survival Rate |
|---|---|---|---|---|
| All Industries | 346,275 | 146,910 | 42.43% | |
Sources & Methodology
All data sourced from the latest Business Demography statistics from the Office for National Statistics.
Note that for London, Lambeth and Islington have been excluded as the data for these areas has been highlighted as potentially unreliable due to a high number of businesses registrations at a single postcode, which you can read more about here.
