We analysed population to startup ratio across the country to discover which cities had the biggest rise in entrepreneurs in the last 12 months.
The first three quarters of last year saw 631,029 new businesses launched countrywide. That’s a substantial 15% increase on the year before at 540,962 – an additional 90,000 businesses registered.
Early-stage entrepreneurship has been steadily growing in the UK since the pandemic, with economic recovery seeing more people starting new business ventures to combat uncertainty and become their own boss, create jobs and follow lifelong dreams.
The latest cost of living crisis has also become a catalyst for entrepreneurship, with more people than ever before looking to supplement their income with a new venture or side hustle – research shows a third of UK adults are planning to start a business in 2023.
Entrepreneurial hotspots
Where are these hotbeds of innovation? We analysed the latest Companies House data and overlaid it with population data in the UK’s largest cities to see which location has the strongest Entrepreneurial Index.
City | % Increase in businesses launched 2022 vs 2021 | Entrepreneurial Index |
---|---|---|
City | ||
Coventry | 13% | 79 |
Birmingham | 9% | 79 |
Leeds | 7% | 105 |
Leicester | 4% | 62 |
Stoke-on-Trent | 4% | 127 |
Liverpool | 1% | 74 |
Manchester | 0% | 38 |
London | 0% | 55 |
Southampton | 0% | 93 |
Newcastle upon Tyne | -2% | 312 |
Glasgow | -4% | 78 |
Nottingham | -5% | 61 |
Edinburgh | -6% | 127 |
Bristol | -6% | 77 |
Sheffield | -8% | 137 |
Cardiff | -11% | 95 |
Coventry comes out on top as the UK’s Most Entrepreneurial City, with a 13% increase in the number of businesses registered in 2022, meaning one company was registered per every 79 people living in the city. The most popular sectors in Coventry include freight transport by road, construction, real estate, and ecommerce.
As one of the most popular locations for setting up a business in the UK, Coventry boasts affordable commercial space and a large talent pool. An average trip to London is just over an hour, and the city has good support systems in place to help entrepreneurs thrive.
Birmingham follows Coventry, with an Entrepreneurial Index of 79, with the city seeing a 9% rise in new business registrations in 2022.
This streak puts the West Midlands in the spotlight, with record business growth in the last 12-months. Last year, research showed a surge in hiring among tech startups in the West Midlands, with the area being named the UK’s fastest growing tech hub the year before.
No Change in London
London has one of the strongest startup ecosystems in the world and launched the highest number of businesses last year, at 164,808. However, when it comes to business growth year-on-year and startup to population ratio, London is outranked by Leeds, Leicester, Stoke-on-Trent, Liverpool and Manchester.
This could be because high costs in the city are causing would-be business owners to look outside the capital.
Top Three Industries of 2022
Looking at the total companies registered across the UK last year, three industries dominate with the biggest increase.
Company Type | % Growth in companies registered in this sector 2022 | What is it |
---|---|---|
Other retail sale not in stores, stalls or markets | 33% | Retail trade not in stores. Includes retail sales over the internet, mail order and through vending machines. |
Construction of domestic buildings | 26% | Development of residential real estate. |
Hairdressing and other beauty treatment | 16% | Beauty and barber shops that offer washing trimming, dying and similar activities. |
Most Entrepreneurial Age Group
The highest proportion of new business owners is between 31-40, followed by over 50’s.
Although more first-time business owners fell into older age brackets in the 12-months, there is a strong entrepreneurial spirit among the UK’s under-30’s. Around 74,989 businesses were registered by people aged between 18-30 last year.
Looking at the gender split, 67% of all businesses registered were by men, against 27% by women (with 6% unknown).
Thinking of Starting Your Own Business?
Here’s a few things to think about:
- Market research: Identify a gap in the market and research your target audience.
- Business plan: Develop a clear and comprehensive plan for your business, including goals, budget, and strategies.
- Legal structure: Choose the best legal structure for your business, such as sole trader, partnership, or limited company.
- Funding: Determine the funding you need and explore your options, such as loans, grants, and investment.
- Taxation: Understand the UK tax system and register for the appropriate taxes, such as VAT and corporation tax.
- Regulations: Familiarise yourself with relevant regulations and compliance requirements, such as health and safety and data protection.
- Location: Choose a suitable location for your business, considering factors such as accessibility, office space rent, and competition.
- Marketing: Develop a marketing strategy to reach and engage your target audience, such as online advertising, social media, and public relations.
Discover affordable office space across the country with Instant Offices.
Method:
We built a tool to analyse Companies House data and uncover how many new businesses were launched in some of the UK’s top cities between 2022 and 2021. This was overlaid with population data to discover which cities had the highest new business to population ratio – which determines Entrepreneurial Index.
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