Regardless of how good a business idea might be, starting a new business is always a challenge. Of all the different factors that contribute to the success of a new venture, choosing the right location can make all the difference, so it pays off to research what each place offers. Let’s do that by taking a look at the UK’s top ten cities for business start-ups.

1. London

There are many good reasons to start a business in the UK’s capital city, such as access to a large and diverse talent pool and a catchment population of more than 9 million people.

The city’s highly entrepreneurial spirit and resilient economy are reflected in the fact that London is home to more than 1 million private businesses, the highest number of startups founded in all UK regions. Moreover, 75% of London residents say they would like to start their own business.

Access to capital and potential investors is a key reason why London is considered a global startup hub. The city gets more than 70% of all the country’s VC investment, and there are many incubators and accelerators that suit the needs of a growth-oriented startup community. As a result, in a 2024 report, London ranked 5th in the year’s ranking of the best cities for startups.

Improving its place in the global startup ecosystem, financial support is also available for entrepreneurs with innovative ideas, for example, via the Research and Development tax credits and lower taxes through Patent Box. Other sources of funding activity and support include the Greater London Investment Fund, the London Co-Investment Fund, and different location-specific schemes available from local authorities. 

2. Birmingham

The capital of the West Midlands experienced record high numbers of new company formations in 2023. And in early 2024, business confidence levels were at their highest since 2016, which reflects the dynamic character of this city and its impact on entrepreneurship. Birmingham ranks second in this list, since it has kept the title of UK’s regional startup capital for seven years in a row.

There are approximately 37,000 registered businesses in Birmingham, with the sectors driving the most investment being low carbon, future mobility, advanced manufacturing, and life sciences.

Grants for local SMEs are available through Birmingham City Council, and additional funding can be accessed through the West Midlands SME Grants Programme.

3. Manchester

Manchester is one of the UK’s fastest-growing and most liveable cities, offering easy access to talent, expertise, and business-friendly infrastructure, ranging from nationally renowned coworking spaces and telecommunications to business facilities in Enterprise Zones. 

In 2021, Manchester received the award as the UK’s most entrepreneurial city, having operating business costs 20% lower than in London.

In 2023, the Greater Manchester area led the country in terms of new company formation numbers and was the biggest hub for startup activity outside of London, with approx 1,600 startup businesses raising record levels of investment. 

Eligible businesses can get support from social investment schemes and different business loans.

4. Glasgow

Glasgow enters this list with business growth rates of 7% and the title of best UK city for small businesses in 2022, due to reasons like a short commute, support from local authorities, and notable increases in business numbers.

The city is home to more than 50,000 companies and has a very active startup scene, which is outpacing many UK and European cities and attracting record levels of investment, growing by more than 500% since 2019. 

Subsidies and funding support are available via the city council, which has programmes addressing different sectors and entrepreneur profiles.

5. Bristol

Bristol is a leading business hub for high growth start-ups in the tech and digital industries. The city was recently listed as the best UK city for independent businesses outside of London, and it gets high scores in the quality of local startup programmes and overall quality of life. 

Adding to that is the reasonable cost of office space and good 5-year business survival rates. 

Funding is available to support new businesses in the city’s creative sector.

6. Newcastle

Newcastle stands out in Europe’s startup ecosystem for the quality of its startup programmes, high scores in affordability, availability of reasonably priced office space, and it also has some of the highest 5-year survival rates of major UK cities.

Other important factors like high business turnover and a variety of coworking spaces made Newcastle the best UK city to start a small business in 2024.

What’s more, last year, Newcastle was one of the best European cities to attract foreign investment due to the many funding and financing options available, from meetings with angel investors to accelerators and access to venture funds. 

7. Luton

Luton is already home to nearly 9,000 businesses and plans to continue improving skills development programmes so that local entrepreneurs have access to the best talent. 

The city scores first in the list of best small cities for startups, having increasing business birth rates since 2022 and attracting attention from local and international investors. 

In recent years, Luton made it to the top of the list of best UK cities for entrepreneurs due to its relatively low business closure rates and the cost of office space.

8. Brighton

Brighton is one of the best cities for businesses in the creative and ICT sectors, which have been booming not just over the last decade, but since the 1990s. 

Surveys have revealed the top reasons why the city is a good place for entrepreneurs, ranging from its rich and diverse economy to its proximity to London and reputation as an innovation and creative hotspot. Unsurprisingly, in 2021 Brighton had the UK’s second highest rate of startups per 10,000 people.

9. Reading

In 2024, Reading ranked second in the list of best cities for startups with high scores in metrics like business death and birth rates, 5-year business survival rates, high productivity levels, and average cost of office space.

This reflects the wider trend in Berkshire, since in 2023 the county broke a record number of new businesses. Reading’s best selling point is its proximity to London and the strength of local tech and creative sectors. 

10. Nottingham

Nottingham’s business growth rates have been increasing since 2017, especially in areas like FinTech, creative, and life sciences. 

Other perks of starting a business here include a solid Foreign Direct Investment strategy, a diverse business community that includes everything from small enterprises to multinationals, and the quality of its business centres and office accommodation options.

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