Revealed: best locations in the UK to launch a small businesses

Ceredigion in the west of Wales and Selby in North Yorkshire are the two places where small and medium enterprises (SMEs) are most likely to succeed, according to new data.

Interestingly, no London local authorities ranked in the top 10, while many smaller local authorities thrived.

The research, conducted by business finance provider Qardus, analysed data from the Office for National Statistics to determine where SMEs are thriving and where they are struggling.

The analysis was based on six different factors, including: The Active Enterprise Change between 2021-2023, the change in the count of births of new enterprises 2020-2022, the change in the count of deaths of new enterprises 2020-2022, the change of high growth enterprises per 1,000, and the survival rate of SMEs across three to five years.   

Each metric had a weighting for how much it contributes to the final score, the score was then scaled to a maximum of 100 using the weightings provided.

Local authorities were then ranked based on their overall score out of 100, with the lowest scores indicating the best conditions for opening a business.

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Ceredigion is the local authority where SMEs such as beauty salons are thriving the most.

The area in the west of Wales recorded a score of 29.03 out of 100, with the three and five-year survival rates recorded at 67.44% and 55.81% respectively. 

Selby in North Yorkshire (29.15 out of 100), South Staffordshire (29.31 out of 100), South Hams in Devon (29.74 out of 100) and South Derbyshire (29.95 out of 100) all also recorded scores of under 30 and rank among the areas where SMEs are thriving. 

Locations where SMEs are struggling

On the other end of the scale, Bromsgrove in Worcestershire is the local authority where SMEs are struggling the most with a score of 80.75 out of 100.

Bromsgrove recorded a -30.22% drop in SME enterprises being registered between 2021 and 2023 – the biggest drop of any local authority.

There was a 5.81% survival rate of SMEs in Bromsgrove recorded in the last five years too, contributing to Bromsgrove’s ranking in the study.

Rochdale in Greater Manchester ranked second for where SMEs are struggling the most with a score of 69.75 out of 100.

The town scored particularly low when it came to the growth of existing SMEs in the area, with just 1.91 SMEs per 1,000 growing.  

Hassan Daher, founder of Qardus, commented, “The findings of this study ultimately indicates that some local authorities are better equipped to host new SMEs than others.

“What is interesting to note is that no London-based local authority ranked in the top ten, suggesting that it is difficult for SMEs to start out successfully in the capital.”