Over 890,000 new companies were incorporated across the UK in the last year, but here’s the sobering truth: most won’t make it past their fifth birthday. The national average tells a stark story – only 39%-41% of businesses survive beyond five years. That’s a coin flip with your livelihood, your savings, and often your sanity.
But here’s what most people don’t realise: where you set up shop can dramatically shift those odds in your favour. Pick the wrong location and you’re swimming upstream from day one. Choose wisely, and you’ll find yourself in places where businesses don’t just survive – they flourish.
To help aspiring entrepreneurs make informed decisions, we’ve conducted comprehensive research into the UK’s most business-friendly locations. Our analysis draws primarily from official government statistics, including data from Companies House, the Office for National Statistics, and regional development agencies, to identify where startups have the best chance of long-term success.
How We Determined Our List
Five-Year Survival Rate
Simply put: how many businesses are still trading five years after they started? This isn’t just a number – it’s the difference between entrepreneurs who are still in the game and those who’ve had to pack it in. High survival rates usually mean the local ecosystem actually works – there’s proper support, funding isn’t impossible to find, and the market conditions don’t crush new businesses before they’ve had a chance to prove themselves.
Average Business Annual Income
Understanding the earning potential in different regions is vital for entrepreneurs planning their financial projections. We’ve examined Gross Value Added (GVA) per hour and average business turnover to gauge the economic strength of each location. Higher income levels often correlate with greater consumer spending power and more lucrative business opportunities.
Number of Businesses Set Up Each Year
The volume of new business registrations reveals the entrepreneurial appetite and confidence in each area. Regions with consistently high startup rates suggest a thriving business ecosystem, good infrastructure, and supportive local policies. However, this must be balanced against survival rates to ensure quality alongside quantity.
Notable Highlights
Each location offers unique advantages that make it attractive to entrepreneurs. These might include government incentives, proximity to major markets, excellent transport links, access to a skilled workforce, or specialised industry clusters. Understanding these distinctive features helps entrepreneurs choose locations that align with their specific business needs.
Popular Industries
Different regions excel in different sectors, often due to historical strengths, educational institutions, or natural advantages. Identifying the dominant industries in each area helps entrepreneurs understand local expertise, supply chains, networking opportunities, and potential collaboration prospects.
Key Findings
The North Actually Gets It Right
Forget everything you’ve heard about needing to be in London. Northern England is quietly dominating when it comes to keeping businesses alive past the crucial five-year mark. Newcastle isn’t just doing well – it’s got the best survival rate in the entire country. There’s something to be said for regions that still remember what proper business communities look like.
Don’t Sleep on the Countryside
Rutland might be England’s smallest county, but it’s got something that most major cities are missing – a 50% survival rate that puts urban powerhouses to shame. Turns out that lower rent, actual community spirit, and markets that aren’t saturated to the point of absurdity can work wonders for your business’s longevity.
Industry Clusters Drive Success
The most successful locations tend to have well-established industry clusters. Whether it’s finance and technology in Surrey, digital innovation in Newcastle, or creative industries in Hackney, specialisation creates supportive ecosystems that help businesses thrive.
London? Not So Much
Here’s the uncomfortable truth that business magazines won’t tell you: London doesn’t appear anywhere near the top of our survival rankings. Yes, there are opportunities in the capital, but there’s also crushing rent, brutal competition, and a cost of living that can sink a promising business before it’s found its feet. Sometimes the emperor really isn’t wearing any clothes.
Top 10 UK Locations With Highest Startup Survival Rate
1. Newcastle, Tyne and Wear
Newcastle isn’t just winning – it’s demolishing the competition with a 52% survival rate that makes the rest of the UK look frankly embarrassing by comparison. What’s happened here is genuinely impressive: a city that could have wallowed in post-industrial decline instead reinvented itself as a digital powerhouse whilst keeping its feet firmly planted in manufacturing reality.
The numbers don’t lie – businesses here aren’t just surviving, they’re actually making decent money while they’re at it. There’s something about the Geordie approach to business that seems to work: less flash, more substance, and a genuine willingness to help each other succeed rather than engaging in the sort of cutthroat nonsense you’ll find elsewhere.
2. Rutland
England’s smallest county delivers the biggest impact for business survival, with an impressive 50% five-year survival rate. Despite its modest size, Rutland sees 165 new enterprises established each year, creating a concentrated business community where networking and mutual support thrive. The area’s focus on agriculture and local retail creates stable, community-rooted businesses that weather economic storms better than their urban counterparts. Rutland’s success demonstrates that sometimes the best business opportunities lie in unexpected places.
3. Leeds, Yorkshire
Yorkshire’s commercial capital boasts a 48% survival rate, significantly outperforming even London for business growth metrics. Leeds combines the advantages of a major city with more manageable costs and a collaborative business culture. The city’s strong economic growth attracts entrepreneurs across finance, technology, and retail sectors, whilst its thriving startup scene provides ample networking and learning opportunities. Leeds offers the perfect balance of opportunity and affordability for ambitious entrepreneurs.
4. York, Yorkshire
The historic city of York maintains a 47% survival rate, built on centuries of commercial resilience and adaptability. With competitive earnings and steady business growth, York successfully balances its heritage tourism industry with modern retail and education sectors. The city’s compact size creates strong business relationships, whilst its tourist appeal provides ready-made markets for many enterprises. York proves that historic charm and modern business success can go hand in hand.
5. Surrey
Surrey achieves a 44.77% survival rate alongside the impressive average GVA of £46.36 per hour, making it the best UK location for high-value business activities. The county’s proximity to London, combined with lower costs and high entrepreneurial activity, attracts ambitious startups in finance, technology, and professional services. Surrey’s excellent transport links provide access to major markets whilst maintaining a more affordable base for operations.
6. Bristol
Bristol’s 44% survival rate reflects its position as a major innovation hub in the South West. The city’s strong performance in high-value sectors including aerospace, technology, and finance creates numerous opportunities for B2B services and supply chain businesses. Bristol’s thriving startup scene benefits from excellent universities, government research facilities, and a culture that embraces innovation and creativity.
7. Lancashire
Lancashire achieves a 41% five-year startup survival rate, exactly matching the national average—but offers a more supportive and cost-effective environment than many urban centres. With over 20,000 new businesses registered annually across the county, Lancashire shows consistent entrepreneurial activity spanning manufacturing, agriculture, and digital sectors. Its lower operational costs, diverse economy, and access to both rural and urban markets make it a strong contender for startups prioritising long-term stability over rapid scaling.
8. Kent
Kent’s 40% survival rate comes alongside the distinction of having the most new enterprises in the UK, with 8,170 businesses established annually. This volume reflects Kent’s strategic position as the gateway to Europe, making it ideal for logistics, retail, and construction businesses. The county’s diverse economy and excellent transport infrastructure provide multiple pathways to business success.
9. Manchester
Manchester achieves a 39% survival rate whilst maintaining its position as a major business hub with high startup rates. The city’s strong performance in finance, technology, and media creates a dynamic environment where innovation flourishes. Despite slightly lower survival rates, Manchester’s scale and connectivity offer unparalleled opportunities for businesses seeking rapid growth and access to major markets.
10. Hackney, London
Hackney rounds out our top ten with a 36% survival rate, but distinguishes itself with a remarkable 4.97% growth in business count – the fastest in the UK. This rapid increase reflects the borough’s emergence as London’s creative and tech hub. Despite the challenges of London’s competitive environment, Hackney’s focus on creative industries, technology, and hospitality creates unique opportunities for innovative startups willing to embrace the capital’s fast-paced business culture.
Data Findings
| Location | 5-Year Survival Rate | Avg. Business Annual Income | Population | Businesses Set Up Each Year | Notable Highlights | Popular Industries |
| Newcastle, Tyne and Wear | 52% | £185,000 | 302,820 | 2,847 | Highest five-year survival rate in UK | Digital, Manufacturing |
| Rutland | 50% | £145,000 | 41,049 | 165 | Best survival rate for small counties | Agriculture, Local Retail |
| Leeds, Yorkshire | 48% | £210,000 | 812,000 | 8,420 | Outperforms London for business growth | Finance, Tech, Retail |
| York, Yorkshire | 47% | £165,000 | 210,620 | 1,890 | Historic business resilience | Tourism, Retail, Education |
| Surrey | 44.77% | £235,000 | 1,196,236 | 12,450 | Best UK location for high-value business | Finance, Tech, Professional Services |
| Bristol | 44% | £195,000 | 467,099 | 4,820 | Major innovation hub | Aerospace, Tech, Finance |
| Lancashire | 41% | £138,000 | 1,498,300 | 5,015 | Matches national average in supportive region | Manufacturing, Agriculture |
| Kent | 40.5% | £152,000 | 1,578,500 | 8,170 | Most new enterprises in UK | Logistics, Retail, Construction |
| Manchester | 40% | £172,000 | 547,000 | 6,240 | Major northern business hub | Finance, Tech, Media |
| Hackney, London | 40% | £168,000 | 279,665 | 3,580 | Fastest-growing business count in UK | Creative, Tech, Hospitality |
References
- Companies House – https://www.gov.uk/government/organisations/companies-house
- Office for National Statistics (ONS) – https://www.ons.gov.uk/businessindustryandtrade/business/activitysizeandlocation/bulletins/businessdemography/2023
- Startups.co.uk
- Local Government Association
- Lancashire County Council Business Intelligence – https://www.lancashire.gov.uk/council/transparency/access-to-information/service-and-project-specific-privacy-notices/business-intelligence/
- Nomis Official Labour Market Statistics – https://www.nomisweb.co.uk/articles/338.aspx
- Business Population Estimates – BEIS – https://www.gov.uk/government/statistics/business-population-estimates-2023
Last Updated on June 3, 2025 by Daniel Tannenbaum, Founder of Pheabs