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Where Is The Best Place To Start A Small Business In The UK In 2020?

Most businesses will have been glad to see the back of 2020, a year of unprecedented uncertainty, stress, disruption and damage.

Thanks to COVID-19, 2020 became a year of new working restrictions and protocols, working from home and video meetings, government grants and bounce-back loans, furloughing staff and making redundancies.

While some businesses perished, others had the resilience to survive. Government money certainly helped many SMEs. Some adapted their existing products and services to find new customers; others tried something completely new, pivoting to keep cash coming in.

All sectors suffered, some much more than others, yet amid the carnage, the lucky few increased their turnovers, capitalising on opportunities the pandemic and lockdown provided. And, record numbers of new businesses were started during lockdown.


How much does location matter? 

In the aftermath of the global financial crash, the number of people classed as self-employed increased dramatically. As we’ve seen this year, tough economic conditions and rising unemployment levels have already led to a surge in people setting up their own business or going freelance. For those starting out, there’s a lots to think about and do – but an interesting area to ponder is how much your geographic location will impact on your success. It is said as many as 1 in 5 businesses fail in their first five years. Are there certain places in the UK where you will be better equipped to handle the many challenges that come with starting and running a business?

Since 2016, we’ve been looking to answer this question by compiling our annual Best Places To Start A Small Business list. This year’s study, released ahead of Small Business Saturday, looked at data from the last financial year, focusing on eight different criteria across the 63 largest towns and cities in the UK to determine where had the best environment for small and medium-sized businesses to succeed. Using data from the Centre for Cities compiled prior to the ongoing Covid-19 (coronavirus) pandemic, the categories include:

  • Annual business start-ups
  • Annual business closures
  • Total business stock
  • Proportion of population with an NVQ level 4 qualification or above
  • Housing affordability
  • Pollution rate
  • Overall employment rate


Brighton returns to the top spot

The seaside resort of Brighton has once again been named Informi’s Best Place To Start A Small Business In The UK. 

Brighton previously won the crown in the annual study in both 2016 and 2018, with Ipswich taking the title in 2017. The 2019 study, which looked at the entire 2010s decade as a whole, saw Reading triumph.

Brighton performed strongly in overall business stock, the number of start-ups over the past year and low pollution levels – appearing in the top three in all three categories. Cambridge rose three places from the 2018 study to come second in this year’s list, followed by Edinburgh which fell one place to third.

“Brighton has a history of having a higher-than-average number of start-ups. In fact micro and small businesses with less than 10 employees make up 97% of all businesses here and are key to the economy.

“Brighton has all the right ingredients for nurturing start-ups including many wonderful new flexible work spaces, two excellent universities and people with the creative and entrepreneurial mindset who are attracted to living in wonderful coastal cities like Brighton.

“2020 has seen many early stage and new businesses join Brighton Chamber. There is excellent support for start-ups in Brighton including Brighton Chamber’s Catch the Wave programme and the Business Hothouse.”

Sarah Springford, CEO at Brighton Chamber


A strong year for seaside locations

Alongside Brighton’s success, it was a strong year for places near the coast with Southampton rising seven places to take fifth in the list and Bournemouth going up 23 places since 2018 to come in seventh. Previous winner Ipswich also performed well, rising by 25 spots on the previous survey to finish in eighth place.

Position Location Changes since 2018
1. Brighton No change
2. Cambridge +3
3. Edinburgh -1
4. Reading +3
5. Southampton +7
6. Northampton -3
7. Bournemouth +23
8. Ipswich +25
9. London -5
10. Worthing +5

*no annual study was undertaken for the 2019 year as Reading was named best place to start a small business across the 2010s decade, followed by Brighton and Northampton. 



For a comprehensive guide to getting your business up and running, download our how to start a business in 20 days eBook.




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