Best and worst UK areas for roaring business – does your town make the list?
It has been a hard time for small to medium enterprises (SMEs) lately; with rising energy costs, tax changes and political instability ahead of the next general election. SMEs account for 99.9% of the UKs business population and they are on the rise. There were 5.6 million small businesses at the start of 2023 - which means the private sector business population increased by 46,000 businesses on the previous year.
Between 2022 and 2023 the number of private sector businesses increased by 95,000 in England and by 300 in Wales, whilst numbers decreased in both Scotland and Northern Ireland, according to the Federation of Self Employed & Small Businesses.
In England London and the South East had the most private sector businesses, accounting for 34% of the UK business population, while the North East had the fewest.
But where is the best place to open a small business in 2024? Analysis by Qardus looked at government data on SMEs to find out where they are thriving and where small business are struggling.
Researchers looked at factors like how many new businesses were established vs how many had collapsed as well as how many SMEs survived beyond their first few years. The data was broken down by local authority with each area given a score out of 100, where the lower the score, the more successful the area is deemed.
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Selby in York North Yorkshire (Getty Images/iStockphoto)The UK areas where small businesses are the most successful
1. Ceredigion - Score: 29.03
Business in this beautiful West Wales county is booming, according to the analysis, which showed both three and five-year survival rates were recorded at 67.44% and 55.81% respectively, higher than the average UK rate. There was also an 18.42% growth in SMEs between 2020 and 2022.
2. Selby - Score: 29.15
The North Yorkshire market town ranked second for where small and medium businesses are the most successful with a score of 29.15 out of 100. Selby scored particularly high when it came to the three year survival rate of small businesses in the area with almost three quarters (72.57%) of SMEs passing the three-year mark.
3. South Staffordshire - Score: 29.31
Small businesses in South Staffordshire grew by a third (32.94%) between 2020 and 2022 whilst the survival rates of small businesses also ranked highly with 65.38% of businesses surviving over three years.
4. South Hams - Score 29.74
Ranked just below South Staffordshire with a score of 29.74 out of 100 South Hams comes in fourth. Based in the south of Devon, the area sees 68.24% of small to medium businesses surviving over three years as well as a growth of 5.31 businesses registering per 1,000 in the area.
5. South Derbyshire - Score 29.95
Ranked fifth for where SMEs are thriving the most in the UK. The borough recorded a high score of 29.95 out 100. When broken down into the factors analysed, South Derbyshire saw a growth of 12.91% in businesses between 2021 and 2023 as well as 20.27% of small to medium businesses in the area growing substantially in size.
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The UK areas where small businesses are struggling the most
1. Bromsgrove - Score 80.75
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 SME’s in Bromsgrove recorded in the last five years too, contributing to Bromsgrove’s ranking in the study.
2. Rochdale - Score 69.75
The town in Greater Manchester ranked second for where SMEs are struggling the most with a score of 69.75 out of 100. The Greater Manchester town scored particularly low when it came to the growth of existing SME’s in the area, with just 1.91 SME’s per 1,000 growing.
3. Worcestershire - Score 66.12
Worcestershire ranked third with a score of 66.12 out of 100. There was a 26.58% decrease in registered SME’s in the area between 2020 and 2022, as well as just under a fifth of SME’s surviving for more than five years in Worcestershire.
4. Bury - Score 64.56
Bury ranked just below Worcestershire in fourth with a score of 64.56 out of 100. The Greater Manchester borough has an alarming five-year survival rate at 14.52%, contributing to its low overall ranking.
5. Rossendale - Score 64.37
Rossendale in Lancashire ranked fifth for where SMEs are struggling the most in the UK. The Lancashire borough recorded a low score of 64.37 out 100. When broken down into the factors analysed, between 2021 and 2023, there was a decrease of 6.3% in registered businesses in the area, likely due to the high business ‘death rate’ of 70.21%, wherein just over seven in ten SME’s in Rossendale have ceased operating between 2020 and 2022.
Hassan Daher, the founder of Qardus, commented the following: “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.”
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