According to a survey carried out by Cloud accounting company Ember, a Cumbrian town has been named the worst place to start a new business in the UK.
Barrow-in-Furness is the only town in the survey where none of its businesses registered as high growth enterprises. This status is assessed by the company’s average growth and whether it has a greater than 20% per annum over a three year period.
The study analysed more than 350 districts, counties and unitary authorities across Britain to see which towns and cities have economic evidence for being difficult to grow a new business. This includes the region’s GDP growth and the area’s median weekly salary.
Although Barrow-in-Furness was known for being the biggest iron and steel centre in the world during the 19th century, it has seen a decline in prosperity in recent years. Half of the communities in Barrow-in-Furness are amongst the 3% most deprived nationally. The town also has the poorest health rates in Cumbria.
Barrow-in-Furness isn’t the only place in Cumbria that isn’t known for its successful start-ups. Copeland ranks second to last on the list of unlucky places to start a new business. This is primarily due to the town having the second-highest median salary in the survey at £950 per week. New companies can struggle to pay their employees at a higher rate, dramatically reducing their profit and, therefore, lifespan.
Copeland had the third-highest median salary of the UK in 2018, only being beaten by the City of London and the Tower Hamlets. This high average salary meant that companies in Copeland are expected to pay their employees more, which can significantly impact a fledgling business.
The survey compared all of the towns and cities via the same eight evaluative factors. This includes the average rate of new business births compared to new business deaths and the number of high growth enterprises. The location’s median salary and qualification levels of the working-age population are also compared to give a complete picture of the town or cities financial and economic status.
Commenting on the study, Ember co-founder Daniel Hogan said: “There are so many factors that go into building a successful business, so it’s intriguing to crunch the numbers and see which areas perform best across multiple metrics. Any person who decides to start their own business deserves the best chance of success.”
Coming in third place is the Shetland Islands in the northernmost part of Scotland. It’s one of the worst places to start a business in the UK, mainly due to its location off the mainland and, therefore, the added difficulty of networking. The islands can also be impacted by bad weather and conditions, resulting in delays in transport and postal services.
In 2019, the Shetland Islands had a ratio of only two new businesses being started for every three that failed. This high business death rate compared to the formation of companies means that the prospects of a new start-up are relatively poor.
In this study, statistics have shown that Cumbria and Scotland are the two regions that have one of the worst rates for a new business. The four lowest ranking cities and towns to start a new business are all in Cumbria and Scotland, whilst Ribble Valley took the fifth spot in Lancashire.
All of the cities and towns in Ember’s study were judged on a 10-point scale, with 10 being the best possible score. Factors that influenced the score include the number of businesses in the area with a turnover of £1 million or more and the number of companies in the area with more than 10 employees.
The worst places in Britain to start a business
| National rank | Area | County/Region | Overall rating |
| 382 | Ribble Valley | Lancashire | 6.832 |
| 383 | Na h-Eileanan Siar (Outer Hebrides) | Scotland | 6.594 |
| 384 | Shetland Islands | Scotland | 6.429 |
| 385 | Copeland | Cumbria | 6.168 |
| 386 | Barrow-in-Furness | Cumbria | 5.867 |
What is the best place in the UK to start a business?
On the other end of the scale is the Midlands, which has three of the top five locations to start a new business. Redditch and Wyre Forest are located in Worcestershire and hold the top two rankings as the best places in the UK to start a business. Kingston upon Hull in East Yorkshire was placed as the third best place for business entrepreneurs and having a median wage lower than much of the UK.
Redditch has the second-highest ratio in the UK of business births to deaths. For every new business that failed in the area, two new enterprises were started. It also has a low median salary, which means companies have access to a low-cost workforce.
The best rate of new business births compared to deaths in the UK can be found in Wyre Forest. In this Worcestershire town, three new companies started for every one that failed. This leads to booming business growth and a blossoming economy.
Certain boroughs in London (such as Islington and Hackney) and other cities like Birmingham were excluded from the research survey due to there being more than 500 businesses at a single postcode. This would have distorted the overall results as it drastically impacts local business birth and death rates.
The best places in Britain to start a business
| National rank | Area | County/Region | Overall rating |
| 1 | Redditch | Worcestershire | 8.145 |
| 2 | Wyre Forest | Worcestershire | 8.020 |
| 3 | Kingston upon Hull | East Yorkshire | 7.854 |
| 4 | Corby | Northamptonshire | 7.849 |
| 5 | Telford and Wrekin | Shropshire | 7.834 |
| 6 | Burnley | Lancashire | 7.796 |
| 7 | Kensington and Chelsea | London | 7.779 |
| 8 | Thanet | Kent | 7.774 |
| 9 | Southwark | London | 7.770 |
| 10 | Westminster | London | 7.770 |
The results from the survey show a clear North-South divide. The worst places to start a business are all based in Northern England and Scotland, whilst the best places are predominately in the Midlands and South.
Northern towns and cities lost a large chunk of their industrial and manufacturing industries during the latter half of the 20th century. This set a precedent for the following decades as the wealth gap widened between the business hub of London and other southern areas versus the less prosperous communities further north.
The closure of many steel factories and coal mines has had a long-lasting impact on Northern industries and has resulted in poorer foundations for new start-up businesses. Southern locations didn’t suffer the same effects and are generally considered more wealthy than regions further North.
Despite the financial ramifications of the COVID-19 pandemic, 211,368 companies got incorporated from January to March in 2021. This equates to nearly 100 new businesses being created every hour.
Growing industries such as e-commerce are the most common type of new business, with more than 26,000 companies registering as online retailers. This trend has continued to grow in recent years as customers realise the convenience of ordering products online. The second most popular type of new business is management consultancies, with around 14,000 new companies registering under this category.
Around 2.5 million businesses have formed in the past 20 years, a 72% increase from the year 2000. The rate of business births has seen a slight rise in recent years, although the death rate has also risen. London has both the highest birth and death rate for businesses, with the figures in 2019 showing that around 15.7% of companies were incorporated, whereas 13.1% of companies ceased trading.
