Birmingham sinks: Why this UK city tops the business failure list

Business Survival Rates Across UK Cities
Regional economies, local industry strengths, and access to resources shape the chances of a company continuing to thrive. Recent research highlights the best and worst places in the UK for launching a new venture.
Methodology
- BestBrokers built a weighted index for 69 of the nation’s largest urban areas.
- Six equally critical metrics were assigned equal weight: 5‑year survival rate, active companies per 1,000 residents, share of high‑growth firms, export value per business, gross value added per city, and gigabit‑internet coverage.
- The composite score totals 100 points.
Key Findings
- Only 25 % of Birmingham businesses outlast five years, the lowest rate in the country.
- Manchester follows at 28.9 %, with a crowded market of 26,000 active firms and fierce competition.
- Liverpool sits just behind at 29.4 %.
Operational Costs and Funding Challenges
While Birmingham’s living costs are below London’s, rent and utilities squeeze new firms once initial capital dries. Earlier this year, J S Wright & Co, a long‑standing engineering contractor, entered administration, burdened by rising costs, project delays, and debts exceeding £13.5 million.
Emerging Success Hubs
- Edinburgh emerges as the most favourable city for new businesses.
- Swindon claims the top spot for labour productivity.
- Belfast and Bristol appear in the top 10, each hosting around 0.7 % of high‑growth companies.
- Belfast is rapidly becoming a tech and cybersecurity hotspot, attracting firms like Allstate and Rapid7.
Report Insights
The report identifies major hurdles for new companies across the UK:
- High overheads restrict operational flexibility.
- Limited access to finance hampers early‑stage growth.
- Weak local demand curtails market expansion.
- Inconsistent support for nascent businesses leaves many ventures unprepared.
In bustling hubs such as Birmingham and Manchester, crowded markets and stretched public services can overwhelm even the most promising start‑ups once initial funding dries up.
Launching a new business in locations plagued by low survival rates magnifies risk. Limited funding opportunities, reduced investor interest, and difficulty attracting skilled staff create a vicious cycle of low success rates and weakened local economies. To enhance survival chances in today’s challenging landscape, business owners should aim for lean operations, nurture robust local networks, and prioritise steady, sustainable customer growth over rapid expansion.