Don’t go there: The worst cities in the UK to start a business\” />
Where are the worst cities to start a business in? To identify which UK cities and districts offer the ‘worst’ conditions for starting a business, the company BestBrokers analysed the latest data from the UK’s Office for National Statistics.
As to why this matters, recent data shows that half of UK businesses fail to survive past their fifth year. With rising costs and lingering uncertainty, new ventures need every advantage they can get just to stay afloat, let alone grow.
To build the rankings, the firm developed a weighted index based on six equally important factors, adding up to a total score of 100. These include the five-year business survival rate, the number of active companies per 1,000 residents, the share of high-growth firms, export trade value per business, gross value added by each city, and the percentage of properties with access to gigabit Internet.
The worst UK cities and districts to start a business in:
- Birmingham – 29.32 / 100
- Dumfries and Galloway – 30.20 / 100
- Monmouthshire and Newport – 32.03 / 100
- Blackpool – 32.57 / 100
- Walsall – 33.02 / 100
- Perth and Kinross, and Stirling – 33.11 / 100
- Swansea – 33.80 / 100
- Wolverhampton – 34.72 / 100
- Dudley – 34.97 / 100
- Barking & Dagenham and Havering – 35.15 / 100
From these data sets, in Birmingham only a quarter of new companies survive more than five years. The 2023 city council bankruptcy triggered sharp budget cuts, rattling investor confidence. Now, just 0.36% of all businesses in the city are classified as high-growth.
Swansea’s fintech and software scene is growing, with firms like Delio and Veeqo alongside international names such as CGI and Openreach. Yet, despite its role as southwest Wales’ economic centre, Swansea ranks near the bottom with 33.80 points. Low productivity (82.9) and a 29.7% business survival rate weigh heavily on investor confidence.
In contrast, cities and districts across Northern Ireland consistently rank among the UK’s most resilient for business survival, with seven of the top ten located in the region. Despite its largely rural landscape, which covers 80% of the land and houses nearly half the population, Northern Ireland benefits from robust, multi-layered support for start-ups, including programmes like Invest NI and the DAERA Rural Business Development Grant Scheme.
Lisburn and Castlereagh showcase Northern Ireland’s business resilience, boasting the UK’s highest five-year company survival rate at 52.6%. Its success stems from a prime spot along the Dublin-Belfast Economic Corridor, granting access to over 2.2 million people within a 30-minute drive via the M1 motorway. Nearby Fermanagh and Omagh also impress, with a 51.3% survival rate, fuelled by cross-border trade and tourism, benefits that have only strengthened since Brexit.
The Welsh districts of Conwy and Denbighshire follow a similar pattern, with economies rooted in agriculture, tourism, and niche services benefiting from steady demand and loyal customers. Despite their rural character, targeted support from initiatives like the Rural Development Programme for Wales (RDP Wales), providing grants, advice, and development schemes, has strengthened business resilience, helping companies achieve a 51.6% survival rate.
Locations where businesses are most likely to fail
Birmingham sees thousands of startups each year, yet only around 25% survive past five years on its market. While costs are lower than in London, rent and utilities still squeeze new businesses once initial funding runs dry. Earlier this year, J S Wright & Co, a long-standing Birmingham engineering contractor, went into administration under the weight of rising costs, project delays, and debts topping £13.5 million.
Commercial rents in Birmingham are on par with Manchester, where just 28.9% of new businesses survive beyond five years. With nearly 569,000 residents and about 26,000 active companies in 2023, Manchester’s crowded market means fierce competition. Despite a loyal following, Annie’s Restaurant, co-owned by actress Jennie McAlpine and founded in 2012, closed due to rising economic pressures and debts exceeding £300,000 in the city’s hospitality sector.
Liverpool and Swansea rank among the UK’s least resilient cities for startups, with survival rates under 30%. Both face challenges diversifying their post-industrial economies. In January, Lloyds closed its Speke office in Liverpool, affecting 500 staff and raising local concerns. Meanwhile, Swansea’s Enzo’s Homes went into compulsory liquidation in March 2025 amid legal issues and rising construction costs.
