Jump to a section
Entrepreneurship in the UK is evolving as business owners continue to navigate rising costs and changing consumer behaviour. A city’s economic strength, average earnings, and start-up activity can either support a company’s development or limit its ability to expand.
Understanding how these factors differ across the country provides valuable insight into where entrepreneurs have the strongest chance of achieving sustainable growth.
We analysed the UK's 30 most populated cities to identify the locations that offer the most supportive conditions for business expansion. To do this, we looked at five-year business survival rates, GDP per head, and employment rates. We also examined Gross Disposable Household Income (GDHI) and start-up density.
By analysing these metrics together, the data highlights the cities that currently offer the strongest foundations for business growth and identifies the locations where entrepreneurs may face greater challenges.
The best UK cities for business expansion
|
City |
5-Year Business Survival Rate |
Gross domestic product (GDP) per head |
Employment Rate per City |
GDHI per head of population at current basic prices |
Start-ups per 10,000 residents |
|
London |
38.2% |
£69,077 |
74.6% |
£35,361 |
82.1 |
|
Edinburgh |
39.6% |
£69,809 |
82.1% |
£29,109 |
39.7 |
|
Bournemouth |
43.0% |
£37,048 |
77.6% |
£25,259 |
46.7 |
|
Norwich |
40.8% |
£35,182 |
82.7% |
£21,327 |
44.2 |
|
Bristol |
38.9% |
£47,148 |
76.1% |
£24,696 |
45.7 |
|
Swindon |
35.0% |
£57,253 |
80.3% |
£22,214 |
38.1 |
|
Leeds |
41.8% |
£47,411 |
74.7% |
£21,694 |
45.0 |
|
Brighton & Hove |
30.0% |
£47,461 |
75.7% |
£28,857 |
56.7 |
|
Manchester |
33.9% |
£65,591 |
71.4% |
£18,945 |
61.6 |
|
Glasgow |
40.2% |
£50,250 |
71.2% |
£20,006 |
42.4 |
London
London sits in first place overall, driven by its exceptional economic strength and high levels of opportunity. With a GDP per head of £69,077 and the highest disposable income in the dataset at £35,361 per person, the capital offers unmatched financial resilience and spending power. London also has the largest volume of enterprise births, with 74,650 new businesses launched in 2023, equating to 82 start-ups per 10,000 residents. This level of entrepreneurial activity creates a dynamic environment where collaboration, investment and innovation thrive.
Edinburgh
Edinburgh ranks second, supported by strong economic and employment indicators. The city reports the highest GDP per head in the entire dataset at £69,809, combined with an employment rate of 82.1%. This demonstrates a stable labour market and a population with strong financial confidence, both of which contribute to business sustainability. Edinburgh also maintains a solid five-year survival rate of 39.6%, slightly above the UK average of 38.4%, indicating that new ventures have a stronger chance of lasting beyond the early stages of development.
Bournemouth
Bournemouth stands out for having the highest five-year business survival rate in the UK at 43%. This suggests that entrepreneurs operating in the city benefit from supportive infrastructure and steady demand. With an employment rate of 77.6% and 46.7 start-ups per 10,000 residents, Bournemouth offers the right conditions for both stability and growth. Although the city’s GDP per head is lower than locations such as London or Edinburgh at £37,048, its overall balance of strong survival, solid start-up activity and healthy employment makes it one of the most promising environments for founders.
These cities demonstrate how a combination of strong survival rates, robust GDP, healthy employment levels and active entrepreneurial communities creates the right conditions for business growth.
The most challenging UK cities for business growth
While some cities offer strong conditions for expansion, others present more complex environments where economic pressures, weaker demand and lower long-term resilience require entrepreneurs to plan carefully to succeed.
|
City |
5-Year Business Survival Rate |
Gross domestic product (GDP) per head |
Employment Rate per City |
GDHI per head of population at current basic prices |
Number of start-ups (2023) |
|
Leicester |
33.2% |
£30,121 |
65.1% |
£16,067 |
1,850 |
|
Birmingham |
29.7% |
£33,362 |
65.9% |
£18,312 |
6,105 |
|
Liverpool |
27.5% |
£40,392 |
67.5% |
£18,976 |
2,330 |
|
Kingston upon Hull |
35.5% |
£30,522 |
73.2% |
£17,001 |
925 |
|
Wolverhampton |
34.7% |
£26,574 |
70.3% |
£18,174 |
1,300 |
|
Southampton |
26.2% |
£42,580 |
75.9% |
£19,872 |
1,005 |
|
Nottingham |
38.4% |
£42,837 |
66.1% |
£16,823 |
1,305 |
|
Stoke-on-Trent |
36.6% |
£29,631 |
75.0% |
£17,626 |
870 |
|
Bradford |
41.0% |
£23,945 |
69.7% |
£17,784 |
2,330 |
|
Coventry |
34.3% |
£35,719 |
71.9% |
£19,057 |
1,590 |
Leicester
Leicester ranks as the most challenging city in the dataset for business growth, driven by a combination of low earnings, limited spending power, and weaker long-term business resilience. The city records the lowest disposable income in the UK at £16,067, alongside one of the lowest employment rates at 65.1%. Its five-year business survival rate of 33.2% indicates that a significant share of new ventures struggle to remain active beyond the early stages. Although Leicester reports 47.6 start-ups per 10,000 residents, the wider economic conditions are less supportive than those seen in stronger-performing cities.
Birmingham
Birmingham also presents significant challenges. Its five-year survival rate of 29.7% and an employment rate of 65.90%, which is well below the UK average of 76.6%, highlight a weaker economic foundation compared with higher-performing regions. Birmingham’s GDP per head stands at £33,362, and disposable income is £18,312 per person, which signals reduced spending power locally. Despite recording a high number of enterprise births at 6,105 in 2023, the city’s start-up rate of 51.6 per 10,000 residents sits below key competitors such as London and Manchester. This combination of lower survival, lower earnings, and slower employment growth creates an environment where businesses may need to operate with more caution.
Liverpool
Liverpool is another city where entrepreneurs face steeper barriers to long-term success. Its five-year survival rate of 27.5% is among the lowest in the UK, and disposable income sits at £18,976 per person. While Liverpool’s start-up activity is relatively strong, with 45.8 new businesses per 10,000 residents, the city’s GDP per head of £40,392 and employment rate of 67.5% indicate slower economic performance. These conditions make it more difficult for businesses to secure consistent demand.
These cities illustrate the challenges that can arise in areas with weaker economic performance, reduced spending power and lower long-term business resilience. Entrepreneurs operating in these locations often need stronger financial planning, more strategic positioning and a higher level of adaptability to achieve sustained growth.
What UK entrepreneurs looking to expand should expect in 2026
Here at Capital on Tap, we expect 2026 to be a year where measured expansion becomes the priority for many UK business owners. While headline economic indicators show signs of stabilising, the pressures of the past two years continue to shape how founders plan for growth.
Financial management
According to Hugh Acland, CCO at Capital on Tap, this means businesses are approaching expansion with greater financial discipline and clearer strategic intent. “We are seeing business owners scrutinise every outgoing more closely than before. Costs have not returned to pre-inflation levels, which makes clear cash flow management essential.
“Add to this higher wage expectations, rising utility costs, and supplier price adjustments, the costs of running a business continue to reduce already tight margins, meaning we expect that real-time financial tracking and sharper operational oversight will continue to be important. Having access to flexible finance, such as our business credit card, can make the difference between reacting under pressure and responding with confidence. It allows businesses to manage unexpected costs and invest at the right moment.”
Consumer behaviour
Consumer behaviour is also shifting. Hugh explains, “People want confidence and convenience when they spend, and they want a smooth experience from the businesses they choose to support. Small businesses that understand these expectations and adapt quickly will be in a stronger position.”
Technology
“Technology will also shape how businesses scale. AI-driven systems are increasingly accessible for small firms, helping with tasks ranging from invoicing and scheduling to customer communication and financial reporting. AI is not for replacing people. It is about freeing up time so founders can focus on the work that actually drives expansion.”
As Hugh concludes, “The current economic climate may feel challenging, but growth is absolutely achievable. It requires deliberate, informed decisions and the confidence to adjust as conditions change, meaning there are opportunities for founders who understand their numbers and plan carefully.”
Sources and methodology
This ranking was developed using key indicators that influence business resilience and growth potential across UK cities. These include five-year business survival rates, GDP per head, employment levels, enterprise births, start-up density and Gross Disposable Household Income. Each metric was scored numerically and combined to identify the cities offering the strongest and weakest environments for business expansion.
• Population: ONS Explore Local Statistics
• Five-year business survival rates: ONS Business Demography, Table 5
• Employment rate: ONS Explore Local Statistics (Economy section for each city)
• Enterprise births (2023): ONS Business Demography, Table 1.1c
• GDP per head: ONS Regional Gross Domestic Product, Table 7
• Gross Disposable Household Income: ONS Regional GDHI, Table 3
Date of data collection: November 2025.
