Start-Up Affordability Costs

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    Guide Author

    James Longley

    Managing Director

    min read
    Last Updated September 26, 2022
    Start up affordability

    There are a number of careful decisions you need to make when starting up your own business, and one thing that can help you is finding the best location. Where you decide to start your business can have an effect on your expenditures, customers, and the employees you hire.

    As a business energy supplier, we know a thing or two about the expenses that a new business has to make. That’s why, here at Utility Bidder, we’ve looked at some of the best places to start a business, looking at factors such as population, active business population, and business survival rate. We’ve also looked at the average monthly pay, and the number of local universities to discover the best place for you to set up shop.

    We have also looked at some of the common first-year expenditures, as well as office prices to help you make that decision.

    The Best Place to Start a Business in the UK

    We’ve looked at the business survival rate, the active business population, the cost of rent for a one-bed apartment, population, monthly pay, local universities, the percentage of the population with an NVQ of level 4 or above, and the availability of full fibre broadband to reveal the best place to start your own business.

    Place place to start a business in the UK

    1.Cardiff – 7.49/10 start-up score

    Cardiff takes the crown as the best place to start a business, with a 7.7/10 start-up score. Cardiff has one of the lowest monthly broadband costs, as well as three local universities. Although the Welsh capital doesn’t rank the best for any of our categories, Cardiff ranks consistently high across the board, making it a perfect middle ground.

    2. Sheffield – 7.35/10 start-up score

    Sheffield takes second place with a start-up score of 7.35/10. Sheffield is a great place to start a business with a high business survival rate of 41.1% as well as two local universities, the University of Sheffield and Sheffield Hallam University.

    3. Manchester – 7.11/10 start-up score

    Manchester completes our top three with a start-up score of 7.11 out of 10. Manchester has one of the lowest broadband costs per month, at £26.84. Manchester also has a high percentage of its population with an NVQ of level 4 or higher, which is no surprise considering it has three local universities.

    City pollution across the world

    Cheapest Places to Rent an Office Outside of London

    We’ve looked at the cheapest places to rent an office in the UK, so you can find the best place to save some money.

    rent outside of london

    1. Liverpool – £21.50 average office rent per square foot

    Liverpool takes top spot with the cheapest office rent per square foot, at just £21.50. Renting an office in Liverpool could be as cheap as just £18, and as much as £25.

    2. Newcastle – £22 average office rent per square foot

    Newcastle takes second place with an average office rental cost of £22 per square foot. Newcastle could be as cheap as Liverpool, however, the maximum cost is £26, just £1 more than in Merseyside.

    3. Leeds – £29 average office rent per square foot

    Our best-ranked city to start a business also competes in our top three of the cheapest offices in the UK. Leeds has an average office rent of £29 per square foot, with a minimum cost of £25, and a maximum cost of £33.

    Cheapest Places to Rent an Office in London

    As expensive as London is, it presents a number of opportunities for a new business. Its huge population can mean more customers and, therefore, more revenue. If London is too tempting for you, we’ve looked at the cheapest places in London. If you want to see the most expensive places in and outside of London, check out our report on Business Bills of the Future.

    cheapest to rent in london

    1. Battersea & Nine Elms – £31 average office rent

    Two places share the top spot with an average office rent of £31. Rent for an office in Battersea and Nine Elms, located in Wandsworth, could cost anywhere between £20 and £40 across grade A and grade B offices.

    2. Hackney & London Fields – £34 average office rent

    Two places occupy a position in the top three again, this time with Hackney and London Fields both taking second place with an average office rent of £34. Across grade A and grade B places, rent could cost anywhere between £25 and £42.50 per square foot.

    3. Stratford – £38 average office rent

    Stratford completes our top three with an average office rent of £38. Renting an office in this area in Newham can cost anywhere between £30 and £45 across grade A and grade B office spaces.

    First-Year Expenditures

    Expenditures during a business’s first year could cost you on average £22,756. We’ve broken this figure down so you can see which costs make up the most of this total.

    First year expenditures

    1. Legal costs – £6,259

    Legal costs are the most expensive expenditure in a business’s first year, with an average cost of £6,259. Legal costs are important for advice, and potentially representation if there is ever a dispute between you and a customer or client.

    2. Company formation – £5,518

    Company formation costs are the second highest fee during a business’s first year, costing £5,518. This includes registering your business as a limited company.

    3. HR – £4,518

    Human resources costs complete our top three with an average cost of £4,518. HR is an important part of every business and can help develop the culture of the company. They also play a key part in keeping the employees happy and helping them develop in their roles.

    Methodology

    We’ve used the Office for National Statistics for the business survival rate and count of active enterprises. Figures show data from the 2021 Calendar Year.

    Our net monthly pay and broadband cost figures came Numbeo

    The figures for the percentage of the population with an NVQ of level 4 or above were from Nomis

    We then used this data to create a normalised score out of 10 for each category which we then averaged to get our start-up score to determine which location was the best to start a business in.

    For our cheapest office spaces, we’ve used Oktra for both London and outside London.

    Finally, we used Tide to reveal the first-year expenditures for businesses.

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    ? What does this mean?
    To get your quotes at lightening speed we need several key pieces of information which can all be found on your electricity bill. But by simply ticking this box, we can search ‘industry held data’ to get your meter number, electricity consumption and current energy supplier. This means that we can get you quick quotes without asking you to dig out all of your paperwork. This is personal data therefore we need you to allow us to access this information.
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