Start-Up Affordability Costs

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.

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.

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.

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.

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.

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.

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.

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.

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.