Why Location Matters for Business Success in the UK
The business opportunities in UK cities are vast, but as the old adage goes, ‘location location location’ is key. Location truly matters when it comes to determining the success of a business in the UK. Choose the wrong location for your type of business, and you may find that it struggles to get off the ground. Choose the right location for your operation, and it will give you the chance to thrive. This stands to reason. A business that relies on high volumes of footfall and passing trade needs is more likely to survive in a busy high street or shopping centre than in a remote village in the remote Scottish highlands. Likewise, if you plan to start a logistics business serving the whole of the UK, it might not be wise to set yourself up in Lands End or John O’Groats.
Ultimately, location matters for business success in the UK for several reasons, including:
- Ease of transport connections
- To attract a particular population demographic
- Customer accessibility
- Business costs – some areas are simply much more expensive than others
- Availability of suitable premises, and
- Availability of skilled talent
By taking the time to determine which is the best city to start a business in the UK, you can ensure the success of your business. In this article, we will look at the best cities in the UK to start a business for start-ups, including London, Manchester, and Birmingham.
London: Business Hub with High Competition & Opportunities
London, the capital of England, is a metropolis of around 9 million people that offers boundless business opportunities for foreign entrepreneurs in all sectors. As one of the true global financial hubs of the modern world, along with New York, Beijing, and Tokyo, London has all of the ingredients needed for commercial success, including:
- A world-class transport system with easy connections to the rest of the country and the world
- Ease of access to investment, venture capital, and banking services.
- Availability of incubators, accelerators, and co-working spaces, and
- Events such as London Tech Week provide networking opportunities.
While London is a top-tier destination for many businesses, it is also more expensive, and space is at a premium. For these reasons, many entrepreneurs consider other new and upcoming locations as a base for running their businesses, such as Manchester and Birmingham. In terms of access to talent & workforce availability, London offers access to talent due to the proximity of top educational establishments, including Imperial College London, UCL, and LSE.
Manchester: Affordable & Thriving for Start-ups
Manchester is located in the Northwest of England and has a population of around 600,000. It is only 163 miles away from London and just over 2 hours by train, but it is a more central location within the UK. Being more central means that it offers a perfect location for businesses that need physical access to the wider UK. Another key reason why Manchester is thriving for start-ups is its affordability. It is estimated that housing in Manchester is around 30% more affordable compared to London.
Office prices are also lower in Manchester compared to London, making it more affordable for start-up businesses with staff. In addition, salaries are lower in Manchester than in the nation’s capital. Other reasons to consider Manchester as the location for your business include its:
- Population of over 2.8 million in the Greater Manchester area.
- Booming business ecosystem in the technology, finance, creative media, and advanced manufacturing sectors
- Excellent start-up culture with many well-established incubators and co-working spaces, such as Manchester Science Park, Federation House, and HOST Salford.
- Access to a highly skilled workforce due to the proximity of world-class universities. Manchester typically attracts students and professionals in sectors like technology and engineering.
- Airport – Manchester Airport is the UK’s third busiest, providing global connectivity.
- Excellent train connections, including direct services to London in around two hours.
- Tram and bus networks make commuting easy for employees.
- Status as the second-largest tech hub after London. Manchester is now home to a growing number of fintech, AI, and cybersecurity start-ups.
- Strong support networks, providing funding, mentoring, and business advice.
- Availability of government grants and incentives, especially for tech and innovation-focused businesses.
- Networking events, trade shows, and business conferences
Manchester is part of the ‘Northern Powerhouse’, a government-backed and funded economic initiative that continues to encourage investment and growth in the region. It is expected that as the Northern cities become more established and connected, they will collectively rival London as a place to do business in the UK.
Birmingham: Growing Economy & Cost-Effective Business Environment
Birmingham is a rapidly growing city and business hub located between London and Manchester, and it is an increasing location for start-ups and established companies. With an urban population of 2.6 million and a wider metropolitan population of 4.3, it is now the largest city outside of London. Being in the middle of England, Birmingham offers an unrivalled location in terms of its access to transport, making it an ideal place for businesses reliant on logistical efficiency.
The train journey from London to Birmingham is a mere 1 hour and 20 minutes, and this is expected to reduce further when the High Speed 2 (HS2) railway is completed around 2030.
Cost of Living & Business Expenses in Each City
The cost of living is much lower in Manchester and Birmingham than in London.
London
The average price of a house in London is currently estimated to be around £680,205, while monthly rent is £2,118. Property prices tend to be much higher in central and West London. In terms of commercial office space, rents in London’s City average around £75 per sq ft, and this rises in the West End to around £130 per sq ft. As such, the cost of starting a business in London is typically much higher than other cities, but so are the business opportunities.
Manchester
According to the cost of living comparison website Numbeo:
- The cost of living in Manchester is 30.6% lower than in London (when rent is taken into account)
- Rent prices in Manchester are 47.9% lower than in London
- Restaurant prices in Manchester are 14.0% lower than in London, and
- Groceries prices in Manchester are 2.7% lower than in London
Birmingham
According to the cost of living comparison website Numbeo:
- The cost of Living, Including Rent, in Birmingham is 38.1% lower than in London
- Rent prices in Birmingham are 56.2% lower than in London
- Restaurant prices in Birmingham are 21.1% lower than in London, and
- Groceries prices in Birmingham are 13.6% lower than in London
Business Support & Government Incentives in Each City
The following is a small selection of the many business support services and government incentives in London, Birmingham and Manchester:
| London | Birmingham | Manchester |
| Grow London Local (for small businesses) | West Midlands Combined Authority (WMCA) Business Support | Greater Manchester Combined Authority (GMCA) Business Growth Hub and Support |
| Grow London (for large businesses) | Business Growth West Midlands | Manchester Digital – Innovation Funding & Collaboration for Growth |
| Grow London Global (to access international markets) | Birmingham Enterprise Zone Tax Incentives | |
| London Co-Investment Fund (LCIF) – (Co-investment for tech and science start-ups) |
Industry-Specific Networking by Location
London, Birmingham and Manchester also offer a great deal when it comes to networking and industry-specific support, including:
| London | Birmingham | Manchester |
| Networking London | STEAMhouse (Aston University) – Innovation hub supporting start-ups in tech, digital, and manufacturing. | The Sharp Project – A creative hub for digital media, film, and content creation businesses. |
| Tech London Advocates (TLA) – A network of entrepreneurs, investors, and tech leaders. | The Business Network Birmingham – for senior business leader | Enterprise City – Tech, media & creative cluster in the heart of the UK |
| Silicon Roundabout Meetups – Focused on start-ups and tech innovation. | Business Growth West Midlands – Provides networking events and business mentoring. | Greater Manchester Chamber of Commerce – The largest business network outside London. |
| Financial Services Forum – A leading networking platform for finance and fintech professionals. | Innovation Birmingham – A networking hub for tech and start-up businesses. | Manchester Tech Festival – A key event for start-ups and technology businesses. |
Which City is Best for Your Business Type?
London vs. Manchester vs. Birmingham for start-ups
The best city for your start-up business type will depend on a range of factors, including where your customers are located, your need for ease of transport and logistics, whether you have staff and where they work, and your industry type.
London: London tends to favour businesses in the areas of finance, fintech, international trade, and legal services.
Birmingham: is often the preferred location for manufacturing, logistics, and professional services businesses, and
Manchester: those in the field of tech, digital, media, and creative industries tend to choose Manchester.
Self-Sponsorship Route UK
If you are an international entrepreneur considering setting up a business in the UK, you will also need to consider your immigration options. One of the most popular UK immigration pathways in 2025 is the self-sponsorship route. The self-sponsorship route UK enables foreign entrepreneurs to set up a business presence in this country, which they can then use to sponsor themselves. This requires establishing a business ‘footprint’ in the UK (e.g. renting premises), getting a sponsor licence, and issuing a Certificate of Sponsorship. An immigration law firm in the UK can guide you through this process.
