The UK’s cheapest areas to start a business revealed
13th September 2016 | News
The cheapest places to start up a business in the UK have been revealed following new research from enterprise finance provider, LDF.
Newcastle upon Tyne was listed as the cheapest place in the country to set up a new business, costing an average of £17,008, followed by Southampton, (£17,965), Liverpool (£18,880), Cardiff, (£19,569), Leeds (£20,755), Sheffield (£21,490) and Edinburgh (£22,990).
The report was based on a survey of 850 small businesses across the country, which found that the average amount required to start a business in the UK is now £27,520.
At the other end of the spectrum, the areas with the highest start-up costs for new businesses, according to LDF, are Manchester (£44,733), Glasgow (£41,936), Norwich (£39,910), Brighton (£30,901), Bristol (£30,895), Birmingham (£30,817) and Plymouth (£29,784).
London ranked as the eighth cheapest place to set up a business with the average start-up cost totalling £28,742 – still more than £10,000 higher than entrepreneurs in Newcastle have to pay to launch their business.
The survey also pinpointed specific sectors that require more start-up funds than others to successfully launch a business.
For instance, a leisure business requires £79,137 on average, while motoring start-ups cost an average of £64,948 to get off the ground.
This is significantly higher than sectors such as marketing, communications and design businesses where start-up costs were less than £7,000 on average.
A third of SMEs who responded to LDF’s report said that start-up funding was the biggest challenge they faced in setting up a business. More than two-fifths (42 per cent) of firms had used their own savings, while 24 per cent had sought financial assistance from friends and family.
Once they had set up their business, the average amount borrowed in a 12-month timeframe by respondents was £75,408, according to LDF. The main reasons cited for borrowing funds were buying essential equipment (40 per cent) and funding business expansion (38 per cent).