Starting a new business is a big decision and there are a lot of aspects that need to be considered before going ahead. Developing an understanding of the market, learning about the consumer’s needs, drafting a business plan, projected results to keep you on-track, perfect location, knowing your odds, etc. are quite important to ensure that your new business becomes financially viable.
The five-year mark can be considered to be a very critical milestone for a new business as recent studies show that about half of the new businesses fold within 5 years of starting in the UK. Did this information surprise you? Well, every entrepreneur is optimistic about the growth of their business and dream to take it to the biggest heights and redefine their industry by disrupting the status quo. Entrepreneurs are known to be quite driven and are known to work relentlessly until they succeed and a smart one understands the importance of finding a conducive environment to thrive.
For instance, if you are considering to start a business in Scotland, take the three major cities of Aberdeen, Edinburgh, and Glasgow. Of these cities, although it has a significantly lower number of active businesses, the city of Aberdeen ranks highest in terms of 5-year survival rate.
The goal is to find a place with an abundance of relevant resources to help the new businesses grow. Learning about the metrics to look for in a city and determining which city is providing the most promising environment is what all entrepreneurs must do. Conducting an extensive research considering startup density, survival rate, and an increase in business activity can be really helpful. One can start with basic metrics such as total active businesses in a city, then check the new enterprises that have recently started up, and the businesses that have closed down. For instance, if you are considering to start a business in Scotland, take the three major cities of Aberdeen, Edinburgh, and Glasgow. Of these cities, although it has a significantly lower number of active businesses, the city of Aberdeen ranks highest in terms of 5-year survival rate. Such comparative analysis can help you crunch numbers to make wiser decisions. London tops the list of cities in the UK with 310,815 active businesses and with almost no competition in this metric.
The next set of metrics to look for can be the ease at which a business loan can be obtained, office-space affordability, living expenses, the availability of relevant workforce needed, etc. Being an international hub for businesses, job seekers, infrastructure, and more, you might not face any challenges in terms of availability of resources but at the same time, the real estate prices might be overwhelming. Such a study would also allow an entrepreneur to take a look at the factors that indicate a potentially stronger environment for his businesses and gauge it considering affordability.
It is important to understand that once a business is started, moving the business to another city can be quite difficult considering the initial investment made and basic logistics. So, conducting your own research to find a city that can offer you the best opportunity to thrive is quite critical to its success. Check out this infographic from Total Processing to get a grasp of business survival rate in major cities across the UK.
