The CFE business startup index
For the past six years, the Centre for Entrepreneurs’ annual analysis of Companies House data has provided a detailed snapshot of business formations across the UK. Featured in the Sunday Times in early January, the Centre’s mapping of business formations to local authorities allows policy-makers, journalists and others to gauge the state of entrepreneurial activity across the UK.
The figures have revealed an upsurge in business formation since 2014. The latest Companies House data, as analysed by the Centre, was published on 12 January and shows that business formations reached a new record of 681,704 in 2019.
For the latest index, CFE was able to analyse industry classification codes that describe the nature of each business. Companies were launched in over 700 different industries, as varied as raising of llamas and alpacas (10 new businesses), credit bureaus (23), driving schools (429) and repair of watches and jewelry (141).
Over 45,000 tech startups were launched across the UK in 2019, representing 6.6% of all new businesses. 17,401 of these were registered in London (8.2% of total), while tech startups comprised 28% of all new businesses launched in Bournemouth, Poole and Christchurch. Tech startups were also highly represented in Brighton and Hove (15%), Winchester (12.8%) and Cambridge (12.5%).
As evidence of the impact that food delivery startups and street food are having, 14,363 new take-away food shops and mobile food stands registered in 2019, greatly outnumbering both licensed restaurants (9,405) and unlicensed restaurants and cafes (7,182). Ten new wine producers, 314 brewing companies, and 347 distillery businesses also launched in the year.
London continues to dominate; business formations increased by 2.4% to 221,373. While Birmingham continues to outperform Manchester in absolute terms (14,509 vs 9,064), the latter is more entrepreneurial when considering population size. This is not the case in Scotland, where Glasgow retains an absolute and per capita lead against Edinburgh.
Formation agents and virtual offices continue to distort London and other inner-city locations; Companies Made Simple provided registered office services in Hackney to circa 16,000 new businesses last year, with 1st Formations behind circa 12,900 formations in Camden. Meanwhile, contractor accounting firms influence numbers in several towns; Quickstep Contracting Services is behind circa 4,000 of the total 5,522 businesses launched in Bromsgrove last year.
The Centre has identified the likely source behind the 200 most-used postcodes, at which over 111,245 new businesses were registered last year. The Centre estimates that over 70,000 founders have made use of company formation agents, business centres or virtual offices, while another 14,500 new businesses have been formed by contractor accounting firms – providing payroll solutions to professional contractors. Contractor accounting firms are the most likely to distort local formation figures as they provide services to individuals across the UK. Central London boroughs and other major cities are also highly distorted by virtual addresses and formation agents.
London continues to dominate; business formations increased by 2.4% to 221,373 in 2019. While Birmingham continues to outperform Manchester in absolute terms (14,509 vs 9,064), the latter is more entrepreneurial when considering population size. This is not the case in Scotland where Glasgow retains an absolute and per capita lead against Edinburgh (6,733 vs 5,155).
Strong figures relative to population size in Cheshire East, Salford, Trafford and Stockport also set the North West ahead of its Northern Powerhouse counterparts, leaving the North East and Northern Ireland alongside Wales, Scotland and the South West as the five least entrepreneurial areas of the country.