Glasgow among worst performers as six in ten UK start-ups fail after five years
Just four in ten UK start-ups survive their first five years in business, with Glasgow among the most difficult cities for early-stage companies, new research suggests.
Glasgow ranked among the bottom five UK towns or cities for its start-up survival rate, with 37.5 per cent of fledgling firms failing to make it through the first five years.
Edinburgh and Aberdeen returned more positive results, ranking in the top ten with 42.1 per cent and 41.9 per cent, respectively.
In terms of regional breakdown, Scotland as a nation came in tenth out of 12, with an overall survival rate of 41.7 per cent, just under the UK-wide average. London came in last place, bucking the trend of generally positive start-up survival data from businesses in the south of England.
The research, released by BusinessComparison.com and backed by the latest Office for National Statistics figures, found an average of 42.4 per cent of British start-ups founded in 2013 were still in business five years later.
The online comparison service said the fact that no single city or region posted a survival rate of 50 per cent or higher pointed to a challenging environment for new businesses.
It highlighted key issues faced by fledgling firms, including finding a market niche and maintaining a healthy cash flow.
'No surprise to see Scottish cities in top ten'
Kerry Fawcett, marketing manager at BusinessComparison, said: “Business start-up survival rates are commonly impacted by the support of the wider business community and opportunities for entrepreneurs to thrive, as well as access to a much-needed talent pool.
“We’re pleased to share that two Scottish cities rank in the top ten across the UK; Edinburgh as the seventh spot and Aberdeen in tenth, with five-year survival rates of 42.12 per cent and 41.87 per cent, respectively.”
She pointed to strong business support and a thriving higher education environment in the two Scottish cities, adding: “In Edinburgh, we see six diverse universities and two in Aberdeen, and, alongside, a wide range of new business support services. It’s no surprise to these two Scottish cities take spots in the top ten in our research.”
Companies with the best chance of surviving to the five-year mark were based in Bristol, where 44.4 per cent were still trading, backed by thriving local industries such as creative media, electronics and aerospace.
Businesses in the south-west of England enjoyed the most positive regional survival rate of 45.6 per cent.