In the United Kingdom, there are over 5 million registered businesses. Each year, there are almost half a million new businesses joining the economy. With all these business growth, particularly in London, you are probably curious about where all the office space comes from.
New businesses in London
First of all, let’s see what businesses can survive in this competitive market.
Running a business can be both exciting and daunting. Many people might think that having a good business idea is the key to success. But most often overlook the importance of sustaining a business through planning and organization.
It is not surprising to find that a lot of businesses are unable to sustain themselves. In 2016, only 44.1% of businesses born in 2011 were still in operation.
Although there are a lot of businesses growing, there are also businesses dying at the same time.In general, the growth of new businesses still exceeds the number of declining businesses. Take the year of 2016 as an example. There were 1.08 births of business for every business that were inactive.
The success among different business sectors
Not all new businesses will thrive in the market, and some will be unable to survive.
Among all the new businesses that join the market, a majority of them are in the business administration and support services sector, accounting for 23.1% of the total. There are also many new companies that focus on transportation and storage (23%) and education (19.8%).
Although new companies in business administration and support services are growing, 15.4% of them do not continue to stay in business. Other business industries that have a high death rate include finance and insurance and accommodation and food services.
According to research, those companies who stay in the market and continue to grow are mainly in healthcare, information and communication, as well as property.
Best locations for business
It seems common to believe that having your business located in the central business district is important. Many businesses in the United Kingdom might prefer to stay in London.
In fact, London does not only have the highest birth rates for new businesses, accounting for 17.5%, it also has the highest business death rates.
If you want your business to be successful, you may want to consider establishing your business in the Southwest, Northern Ireland and the Southeast. Businesses in these areas have almost a 50% chance of survival.
Flexible workspace
Many people might think that New York City is taking the lead in terms of flexible workplaces. But Central London is actually the largest flexible workplace market in the world.
About 10.6% of the London businesses are working in a flexible workspace, which is 3 times more than Manhattan.
In the London property market, the fastest growing property occupier is a flexible office provider. There was an impressive 190% increase in leased flexible workspaces in 2017, which further proves the popularity of this new way of running a business.
Some industry experts claim that the trend of coworking is changing the real estate supply in London.
As you may predict, many companies that enjoy flexible workspace are tech companies. In London, the three companies that occupied the largest flexible workspace are Amazon, Google and WeWork.
While the trend of using flexible workspace continues to grow in London, this trend is also spreading to other cities in the United Kingdom, including Birmingham, Bristol and Manchester. Past studies showed that 75% of the flexible workspace in the United Kingdom is not in London.
Every day, there is a new business idea brewing and new companies are joining the market in the United Kingdom. At the same time, how a business is run is also changing. If you are struggling to find affordable office space for your new business, it might be a good idea to follow the trend and embrace a flexible office space. For more interesting statistics, check out our infographic below.
