Most UK start-ups fail to survive first five years of business

Only four in ten UK-based start-ups survive their first five years in business, according to new research released by Business Comparison.

The data which is backed by the latest Office for National Statistics (ONS) figures, ranked Glasgow among the bottom five UK towns or cities for its start-up survival rate, with 37.5% of new businesses failing to survive through the first five years of trading.

However, Edinburgh and Aberdeen had higher success rates, ranking in the top ten, with 42.1% and 41.9% respectively.

Scotland as a nation ranked at number 10 out of 12, with an overall survival rate of 41.7%, just under the UK-wide average.

The data revealed that an average of 42.4% of UK start-ups founded in 2013 were still in business five years later.

Business Comparison said that the fact that no single city or region posted a business survival rate of 50% or higher highlighted a challenging environment for new businesses. The comparison service highlighted the key issues faced by new businesses including finding a market niche and maintaining a healthy cash flow.

Kerry Fawcett, marketing manager at Business Comparison, 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 are 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% and 41.87% respectively.

“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 that these two Scottish cities take spots in the top ten in our research.”

Business Comparison’s research can be found in full here.

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