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The Love Energy Savings Business Price Index Guide

Introduction

Becoming self-employed and starting your own business from scratch is a dream many of us have, unfortunately so few of us actually follow it through. It can be daunting at first, but it can also yield great results and be incredibly rewarding.

Here at Love Energy Savings we’re always looking for ways to help businesses. We make it our mission to save them money and provide advice wherever possible.  

Maybe you feel like the time is now, and you’re ready to put plans into action and start your own business. First things first, though – you have to do your research and decide: where in the UK are you going to start your business and, more importantly, how much will it cost?

Fear not, because Love Energy Savings have done the hard work for you and compiled all the statistics, useful facts and handy pieces of information about each region into one big guide. All our data comes from valid and reliable sources, such as local city governments or the Office for National Statistics, so you can be sure that we’re giving your information that you can trust.

Here you can take a quick glance at each region’s average energy prices and rent per year, you can also read in-depth descriptions on the specialities each part of the UK is known for. The LOVE business price index has got absolutely everything you need to know, so let’s compare .  

 

North Scotland

Average energy price p/KwH - 11.88p

Cheapest Regional Supplier - Npower

Average Annual Commercial Rent (£ per sq. ft.) - £28.00

Average Annual Wage - £25,539

Business Population of Largest City - 10,120

Business Survival Rate (4 years) - 54.0%

When thinking about where to set up a business, many people may gloss over North Scotland. It doesn’t get much attention, but that doesn’t mean it’s a bad place to flex your entrepreneurial muscles.

It’s home to Scotland’s third largest city, Aberdeen, which, thanks to its coastal location, means it’s one of the biggest centres in the UK for the energy industry. The Scottish coast is renowned for its petroleum deposits, and its oil industry remains one of the strongest in the world.

Because of this, North Scotland is a strong contender for those specialising in energy, finance and economics. And you don’t just have to be based in the oil industry to set up here. The Scottish Highlands have an abundance of wind to go around, meaning it’s perfect for wind farms, and the coast provides an ideal spot for harnessing tidal energy. If you’re looking to make waves in the area of energy efficiency, then you certainly shouldn’t discount North Scotland.

If that wasn’t enough, Aberdeen in particular has strong ties with granite quarries in the area, so engineering and manufacturing businesses could find plenty of custom here too.

Why set up in North Scotland?

On the fence about setting up here? Let’s run through some of the stats and let the facts speak for themselves…

Possibly due to its more secluded nature when compared with other regions in the UK, the business survival rate in North Scotland is (on average) higher than elsewhere. 54% of businesses will survive for at least four years – that’s pretty good odds in our eyes.

The business population of its largest city, Aberdeen, is approximately 10,120, considerably less than the average. This means less competition and more freedom to find and hone your niche.

South Scotland

Average energy price p/KwH - 11.11p

Cheapest Regional Supplier - Npower

Average Annual Commercial Rent (£ per sq. ft.) - £23.86

Average Annual Wage - £27,428

Business Population of Largest City - 19,140

Business Survival Rate (4 years) - 47.3%

 

It’s easy to understand why some people might choose South Scotland over its northern neighbour at first glance. It’s home to the country’s largest city, Glasgow, along with Edinburgh and smaller cities such as Stirling and Perth. There are so many options to choose from you’re almost spoilt for choice.

Over the past few years Glasgow has grown into a thriving metropolis. It has “Smart City” status under its belt, recently having received an influx of funding and support for its technology sector. If you’re a tech-based start-up, then Glasgow is the perfect place for you to find your footing. The city is really starting to push for more innovation, so if you’re an ambitious start-up wanting to make a change, there’s no need to look anywhere else.

Despite not being its largest city, Edinburgh is the capital of Scotland. And like all capital cities, it attracts huge numbers of businesses – both those looking to put down roots for the first time and those who are looking to branch out further.

It also attracts businesses from a whole number of different sectors and specialities. This means, no matter where you’re coming from, there’s more than likely going to be a place for you here. Edinburgh has an abundance of industries including:

  • Financial services
  • Technology and software
  • Creative industries
  • Life sciences
  • Tourism
  • Retail
  • Low carbon energy and sustainability

Why Settle in South Scotland?

As you can see, the South of Scotland is a welcoming place for a whole range of industries, but let’s take a look at the numbers to see how it adds up on paper.

For a city that specialises in low-carbon forms of energy and becoming more sustainable, you’d probably assume the South of Scotland has lower energy prices -and you’d be right! On average, people in the South of Scotland pay 11.11p/KwH from their regional supplier, Npower. As one of the biggest expenses a business will ever have to pay, energy prices should be high on your priority list when scouting new locations.

Alongside energy, another large expenditure for businesses is the money that goes on office space – commercial rent. Even if you plan on starting your company in your own home, as you begin to grow and expand you may need to acquire office space. The average amount per square foot (per year) in the South of Scotland is £23.86 – not too bad when you compare it to the rest of the country!

 

North East

Average energy price p/KwH - 11.11p

Cheapest Regional Supplier- Npower

Average Annual Commercial Rent (£ per sq. ft.) - £15.75

Average Annual Wage - £24,787

Business Population of Largest City - 8,340

Business Survival Rate (4 years) - 47.2%

 

The North East has benefited strongly from the push to establish a Northern Powerhouse over the years – so much so that it’s become the go-to place to settle down for a variety of industries. In the past, entrepreneurs may have been wary of settling in the North East, deeming it to be rather isolated, but this is fast changing, with plans for high-speed railway links coming to fruition.

Industries particularly at home in the North East include finance, energy and technology. Similar to  North Scotland, this region has a good coastal footing, meaning those in the energy and manufacturing sectors – particularly energy efficiency and sustainability – can make a good home for themselves here.

Why look to the North East?

The North East is a strong contender for a number of thriving industries, but if the numbers don’t add up then you might start to look elsewhere. Fortunately, the entire region, and its largest city, have a lot going for them...

Newcastle upon Tyne is the largest city in the North East, and it should certainly be on your list of pros for settling down here. The business population of Newcastle is approximately 8,340, somewhat higher than the regional average of 5,086, but there are still plenty of opportunities for ambitious up-and-coming entrepreneurs to plant strong roots here.

As stated, two of the biggest expenditures for businesses are energy and rent. And the North East offers competitive rates for both. The average annual commercial rent per square foot here is £15.75, and the average energy price is 11.11p/KwH – meaning you can worry less about your finances and more on  running your business.

Thanks to the North East’s strong ties and the improvements being made to transport links to other areas of the country, such as the North West and Yorkshire, you can choose to set up your base in Newcastle but do business elsewhere. Cheap rent allows you the flexibility to do that.

 

North West

Average energy price p/KwH - 11.06p

Cheapest Regional Supplier - E.ON

Average Annual Commercial Rent (£ per sq. ft.) - £19.03

Average Annual Wage - £25,720

Business Population of Largest City - 96,840

Business Survival Rate (4 years) - 46.6%

 

The North West has been transformed over the past few years – so much so that it’s starting to rival London in terms of opportunities. This is only strengthened by its transport links to the North East and Yorkshire, and high-speed railway lines mean you can be in the capital in just a couple of hours.

Most consider the capital of the North West to be Manchester, and thanks to the still-growing hub of Media City UK, based in Salford Quays, the city is a hotspot for businesses specialising in digital, creative and media. But it isn’t the only city to be thriving under the recent Northern Powerhouse push. Liverpool, with its strong ties to the docks, its rich history and city-of-culture status, is also a strong contender for startups. This is especially true for those specialising in the areas of medicine or science, thanks to the brand-new £335m state-of-the-art hospital opening in summer 2017. Preston and Blackpool, located a little further North, are both growing hotspots too! Preston is a huge player in our defence & aerospace industry, as well as offering an abundance of retail opportunities in the thriving city centre. And Blackpool continues to profit from a thriving tourism industry.

 

Is the North West best for your business?

No matter what you’re looking for, the North West is always a good location in which to establish a new business – with a four year business survival rate at almost 47%. With strong transport links and a thriving local economy – it ticks all the boxes!

Fortunately, as more attention becomes focused on the North West, more money is invested into commercial property developments in and around the major cities. This means office space is rather cheap compared with other regions, clocking in at an annual average of £19.03 per square foot. [EC1] 

If that wasn’t enough good news, energy prices in the region are also very reasonable: approximately 11.06p/KwH. That’s two expenditures that suddenly drop down your worry list. Plus, the North West has a stellar reputation for low costs of living. Another bonus!

Yorkshire & the Humber

Average energy price p/KwH - 11.18p

Cheapest Regional Supplier - Npower

Average Annual Commercial Rent (£ per sq. ft.) - £15.91

Average Annual Wage - £24,600

Business Population of Largest City - 27,625

Business Survival Rate (4 years) - 46.9%

The phrase ‘financial services’ doesn’t immediately conjure up images of Yorkshire. You may picture “the City” in London and busy people with briefcases taking the underground. But given recent developments, Yorkshire has established itself as a financial hotspot. In fact, the city of Leeds actually has the strongest population of businesses specialising in financial services outside of the UK capital.

This is fantastic news for start-ups and small businesses in the sector. Setting up in London in the financial industry is a tricky thing to get right. Leeds, on the other hand, opens up a whole new world for you.

Not based in finance? Not to worry because the rest of the Yorkshire and Humber region has an abundance of specialities. In York, the health and social work sectors are flying – almost 14% of people were employed in this industry in 2015.

On the other hand, manufacturing is huge in Huddersfield. In fact, 16% of the city’s employment is within the manufacturing sector.

Should you set up in Yorkshire?

Yorkshire is a great home for businesses in a number of sectors, but how will your bottom line look if you decide to set up shop here?

First things first, annual commercial rent prices in the Yorkshire area are some of the cheapest in the UK, coming in at just £15.91 per square foot. That means decent accommodation in any number of rising cities, leaving you free to spend your hard-earned money on the things that matter most. Average energy prices are also on the lower side, costing just 11.18p/KwH – that’s even more money in your back pocket for spending on staff and marketing.

Speaking of staff, Sean Mallon, CEO of Leeds-based www.mybizdaq.com had this to say about why he chose to set up in this Yorkshire city:

"Many places across the UK benefit from lower operating costs, but the key factor for us was being in the right place to attract skilled staff to help the business to grow. Choosing a location based on price alone could be a costly mistake to make if your business relies on having skilled employees. For many businesses, particularly those in the tech industry, paying the premium of an office in a large city centre is a worthwhile investment in your business's future."

North Wales

Average energy price p/KwH - 11.81p

Cheapest Regional Supplier - Scottish Power

Average Annual Commercial Rent (£ per sq. ft.) - £18.00

Average Annual Wage - £23,473

Business Population of Largest City - 3,845

Business Survival Rate (4 years) - 48.5%

Even though North Wales isn’t home to the capital of Wales, it shouldn’t be discounted as a place to set up your business as it has plenty of benefits! The main towns and cities in this region are Wrexham, Rhyl, Bangor and Llandudno. The latter in particular has a booming tourism industry – a report by Sheffield Hallam University found that Llandudno “remains an important magnet for visitors.”

Elsewhere in the region, booming sectors include manufacturing, biotechnology and finance. The somewhat secluded location of certain towns and cities shouldn’t be off-putting – if anything, you should see it as a benefit for reduced competition and more room to spread your wings!

Why make North Wales your home?

North Wales is different to other regions. It’s far more specialised and niche, but all the more reason for you to settle down here! Let’s take a closer look at the numbers...

The average annual commercial rent for North Wales sits somewhere in the middle at approximately £18.00 per square foot. However, the four-year business survival rate for this region more than makes up for this, which at 48.5% is significantly higher than other regions across the UK.

Another positive? You’ll have far less competition than anywhere else, as the average business population of the largest city in North Wales is 3,845 meaning you’re more likely to succeed, grow your customer base and expand.

South Wales

Average energy price p/KwH - 11.20p

Cheapest Regional Supplier - SSE

Average Annual Commercial Rent (£ per sq. ft.) - £18.00

Average Annual Wage - £24,595

Business Population of Largest City - 11,515

Business Survival Rate (4 years) - 45.4%

Like almost all capital cities, Cardiff is a thriving finance hub. Those who specialise in the financial sector - from insurance brokers and banks to pension providers and accountants- are bound to do well here. What else does well in South Wales? According to The Cardiff Economy and Labour Market in 2015, business administration and services account for 10% of employment, retail is 11%, and the health sector is a huge 14%.

Why choose the South of Wales?

Much like its northern neighbour, the southern region of Wales has its own unique selling points, and the data certainly makes a strong case for setting up a business in Cardiff or the surrounding areas. First is the four-year business survival rate of 45.4% – the first of many strings to the region’s bow.

How much it will cost you to open and run your business is an important factor to take into consideration. In terms of energy costs, the average price is 11.20p/KwH, which is neither the cheapest nor the most expensive in the UK. But this is balanced by the news that the average annual rent for commercial property is only £18 per square foot, which can provide significant savings. The business population of Cardiff is also something to contend with. With approximately 11,515 businesses in the city, the South of Wales is an unsaturated city with plenty of room to grow and expand.

 

East Midlands

Average energy price p/KwH - 10.85p

Cheapest Regional Supplier - E.ON

Average Annual Commercial Rent (£ per sq. ft.) - £17.25

Average Annual Wage - £26,310

Business Population of Largest City - 11,215

Business Survival Rate (4 years) - 48.8%

Every region has its speciality, an area in which it really excels, and in the case of the East Midlands it’s healthcare. Not only is it the birthplace of worldwide pharmacy chain Boots, but Ibuprofen was also developed here, and the eyecare providers Vision Express started in the East Midlands. So if you’re a medical or science-based startup, you’ll be in good company!

The East Midlands also has a strong reputation in a whole host of different sectors, including manufacturing and construction, retail and textiles, food processing and technology.

Why settle down in East Midlands?

If you specialise in the medical or pharmaceutical industries, then the East Midlands may be looking like a favourable place to establish roots. But let’s take a look at the statistics to see if it suits your business plan on paper.

This region is incredibly well connected – it has a direct line to London as well as easy access to the North West, North East and Yorkshire. The region also boasts cheaper than average annual commercial rent, at just £17.25 per square foot, while the yearly cost for energy is one of the lowest in the country, clocking in at approximately 10.85p/KwH.

 

West Midlands

Average energy price p/KwH - 10.85p

Cheapest Regional Supplier - E.ON

Average Annual Commercial Rent (£ per sq. ft.) - £17.54

Average Annual Wage - £25,892

Business Population of Largest City - 33,870

Business Survival Rate (4 years) - 48.2%

The West Midlands is home to one of the largest cities outside of the capital – Birmingham. It’s a very industrial city, which is understandable given it was somewhat of a pioneer during the Industrial Revolution. This is probably why it’s become a magnet for startups specialising in the manufacturing and engineering industries. Top graduates and employees from all over the country flock to Birmingham because they know its reputation for attracting businesses that are intent on ground-breaking new developments.

But that isn’t all the region is known for. The public sector also thrives in the West Midlands – so if you specialise in education, health or public administration, then you’ll likely find strong footing here. And coming in third behind London and Leeds, the region’s major cities also boast a strong financial sector along with other business-related areas.

What do the numbers have to say about the West Midlands?

Similar to its neighbour, the East Midlands, the West Midlands boasts many benefits from a monetary point of view.

First of all, the average annual energy stands low yet again at just 10.85p/KwH. Many people underestimate the impact energy prices can have on their business’ bottom line, especially in the beginning when money may be tighter. But showing you have a good eye for where your business is going to be the most profitable stands you in good stead for growing your company in the future.

The average commercial property rent is also promising. At just £17.54 per square foot each year, there’s plenty of room to grow and expand as you find your footing without jumping in too quickly.

If those promising statistics weren’t enough, the average four-year business survival rate in the West Midlands remains strong at 48.2%. For those looking to hit the ground running in the manufacturing or engineering industries the West Midlands might be too good an opportunity to pass up.

East England

Average energy price p/KwH - 10.85p

Cheapest Regional Supplier - E.ON

Average Annual Commercial Rent (£ per sq. ft.) - £21.18

Average Annual Wage - £30,229

Business Population of Largest City - 4,845

Business Survival Rate (4 years) - 49.8%

East England is a region that often gets overlooked in favour of the capital or other buzzing metropolises across the UK, but it really has tremendous things to offer entrepreneurs and startups. The region is home to some of the biggest names in the country, including TK Maxx, Mothercare, Costco, Olympus and many more. Just this list of incredibly successful businesses proves that, if you want to thrive in East England, the region can provide.

But that’s not all. The region’s largest city, Norwich, is a fantastic place to set up if you’re based in the energy sector. Thanks to its coastal location, you’ll likely flourish even more if you specialise in newer and renewable forms of energy, as the city has become a hub for the latest innovative research.

Let’s hear more about East England

The price difference between the North and South is well documented, so as you head further towards the capital, prices start to rise. However, while the average commercial property price may be slightly higher than elsewhere there are plenty of other positives to take away. Firstly, energy prices are one of the lowest in the country, at just 10.85p/KwH. Whether this is due to the region’s strong ties to the energy industry we cannot know for sure, but if there are to be developments in the industry, East England is the place to be!

Other bonuses to consider include East England’s popularity. The business population of Norwich is just 4,845 on average. This is the second lowest in the UK, meaning you don’t have a lot of competition to knock elbows with as you find your footing and grow towards a prosperous future. The cherry on the East England cake is the incredibly high four-year average business survival rate of 49.8%.

 

London

Average energy price p/KwH - 10.54p

Cheapest Regional Supplier- EDF

Average Annual Commercial Rent (£ per sq. ft.) - £45.46

Average Annual Wage - £37,114

Business Population  - 265,230

Business Survival Rate (4 years) - 45.8%

What can’t you say about London? Not only is it the UK capital, but it’s also garnered a reputation for being a place where entrepreneurial dreams come true and where businesses can grow from start-ups to corporations. It’s one of Europe’s major economic hubs, and each area of London has evolved on its own to nurture business niches from all walks of life.

A whole manner of sectors can thrive in London. If being a major commerce and financial hotspot of not just the whole country but the entire world wasn’t enough, here are just a few of the other sectors that thrive in the capital.

  • Arts
  • Education
  • Entertainment
  • Fashion and retail
  • Healthcare
  • Media and digital
  • Professional services
  • Tourism
  • Research and development
  • Transportation

Running a business in London

One of the biggest things to consider about London is the sheer level of resources you’d have access to if you set up there. This includes the tremendous amount of business support London has to offer – ranging from the local councils to specially funded centres.

Now let’s take a look at the numbers. As you’ll expect, the costs of setting up and running a business in London are higher than elsewhere in the country, but you have to weigh this against the opportunities it offers.

However, there’s one particular element that will significantly reduce your business expenditure – the energy prices in London are surprisingly low. At 10.54p/KwH, they’re actually among the lowest in the country. As one of the biggest costs businesses face, energy prices shouldn’t be taken lightly in your search for new ground.

Izabela Minkiewicz, Founder of Blue Almonds, shares her thoughts on why she decided to open her business in Chelsea:

“I have a background in Hedge Funds and Finance, so for me the costs and money side of things are always my first priority. When I first opened Blue Almonds in Chelsea, I had done a lot of research into the best shopping areas, and had my sights set on Walton Street for my boutique.

I knew rent would be high, as it always would be in this area, but as the street is full of independent boutiques and art galleries I thought our children’s interior store would fit in nicely. Of course, this was 10 years ago and since then I have seen many businesses come and go, but the street is always full and we haven’t lost that unique, eclectic mix of businesses. 

It’s the perfect location, tucked between Knightsbridge and South Kensington, so we are flanked by Harrods and The Conran Shop, which is great commercially. There’s a real community amongst us – I know many of the shop owners. 

When we outgrew our original store 3 years ago, there was no doubt in my mind that I wanted to stay in the area, and when my current shop became available it was a very easy decision for me.”

South East

Average energy price p/KwH - 10.34p

Cheapest Regional Supplier - EDF

Average Annual Commercial Rent (£ per sq. ft.) - £23.77

Average Annual Wage - £31,603

Business Population of Largest City - 14,040

Business Survival Rate (4 years) - 50.3%

The South East is perfectly positioned along the coast, and as home to two of the biggest ports in the country it’s a gateway to the rest of the world. Thousands of visitors enter through the ports on cruise ships every single year. So, for example, if you are a retail-focused SME looking to drive more foot traffic to your store then what better place to set up than somewhere that attracts so much tourism? The region’s strong ties with Europe and the rest of the world make it a top contender for those looking to export too.

What can the South East do for you?

The South East has plenty to offer on paper…

The average annual energy price for the South East is 10.34p/KwH, one of the lowest in the country. That’s another load off your mind while you’re trying to hire staff and find clients – no one wants to be worrying about energy bills.

The business population of its largest city is also relatively low at approximately 14,040. But there are plenty of bustling cities to choose from in this region, from Brighton and Hove to Portsmouth and Southampton. You’re certainly not short of options.

One final thing to consider: the average four-year business survival rate in the South East is 50.3%. That’s incredibly high, and another reason why you shouldn’t discount this southern region as your business’ new home.

Cathy Hayward, Managing Director of Brighton-based Magenta Associates, beleives that talent is high up on the agenda when considering a business location:

When I set up Magenta 6 years ago, it was about the talent pipeline in the local area. Brighton is a hotspot for media and creative people, so we are in an ideal position to attract those people. But if we were based somewhere outside of Brighton and London that would be much harder. Brighton is also an attractive place for clients to visit (usually when they want to tag a weekend by the sea on to a meeting!)."

South West

Average energy price p/KwH - 11.29p

Cheapest Regional Supplier - EDF

Average Annual Commercial Rent (£ per sq. ft.) - £18.70

Average Annual Wage - £25,563

Business Population of Largest City - 18,280

Business Survival Rate (4 years) - 51.0%

The largest city in the region, Bristol, has a huge history of trade that dates back hundreds of years. From clothes and food to cars and petroleum, anything and everything has found its way in and out of the UK through Bristol. Although trading by sea isn’t necessarily as strong as it used to be, the South West still attracts visitors who flock to the beaches and all the sights the region has to offer, including Stonehenge and two national parks.

But don’t let the beaches and tourists fool you. As times have changed and the area has evolved, the South West has become a magnet to attract companies from a wide range of different sectors too, including some you’d never expect, from the creative and media industries to electronics and even aerospace engineering!

What can I expect in the South West?

If the South West has caught your eye, then the statistics could help you make the final decision. Although not as low as other regions, the South West’s average annual commercial rent prices are significantly lower than its neighbours, at £18.70 per square foot. It’s close enough to London that you can benefit from transport in and out of the city when the need arises, but not so close that the capital’s reputation for high prices carries over.

For a final piece of promising news, the average four-year business survival rate for the South West is a huge 51%. That means the chance of your company lasting four years is tremendously high. Get ready to sign on the dotted line!