The 2025 Start Up Ambition Report found that 47% of UK adults are considering launching a business or side hustle in 2025—a 12% increase from last year. While London still sees the highest number of new business registrations (66,920), the North West’s rapid expansion signals a shift in where businesses are choosing to start and grow.
What’s Driving the North West’s Business Boom?
Several factors are making the North West an attractive option for startups and SMEs:
- Affordability & Accessibility: Lower operating costs compared to London make cities like Manchester and Liverpool appealing for new businesses.
- Strong Sector Growth: Industries such as business administration (+17%), finance and insurance (+5%), and hospitality (+3%) are thriving, aligning with national trends.
- Manchester’s Rise as a Startup Hub: With a booming tech, media, and finance sector, Manchester is becoming the UK’s leading city for innovation outside London.
- Liverpool’s Entrepreneurial Energy: Liverpool is emerging as a hub for creative industries, tourism, and digital businesses, attracting investment and talent.
Top Growth Sectors in the UK & North West
Certain industries are seeing rapid expansion across the UK, and the North West is at the centre of this business transformation:
1. Business Administration & Support Services (+17% YoY Growth)
- Key locations: London, Greater Manchester, West Midlands
- The demand for outsourced HR, IT, and payroll services is surging as businesses focus on core operations while reducing internal costs.
- The rise of remote work, automation, and cloud software has driven demand for scalable administrative solutions.
2. Finance & Insurance (+5% YoY Growth)
- Key locations: London, Westminster, Greater Manchester
- Economic uncertainty and rising demand for loans, insurance, and investment products have fueled growth in the finance sector.
- Manchester is a growing fintech hub, with startups capitalizing on digital payments, AI-driven finance, and risk management solutions.
3. Accommodation & Food Services (+3% YoY Growth)
- Key locations: London, Greater Manchester, West Midlands
- A surge in domestic and international travel is boosting demand for hotels, restaurants, and unique hospitality experiences.
- The rise of food delivery services and online ordering is reshaping the sector, with businesses adapting to changing consumer lifestyles.
A Shifting Business Landscape
The North West’s growth is significantly outpacing Yorkshire and The Humber (21,960 new businesses) and the North East (8,745 new businesses), reinforcing its position as the leading business hotspot of the North. However, the North East continues to face challenges, highlighting the need for further investment and support to drive regional entrepreneurship.
Jerome Fernandez at Funding Circle comments, “The growth of new businesses is essential to strengthening the UK economy, and providing entrepreneurs with access to finance is key to turning their vision into reality. Despite recent challenges, data suggests a positive outlook, with ONS business insights revealing that 22% of trading businesses expect their turnover to rise by March 2025, and 20% anticipate overall performance growth within the next year. The data underscores the resilience of UK entrepreneurs, the shifting regional business dynamics, and the continued importance of financial support and policy initiatives to sustain and encourage business growth in the years ahead.
When starting a business, choosing the right location is crucial for success. It’s important to consider the services you offer, how they fit within the local market, and the level of competition in the area to ensure your business can thrive. While concerns over taxation and rising costs persist, a business credit card can offer a flexible financial safety net, helping entrepreneurs to hit the ground running, manage cash flow, and keep their businesses running smoothly.”
Looking Ahead
With business confidence on the rise and an increasing number of entrepreneurs choosing to set up in the North West, the region is poised to play a key role in the future of the UK economy. As Funding Circle continues to provide access to finance for startups and SMEs, the data reinforces the importance of regional investment in fostering long-term business growth.