Why Yorkshire is one of the best places to start a business right now

New analysis of government data maps the regions where new businesses are most likely to still be trading five years on, with Yorkshire making the ranking, above London.

Government data shows that small and medium sized businesses make up a huge 99.8% of UK firms, forming the backbone of the economy, yet income and survival are far from evenly distributed. Sole proprietorships now account for 56% of all UK businesses, and 73,450 new businesses were  added to the Inter-Departmental Business Register (IDBR) in Q3 2025 alone, showing that self employment is growing rapidly.

Leading up to the start of the new financial year on 6th April, business insurance provider Protectivity has analysed government data to reveal the sectors that generate the highest self-employment income, and the regions where businesses are most likely to survive.

The huge earnings divide

The findings reveal that the average self-employed income across all sectors in the UK is currently £24,096  but this figure conceals an enormous range. The two highest earning sectors, Finance, Insurance & Real Estate (£167,606) and Legal & Accounting (£166,071), earn more than seven times the self-employed average.

The sharpest divide sits between second and third place. Human Health and Social Work Activities (the third highest earning sector) brings in just £33,167 a year, more than £130,000 less than Legal & Accounting above it making it the largest single earnings drop in the entire table.

At the opposite end of the spectrum, the three lowest earning sectors are Transportation & Storage (£12,521), Education (£12,121), and Administrative & Support Service Activities (£11,492).

Top earning sectors:
1) Financial, Insurance and Real Estate Activities – £167,606
2) Legal & Accounting Activities – £166,071
3) Human Health and Social Work Activities – £33,167
4) Other Professional, Scientific and Technical Activities – £32,128
5) Arts, Entertainment and Recreation – £23,478

The regional picture: Where businesses are most likely to survive

Of the over 9.75 million new businesses formed in the past six years, the highest concentration was in London (480,540), followed by the South East (277,750), and the North West (214,355). Lagging for new business formations were Northern Ireland (35,360), the North East (56,325), and Wales (69,790).

But volume of formation and survival rate tell very different stories. The average five-year survival rate across the UK is 38.4% with the top performing regions significantly outperforming this benchmark:

Top regions for new business survival:

1) South West – survival rate: 43.5%
2) Northern Ireland – 42.8%
3) East England 40.4%
4) South East – 40.2%
5) Yorkshire and The Humber – 40.1%

Expert case studies from real business owners

With so much uncertainty when starting a new business, why are such a large percentage of the population still drawn to self-employment?

Lawrie Jones, founder of multiple SMEs including Fly Above Fear, comments:

“I think people recognise how precarious the world of work is and that a great job at a huge company isn’t a guarantee of lifelong success and riches. Instead, you can have more fun, make more money, and have a better lifestyle while working for yourself, and who wouldn’t want that?

“It’s also cheaper and easier for people now to develop professional businesses from their kitchen table, lounge or bedroom and the barriers to starting a business are being broken down by technology, and that’s great.

“For me, I’ve worked in large organisations and there’s always a tendency for inertia. Great ideas can get lost, forgotten, or ignored inside a large bureaucracy. When you run your own business, you can develop ideas, invest in them, and (hopefully) see them succeed. If they fail, that’s on you, too. Working for yourself is inherently risky and with that, there’s stress, but the rewards and pay-offs are much higher too.”

Laura Bartlett, a four-time business founder, adds her perspective:

“I’ve built businesses for 16 years because autonomy has always been my non-negotiable goal. Building your own company allows you to think critically and position yourself where the world is heading, rather than where it’s been.

“For me, true security comes from having full control over my future and not leaving my trajectory up to fate. When a business is structurally sound and aligned with a clear vision, survival isn’t the goal and sustainable growth is inevitable.”

For aspiring business owners, Lawrie offers the following advice:

“Firstly, spend as long as you can developing the idea. Search online for competitors, speak to other people and test your market proposition. Understand who your customers are, where you’ll engage them and establish why they’d choose you.

“When I built my last business, for example, we set a realistic budget and stuck to it. There was lots more we could have done in the first iteration, but it was better for us to keep things lean and test how the market would respond before spending lots of money and taking lots of time.”

Chris Trotman, Underwriting Manager at Protectivity, continues:

“Many business owners get swept away in the excitement of starting a new business and all the fun aspects such as developing your idea, building your ideal customer base and scaling quickly but longevity is built in how well risks and finances are managed along the way.

“Making sure you have the right protections in place is essential, with suitable business and public liability insurance being a key component of financially protecting your new venture. It’s not about being pessimistic, it’s about giving yourself the stability to keep moving forward if unforeseen challenges arise.”