How To Launch A Startup In Birmingham

Birmingham, sometimes referred to as the UK’s “second city”, is a vibrant district in the West Midlands. It combines business, education and culture to produce a strong, diverse economy with something for everyone – and a great place for a startup.

The city is known for its shopping destinations and world-class cuisine, including the world-renowned Balti Triangle. The music scene is equally as exciting, and Birmingham has produced international bands like Duran Duran and Black Sabbath.

For the sport lovers, you can watch major sporting events at the Edgbaston Cricket Ground and Villa Park. The Commonwealth Games was hosted in the city in 2022, showcasing all that Birmingham has to offer to international tourists.

It may not take much convincing for entrepreneurs to head to Birmingham to start a business. But of course, there are multiple things to consider first.

Why Start A Business In Birmingham?

Backed by its entrepreneurial spirit, Birmingham has produced some of the most innovative startups across multiple industries. The Greater Birmingham Chambers of Commerce reported that 44,594 new startups were registered in the city in 2023, setting an all-new record.

So what makes this city so appealing to start a business in?

Stable economy: Outside of London, Birmingham is the largest city in the UK, contributing more than £30 billion every year towards the national economy. This stability offers startups a good starting point to put their roots down in, and expand from there.

It’s more affordable: London itself can be costly to start a business in, with exorbitant home and office rentals. On the other hand, Birmingham is far more cost-effective to live and work in.

Excellent transport: Birmingham is still connected to London, especially with the upcoming HS2 high-speed rail project. Additionally, Birmingham Airport offers flights out to international countries which can come in handy if you want to expand globally.

Plenty of talent: Birmingham boasts five universities, including the prestigious University of Birmingham and Aston University. These institutions are producing a steady stream of highly-talented graduates in technology, finance and business.

Which Industries In Birmingham Have Startup Opportunities?

While the city has several industries that are currently booming, these are some of the stand-out sectors.

Fintech: Quite a few startups have emerged in blockchain and digital payments, making Birmingham a prime spot for entrepreneurs wanting to start a business in financial management.

Healthcare: Birmingham is home to the famed Queen Elizabeth Hospital and world-class medical research institutions. As a result, the city has seen an increase in startups in healthcare and biotech.

Manufacturing and engineering: During the Industrial Revolution, Birmingham was a key player in the manufacturing and engineering sectors, dubbed the “Workshop of the World.” Today, the city continues to dominate in these industries, particularly innovating in aerospace and automotive.

Creative and digital: Birmingham fosters creativity, and you’ll find plenty of digital marketing agencies and gaming studios here. Entrepreneurs have ample opportunity to expand into app development, artificial intelligence (AI) and even media production.

Incubators And Accelerators In Birmingham

Birmingham has some of the top incubator and accelerator programs, designed to fast-track a startup’s success through guidance, networking and financial support.

Innovation Birmingham: This leading tech incubator offers office space and investor connections to startups, often hosting events and programs for startups to attend.

STEAMhouse: Designed specifically for startups in the tech, digital and creative spaces, this incubator program provides co-working spaces, mentorship and funding.

Bruntwood SciTech: This organisation focuses on tech, life sciences and digital startups, giving entrepreneurs in these sectors access to industry experts and the opportunity to collaborate.

NatWest Accelerator: This is a six month program to help founders scale their business through mentorship and free office space.

Bseen (Birmingham Skills for Enterprise and Employability Network): Led by the universities, this accelerator program assists student and graduate startups with access to funding, support and working space.

Funding Opportunities For Startups

Any startup founder will know that a key aspect of starting a business is acquiring the capital to do it. Here are some funding options in Birmingham that you can consider if you are thinking of starting a business there.

Angel investors: The Minerva Business Angel Network is an organisation that can connect startups with angel investors who are looking to invest in high-growth potential ventures.

Venture capital firms: Birmingham has plenty of venture capital firms including Midven which invests in early-stage startups and Mercia Asset Management that provides venture capital and private equity.

Government grants and loans: Innovate UK Grants offers funding to tech and research-driven startups while the West Midlands Combined Authority Grants support business development.

Factors To Consider Before Launching Your Startup

If you are set on Birmingham as your startup’s base, there are a few things to keep in mind. Firstly, choose a location within the city that will suit your industry. For example, Digbeth is home to more creative startups while the city centre would be ideal for fintech.

Birmingham is big on hosting business events, so take advantage of these to meet other entrepreneurs. The more of a support system you have, the better your chances are at success.

Every city has its own legal requirements when it comes to registering a business and tax, or even industry-specific regulations, so do thorough research into these to make sure you are compliant.

How To Set Up A Business In Birmingham

Here is a step-by-step guide on how you can legally set up your business in the city of Birmingham.

Choose a business structure

Firstly, you will need to decide on your business type. A sole trader will give you 100% ownership, but also personal liability if anything goes wrong. A limited company offers liability protection and some tax benefits, ideal for small to medium size enterprises (SMEs). If you have more than one founder, a partnership would be the ideal choice.

Register your business

The next step is to register the company. If you are self-employed, you can register as a sole trader with HMRC. If you are a limited company, then you will need to register with Companies House.

Set up a business bank account

You can then set up a business bank account to manage company finances. If your annual turnover exceeds £85,000, then you will be required to register for Value Added Tax (VAT).

Secure a business premises

If you are not working from home, you will need an office or co-working space. Alpha Works or Custard Factory are great options for startups.

Should You Start A Business In Birmingham?

Birmingham is without a doubt one of the best places in the UK to start a business. You can explore an array of industries, all of which are welcomed by the city from tech to arts and everything in-between.

The city’s accelerator and incubator programs can help get your startup to where it needs to be, and there is no shortage of financial support.

It may take some careful planning and an innovative concept on your part, but if you get that right, you can grow a highly successful business in this dynamic city.