New research from PlaceILive.com, the Yelp for Neighborhoods, has visualized where in London most businesses make it through their crucial first two years. Using open data, which they use to calculate their signature Life Quality Index, they ranked London’s boroughs according to the 2-year business survival rates.

business survival rate Two year business survival rates in London. Source: Office of National Statistics

The best boroughs to start a new business are Sutton and Kingston Upon Thames, where as the City of London is the most risky area to start one. In the top two boroughs 79% of new businesses make it through their first two years where as the lowest score is a mere 64%. The full list of business survival rates can be found at the bottom.

PlaceILive conducted this research to show how its platform helps entrepreneurs, startups and commercial real estate in London. By providing a combination of government open data and user reviews the startup measures livability of cities, which is both a useful tool for residents as for up coming businesses when deciding where to settle.

When trying to find an explanation of why new businesses are more likely to survive their first few years, PlaceILive found the strongest correlation with the transport accessibility scores from Transport for London. Surpassing the more likely suspects as income, vandalism, crime, or unemployment.

Their research has shown a significant negative correlation between the 2-year business survival rates and transport accessibility scores. The less accessible transport, the more likely businesses were to survive their initial two years. As the numbers from the Office of National Statistics includes all sorts of businesses (ranging from tech startups, freelance photographers to clothing stores, supermarkets and take away restaurants) one of the possible implications of this research could be that consumers prefer to shop nearby whenever a far away competitor is too difficult to visit.

No matter if this implication holds up, it is valuable to see that businesses outside of the city center tend to be less risky than those in the city. Regardless of what the causation is for these business survival rates, it does help entrepreneurs calculate the financial risks they are taking and tells consumers to appreciate the smaller businesses in the city, as they might not be there for too long.

Two-year Business Survival Rates for London Boroughs:

City of London64
Westminster69
Waltham Forest69
Southwark71
Newham71
Enfield71
Camden71
Barnet72
Lewisham73
Hammersmith and Fulham73
Greenwich73
Barking and Dagenham73
Kensington and Chelsea74
Haringey74
Brent74
Tower Hamlets75
Redbridge75
Havering75
Harrow75
Hackney75
Croydon75
Lambeth76
Islington76
Hounslow76
Merton77
Hillingdon77
Ealing77
Bromley77
Bexley77
Wandsworth78
Richmond upon Thames78
Sutton79
Kingston upon Thames79

Featured image credit: Death to the Stock Photo

Previous post

Corporate vs. Startups in FinTech: Reps from PayPal, Deutsche Bank, FinLeap and Number26 Take Their Stands at Heureka 2015

Next post

"The first dollar is real validation." - Daniel Faloppa of Equidam Talks Trust and Sensible Valuations