According to top Industry research the UK is one of the best countries in the world to launch a business. However, research shows that women are only half as likely to start a business as men. So, why are fewer women launching start-ups in the UK? Figures about the number of female entrepreneurs in the UK has led the Government to launch an investigation into the issue of women in business. The review was unveiled on 21 September with banker Alison Rose commissioned to make recommendations about how more women can be encouraged to start their own businesses.
Entrepreneurs strengthening small businesses
In a press release following the announcement of the initiative, Alison Rose said: “If we want to strengthen the UK’s position as one of the best places in the world to start and grow a business, then no-one can be left behind. Unfortunately, statistics show that women make up only a third of all entrepreneurs in the UK.”
The Government’s plan is to better understand the reasons for the lack of women start-up owners, and then provide realistic and useful support to this demographic.
Breaking cultural barriers
There is evidence to show fewer women are starting their own businesses, according to the Government. They cite a survey undertaken by Unilever Foundry, which shows that women don’t feel as supported as men in entrepreneurship and aren’t encouraged in the same way to start businesses.
It discovered that many women who started their own business were routinely fighting cultural stereotypes to overcome other people’s expectations. They also pointed out the lack of impressive female role models in the business sector.
There is also a school of thought that the portrayal of entrepreneurs in popular culture almost exclusively focuses on old-fashioned ideas. For example, The Apprentice portrays entrepreneurs as stuck in macho, throwback stereotypes.
Another problem routinely faced by women is the need to work harder in the face of other people’s prejudices. Decision-makers in sectors including banking, finance and venture capitalism are usually men, and are less likely to invest in female entrepreneurs. The Daily Telegraph published a survey recently that showed two-thirds of the 750 women interviewed felt that they hadn’t been taken seriously by investors when trying to raise money for their businesses.
Men are 86% more effective in securing venture capital funding than women, according to the survey, which also showed that men are 56% more likely to secure backing from an angel investor. Women also tend to secure fewer and smaller bank loans for business, and they are charged more. Just 9% of the start-up funding in the UK reaches businesses run by women.
At the launch of the initiative, Robert Jenrick, the Exchequer Secretary to the Treasury said: “The fact that Britain is home to so many new, innovative businesses is something to be proud of. But the fact that so few of them are started by women is shocking. Therefore, it’s vital that we identify the barriers that are hampering entrepreneurial women from securing the backing that businessmen have taken for granted.”
The review will examine new ways to help to start a business by looking at:
- the causes of the disparity between make and female entrepreneurship.
- the kinds of actions that could be taken to reduce barriers to women starting businesses.
- the disparities between businesses led by men and women when seeking external financing.
- best practice examples that could be adopted by financial service firms and investors looking to avoid gender bias when considering investment options.
This is all part of the Government’s ongoing work to increase diversity in business and build a country in which small businesses can thrive. The results will be published in spring 2019.
James Turner, managing director of Turner Little Limited (turnerlittle.com) said: “All of this evidence shows that the Government has its work cut out in tackling these problems. There is a significant pool of talent that remains untapped and underutilised because women don’t have the same opportunities as men, according to the information shown in the research.
“The UK should encourage women in their entrepreneurial aspirations in the same way that men are encouraged and supported. If more steps aren’t taken then, as a country, we can’t be surprised at the lack of women entrepreneurs. It’s extremely encouraging that the Government is taking the issue of gender-bias in entrepreneurship and small businesses in the UK seriously. It will be interesting to hear the results of the initiative and discover the steps the Government plans to take next year.”
About Turner Little
Founded in 1998 in Yorkshire, UK, Turner Little is a specialist UK and offshore company formation, banking and corporate services provider. Our services include company formation, UK and offshore banking, asset protection, credit correction, trademarking and trusts. Other services include Internet services, mail forwarding, wills and probate. Turner Little’s vision is to offer the best possible service, together with market leading products.