Three key challenges faced by female entrepreneurs and tips to overcome them
Women are significantly underrepresented in entrepreneurship, it is said that up to £250 billion of new value could be added to the UK economy if women started and scaled new businesses at the same rate as UK men.
Yet, according to a business ambitions survey carried out by OnePoll, 56% of women want to start a business as opposed to 52% of men; therefore the shortage of female representation is not due to a lack of entrepreneurial appetite instead there is a wealth of evidence to indicate major barriers women face when leading a business.
Sehri Mirza, Project Manager of Newable’s various social impact programmes promoting diversity and inclusion in business shares her views on the key challenges currently faced by female entrepreneurs.
Recent research by the Unilever Foundry revealed that women who launch businesses regularly report that they have had to challenge gender stereotypes and overcome societal expectations. Nearly half of start-ups have stated that they believe there is a gender-bias issue in the start-up space. Traditional social norms are reflected in the business world; a common notion is that female entrepreneurs have a less competitive, aggressive and cut-throat attitude and therefore they don’t possess the skills necessary to lead a successful business such as assertiveness, leadership and negotiating.
Inclusion in the workplace
Although Start-ups/SMEs may achieve gender diversity in the workplace with an equal number of female and male leaders, many female entrepreneurs still encounter gender-bias difficulties in their own businesses, with 39% of female founders reporting sexism whilst running their start-up. Furthermore, female founders with families often report that they have to sacrifice their position of leadership in their business due to the pressures of managing a work-life balance and the impression this give to their male employees. Whilst conducting one-to-one interviews with 20 female small business leaders as part of a mentoring programme, it was noted that more than half of the entrepreneurs were looking for support in creating an exit strategy. Reasons for why they wanted to either leave their position or sell their business were related to gender-bias, inclusion and having a work-life balance).
Although intervening deliberately to affect norms is not straightforward, shaping more supportive social norms will be a powerful driver of progress towards gender equality and women’s empowerment. Companies have a large role to play in this change, possessing a wide range of levers they can use to cultivate more positive and diverse images of women and enable new behaviours that level the playing field for all.
42% of female founders believe that funding was one of the most challenging barriers when starting up their business. According to The Unilever Foundry, nearly 30% of female founders reported that investors have been less willing to invest in women with comments being made like the following: “Investors questioned me a lot more about whether I’d be able to manage a company on top of raising my two children, which isn’t something that men get asked about.”
The Entrepreneurs Network has found that just 9% of funding for UK start-ups goes to women-run businesses in the UK annually.
Men are 86% more likely to be funded by venture capital and 56% more likely to secure angel investment than women, according to the Entrepreneurs Network and Beauhurst.
Another issue that women face when trying to raise finance is that they are perceived to be more (and also too) risk averse. An education on risk taking, on investment opportunities and peer learning from the few female investors who are leading the way in these areas will help demonstrate that this is just a perception, and no more.
Newable’s core belief has centred on generating inclusive economic growth. This informs our purpose of helping businesses at the heart of the economy to thrive. In order to deliver on these goals, we have developed a comprehensive platform of products and services across financial services, professional advice and workspace.
With Newable’s innovation advisers working closely with our investment analysts at Newable Private Investing we are in a unique position to ‘connect the dots’. This means we can support female entrepreneurs across capability building, pitch training, grant funding as well as such exciting Innovate UK funded initiatives as the Global Business Innovation Programme. In addition, we support IUK on their Diversity & Inclusion programmes such as Women In Innovation, where we are offering Innovation support.