What are the barriers that female entrepreneurs need to overcome to succeed in business?
People choose to become entrepreneurs to address and solve issues that they experience personally and to take advantage of gaps in the market. But the way that we as women see and experience the world is different to the way that men see and experience the world and the problems we may seek to address won’t be the same. Women represent half of the population, so unless we close the gender gap and allow for diversity of thought by empowering female founders and women in leadership roles, we won’t be able to achieve an equitable society.
There is also evidence to suggest that female-led start-ups are often more successful and create a higher dollar-for-dollar return on investment. Women-led startups also employ more women so the business case for more female founders is extremely strong.
The situation here in the UK isn’t anything to celebrate and compared to best practice peer countries we have a lot of work to do to catch up.
In 2019, Alison Rose became chief executive (CEO) of NatWest Group and the first woman to lead a major UK lender. She was commissioned by the Treasury to lead an independent review of female entrepreneurship in the UK. The resulting report is called The Rose Review.
There were a number of important conclusions that were drawn by the report, which highlighted the barriers that women face to starting and growing successful businesses. Let’s take a look at some of those barriers.
1. Awareness of and Access to Funding
The report concluded that access to and awareness of funding is the number one issue for female entrepreneurs across the entire entrepreneurial journey, from intention to scale-up. Female-led businesses in the UK receive less funding than those headed by men and launch with 53% less capital on average. In addition, only 1% of all venture funding goes to businesses founded by all-female teams, which drastically inhibits scale up.
There is also a perceived bias within the UK venture finance community as only 13% of senior people on UK investment teams are women, and almost half (48%) of investment teams have no women at all. This is a real concern and one that has regularly been voiced by female entrepreneurs who feel they are judged to be less competent than their male counterparts.
2. Greater Risk Awareness
Another issue identified by the Rose Review is women’s greater risk awareness. Women are generally more cautious about starting businesses with women being 55% more likely than men to cite fear of going it alone as a primary reason for not starting a business.
3. The Perceived Gap in Skills and Experience
Then there is the fact that women are less likely to believe they have the skills necessary for entrepreneurship with only 39% of women feeling confident in their capabilities to start a business compared to 55% of men. This perceived gap in ability is, of course, a myth as women are in no way lacking the necessary skills to be successful entrepreneurs.
4. Disproportionate Primary Care Responsibilities
The report also highlighted the disproportionate primary care responsibilities that fall on women. Women are twice as likely as men to mention family responsibilities as a barrier to starting a business. It is ironic then that for women with children, flexibility around family care is their number one reason to start a business.
5. Lack of Relatable Mentors, Role Models and Support Networks
Another important issue that is holding women back from founding businesses is the lack of relatable mentors, role models and professional support networks that can help them to start and scale their enterprises.
So what can we do to help dismantle some of these barriers that female entrepreneurs need to overcome to succeed?
I think we really need to do a better job of demystifying entrepreneurship and making it more accessible. The Rose Review stated that only 6% of UK women run their own business and only 1 in 3 UK entrepreneurs is female. Moreover, 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. So clearly there is huge potential for economic growth if we tap into the power of female entrepreneurship.
Perhaps the most effective way to do this is to increase funding directed towards female entrepreneurs. This means that we need to get more women involved in Venture Capital. Reports have shown that female venture capitalists invest in up to 2x more female founders, so we need to see more women in investing roles at venture capital firms.
When funding is available, we need to ensure that female founders and entrepreneurs are fully aware of how to access it and have the knowledge, experience, skills, confidence and support to do so. The Rose Review found that women are 81% less likely than men to feel they can access the necessary start-up funds. This absolutely must be addressed if female-led businesses are to access funding.
As a society, we also need to provide greater support for female entrepreneurs when it comes to family caring responsibilities. Governments need to do more to ensure that support systems are in place to alleviate the huge burden that traditionally falls to women. The pandemic has highlighted what a delicate web of support women have woven for themselves and when something like a global pandemic happens it all comes tumbling down. Women need to be given more of a voice and a greater role in shaping policy.
We also need to increase support locally for female entrepreneurs by creating relatable and accessible networks and making mentors more accessible. Women are less likely to know other entrepreneurs or have strong female role models but they place a much higher value on external networks. So, providing a supportive eco-system for female entrepreneurs is massively important.
I have found though that many women aren’t interested in traditional male-dominated networking events or techniques. They don’t feel welcome in those spaces and they don’t enjoy the often masculine approach to promoting themselves to strangers. So this often leaves them with very few options when it does come to finding those external networks they so badly need.
This is the exact reason that I set up our coworking space in Totnes. I wanted to create an environment and an atmosphere where women in business would feel comfortable and welcome and like they belong. I wanted a shared office space where networking would occur naturally without the pressure and anxiety of traditional networking events. A space where women feel comfortable to open up and ask for the help that they need.
By spending time in such an environment, which is designed to meet their needs, women can also find the support necessary to overcome this fear of going it alone, because they will realise that they do not need to do it alone. They have a support network there waiting to help them mitigate the risks. This same network can also help them to realise that they do not lack the necessary skills and experience to be successful entrepreneurs. And even if they do, they will have a strong network that they can outsource to, if, of course, they have the necessary funds to do so.
We have a long way to go to break down the societal and cultural barriers that female entrepreneurs need to overcome. This isn’t a challenge that we can solve overnight. But like with all things, we just need to take the next logical baby step in the right direction. For me, that was starting my own women’s business network for The South Hams, and providing women with the support that we all need.
“Do what you can, with what you’ve got, where you are.“Squire Bill Widener
What have you found to be the biggest barriers that female entrepreneurs need to overcome in your personal experience? I’d love to know so please do comment below.
If you feel like you could benefit from a local support network to help you overcome the barriers that female entrepreneurs need to overcome, consider booking yourself a hot desk at our flexible office space in Totnes. We’re building a lovely supportive community of coworking women from the South Hams and Torbay and we’d love to welcome you in.
And while you’re here, perhaps you would like to sign up for our newsletter so you can find out more about our community and our upcoming events for female business owners in and around Totnes.
Stacey Sheppard is the founder of The Tribe, a small community-driven coworking space in Totnes that caters to creative, growth-oriented female entrepreneurs by providing an inspiring working environment designed to foster collaboration, connection and community.