Today, there are 5.7 million small and medium sized businesses in the UK. Yet, research tells us only 20 per cent of these businesses were started by women.
This shocking statistic comes despite the fact that there are almost one million more women currently living in the UK than men.
That’s rubbish, isn’t it? In today’s world, shouldn’t it be 50:50? The answer, of course, is yes. The problem is that there are still some significant barriers faced by women who are looking to start a business.
This is a problem with far reaching consequences, for the whole of society. Research by the Women’s Business Council has shown that the economy is missing out on more than 1.2 million new enterprises due to the untapped business potential of women. Meanwhile, Deloitte has said that targeted help for early stage women entrepreneurs could provide a £100bn boost to the UK economy over the next 10 years.
I work for Virgin StartUp, the home of entrepreneurship for the Virgin brand. We help entrepreneurs to start and scale their businesses through a range of programmes. We’re also on a mission to help more women launch and grow successful start-ups. Since launching just under five years ago we have distributed more than £35m to over 2,500 entrepreneurs in the UK – 41 per cent of them being women. That’s more than double the national average, but in our view that’s still not enough. So what are the barriers preventing women from starting up? And how are we at Virgin StartUp working to smash through some of these?
Firstly, it is notable that there are fewer female entrepreneur role models out there today, than there are male role models. It’s a vicious circle – there are fewer female business owners, which means potential female business owners of the future aren’t as inspired to start up. To break this barrier the business community needs to celebrate its female successes harder.
That’s something we make a point of doing at Virgin StartUp. We regularly celebrate some of the phenomenal successes of the female founders we have supported, by inviting them to share their experiences on our blog. Equally, whenever we host our meetup events, which feature entrepreneurs sharing their experiences and advice, we strive to make sure we have always have strong female representation on the panel. It’s important to see other women following their dreams and being successful in order to inspire more to follow in their footsteps.
Another issue is confidence. Entrepreneurship requires you to look at a problem and think you can do it better. A recent study from Not On The High Street has shown that 23 per cent of women lack self-confidence when it comes to starting up. In fact, female-led enterprises were two and a half times more likely than male-owned businesses to say that confidence was a major obstacle to starting a business.
This confidence complex is an issue we’ve seen at Virgin StartUp too. We run a scale-up accelerator called StepUp and we’ve had feedback from some female entrepreneurs that they lack confidence to apply, due to fear of being overshadowed by the other fast growing businesses attending.
To combat this we now run a female-only version of our StepUp program. In this environment women tend to feel more supported and able to share the issues they are facing in their business, without fear of feeling like they’re not good enough.
Another reason this works so well is that a lot of the issues that prevent or hinder women when they’re starting up are gender specific. We have received feedback from participants that being able to hear how other female founders have dealt with these issues has been beneficial to improving their own confidence that they can manage these challenges in the future.
The great news is that there are more initiatives like the ones at Virgin StartUp happening across the whole sector and the impact it’s having on female entrepreneurship has been very positive. In fact, the proportion of female early stage entrepreneurs jumped 45 per cent between 2013 and 2016. In comparison the number of male entrepreneurs, rose by just 27 per cent.
For now though, there are still barriers reducing the flow of female entrepreneurs and more needs to be done across the board to help women feel like entrepreneurship is a path for them.
If you’d like to know more about Virgin StartUp or join our female only Step Up program and learn how to grow and scale your business, head to the Virgin StartUp website and apply for the programme now.