Can female entrepreneurship help create a more inclusive world?
How do women business owners fit into the pursuit of gender equality?
Put simply, women’s entrepreneurship matters because it represents a real economic opportunity that benefits societies overall. Research by the Women’s Business Council, has shown that the UK economy is missing out on more than 1.2 million enterprises due to the untapped business potential of women.
Furthermore, female entrepreneurs fill an important function as role models and community leaders. As the effort to build more gender inclusive societies and help women achieve their ambitions continues, it will be important to encourage initiatives that will help boost female entrepreneurship.
Here’s a closer look at access to finance, raising awareness of support networks, and increasing the visibility of role models and mentors — key drivers that shape female entrepreneurship today, and will continue to do so in the future.
Unbiased access to capital
In December, American Banker, suggested that there may be female loan bias. To explain why women get less than 20 percent of the loans made to SMEs, they pointed to a combination of factors, including female-owned businesses experiencing more negative assessments. The challenge of finding funding was also raised at a recent FSB ‘London Women in Business’ event, I attended. Karen Winton, the Managing Partner of Nest UK lead a discussion focused on the importance of women having access to different types of finance to grow their businesses.
It is important to highlight that although it can sometimes be challenging there are ways to overcome potential funding challenges. Jennifer Hart, Director of Everyday Cashmere, applied for finance from a traditional lender to pay for a shipment of cashmere from Mongolia. Her business growth was impressive (41% year on year for three years), and yet she was turned down. Before rejecting her application, she was asked how much her husband earns. “I don’t think the outcome of a man’s loan application would be changed by how much his wife earns,” Jennifer recounts.
According to research by EY, women are more likely to accept rejection when it comes to business loans. However, fortunately Jennifer didn’t let the initial rejection stop her. She turned to an alternative finance source, who approved her application almost immediately. Interestingly, early evidence suggests that online applications and automated decisions are adding fairness to the process, helping to grant more small-business loans to female entrepreneurs.
Today there are more sources of capital than ever: alternative finance, government schemes, angel investors. Don’t let a no stop you.
In her seminal book ‘Lean In’, Sheryl Sandberg points to a lack of mentorship as one of the factors that hold women back at work. Many of the world’s most famous entrepreneurs wax lyrical about the importance of experienced guidance for good reason.
Sarra Bejaoui, co-founder of SmartPA, met her mentor — who is now on the executive board — through work. The individual’s experience, business acumen, and investment, empowered her to launch and grow her company. “One of the most crucial pieces of advice I can give a female business owner is to find a mentor who is interested in and committed to your SME,” she explains.
In tandem with the growth of female entrepreneurship, a range of support and mentorship networks have opened up. In the UK, some great ones are:
- British Association of Women Entrepreneurs
- Forward Ladies
- Women in Business
- Building confidence
Perhaps the most important part of empowering women is helping them to build their confidence and assert themselves — often the ability and drive is already there. To address this, we need more positive role models to set an example. Everybody knows the female entrepreneurs in the community — the lady who owns the advertising agency or runs the local car dealership. If we celebrate these females and address the success drivers discussed, we can create an environment that promotes female entrepreneurs. It’s time to be bold. Let’s make the UK the best place in the world for ambitious women to start and scale-up their business!
Originally published on Medium on 7 March 2017.
Originally published March 7 2017 , updated May 29 2018