EOW Reflections: The UK needs women entrepreneurs now more than ever

Let’s be clear. This is not a call for fewer male entrepreneurs. I’m saying that we need more women led businesses too.

Small businesses drive change, innovation, levelling up, and contribute hugely to families, communities, wider society and social value, as well as the economy, in essential ways that are simply different to big businesses. The UK need the skills, attitudes and insights women bring. And it doesn’t stop at gender. We need our women entrepreneurs to come from all ages, communities and backgrounds. We all have a role to play, and we need to inspire future generations.

But with just a third of entrepreneurs being women, and women being the majority owner of less than a fifth of businesses with at least one employee, there is clearly more to do. Recognising, respecting and encouraging more of women’s entrepreneurial talent, with the right support, could present one of the greatest opportunities for economic growth and answer the Government pleas for increased productivity and growth. The Alison Rose Review found that Britain could benefit from up to £250bn in new economic value if women in the UK started and scaled businesses at the same rate as men.

However, progress rarely happens without a good push. I spoke at a Women’s Conference this week and OSBC was represented at the Small Business Britain Female Entrepreneurship: Moving Forward Report Launch. It did strike me as sad that there weren’t more men at those events. We need the support of men too and they need to hear the stats and help with the push.

Of the UK’s 5.5 plus million small businesses with employees, almost 1 in 5 (18%) are led by women in 2024. That around 900,000. It’s looking good, but that 1:5 figure hasn’t changed in recent years. Despite the rapid growth in women founders over the last 5 years, the number of male founders continues to outpace women. We need many more female entrepreneurs because women are brilliant at it.

There’s data to show that female entrepreneurs outperform men. Even though men get more funding women founders tend to build businesses that generate more revenues, create higher job growth, dream bigger, and execute better. The average investment in companies founded or co-founded by women is around half that raised by only male-founded companies. However, women-owned businesses return on investment is, on average, double that of men-owned businesses.

Because of the shortage of funding women tend to focus more on things like the cashflow, debt and efficiency, so they become better business managers. They’re more likely to be open and collaborative, happy to take risks but are more sensitive to the pain of losses than men so are better risk managers. They tend to be less hung up on making money and are motivated by things like autonomy, flexibility and purpose and want to contribute to community and wider society. The most successful companies are the ones that make a difference.

The British Business Bank says female founders miss out on billions of pounds of investment. For every £1 of UK venture capital investment, less than 1p went to all-female founder teams in 2019, with 89p in every £1 going to all-male founder teams. Biases may play a part in female entrepreneurs’ difficulty getting funding. A lack of female entrepreneurial peers and mentors  is also holding women back as they benefit from a support network of individuals who’ve had the same experiences or faced similar situations.

There are the challenges. We’re better at it but we’re underconfident. We don’t sell ourselves well to funders who are majority male and can be, possibly unconsciously, biased, hence we need more men in the room. We need more female peers and mentors to support us. If we’re to add that £250bn to the UK Economy, we need the right support for the sector and stage of our businesses. Help us achieve our aspirations and we’ll help the Government build the economy of its dreams.