Posted: Thu 25th Jul 2019
Using tax returns to highlight women running businesses, regionally focused female business support, improved mentoring and increasing the number of female investors are among the recommendations in a major report focused on overcoming Britain's business owner gender imbalance.
The Women and Enterprise All-Party Parliamentary Group (WEAPPG) study said even though more women than ever are starting businesses, "there are still significant barriers to female entrepreneurs, both starting and scaling their businesses".
One in every five businesses is owned by women but if the gender imbalance was addressed, the UK economy could be boosted by an additional £250bn.
More data on women owned businesses
WEAPPG said there is a strong need for better data on women owned businesses because without it, "it is virtually impossible to measure and track their growth in the UK or the effects of government funding and schemes that are intended to encourage them".
It called for tick box question for women-owned businesses to be added to tax return forms and gender disaggregated data so that the impact of any policy changes can be properly measured.
Finance for female entrepreneurs
Funding is a major factor holding back female business owners. When it comes to bank, WEAPPG's research found women are more likely to apply for longer-term loans and ask for less money than men, while they're less likely to risk a family home for a secured loan and go to alternative investment providers.
In addition, a Treasury-commissioned report earlier this year found that for every £1 of venture capital investment, just 1p goes to female entrepreneurs.
The report said the government needs to measure gender diversity at initial conception, scale-up and exit to understand why attitudes towards funding differ from those of men and with venture capitalists to determine at which point women drop out of funding opportunities or what prevents them from applying in the first place.
More also needs to be done to promote the funding options that are available, it added.
WEAPPG called for an increase in the number of women working in venture capital firms by encouraging diversity and inclusion when recruiting to ensure teams are not hired in the image of the existing team.
Banks and finance companies should also collect data on the SMEs and record whether a business owned is female.
Coaching and mentoring for female entrepreneurs
According to the report, "there is strong evidence that needs based mentoring and coaching for female business owners has a significant impact on economic growth and success".
Studies have found that women and men prefer different kinds of business advice with men opting for business development tips from consultants while women often prefer personal development via mentoring and coaching services.
It has also been found that women are also more likely than men to say they find the environment around business advice to be quite unwelcoming and unsympathetic.
The report pointed to the US Small Business Administration's Women's Business Centers as a good example of support for women. Operating in almost every state, they offer training on various business subjects and access to financial and procurement assistance programmes.
The US tops the list of countries for its support of high impact women's entrepreneurship. The proportional population percentage of new female entrepreneurs setting up a business in the US is 9.2%, almost double the 4.9% rate in the UK.
The report said the government should develop regional businesses hubs through the UK modelled on the US example.
It also said mentors should to be properly vetted and for the government to established a standard for coaches and mentors.
Enterprise Nation has launched support on a local level through the Local Leaders project. 12 leaders, eight of whom are women, are running a new accelerator programme for business owners looking for peer-to-peer and expert support on their specific needs.
Craig Tracey MP, WEAPPG chair, said: We believe that now is the right time to empower female entrepreneur's potential as the UK leaves the European Union."
Women and equalities minister Penny Mordaunt MP added: "I want all women to be given the chance to reach their full potential and start their own businesses if they so wish.
"Female entrepreneurs are a great asset to our economy and we should be doing more to encourage more women to start their own businesses in the UK, then make sure they have the conditions they need to grow."
The Festival of Female Entrepreneurs returns to Bristol for the eighth year on 18 October. It brings together leading female entrepreneurs and experts to provide insights on growing a business. Book a ticket here.