The rise of female entrepreneurs out of the ashes of lockdown

The lockdown has impacted the workforce in several significant ways. According to research from the Institute of Leadership and Management, 94% of all organisations in the UK now offer their staff some form of flexible working . But even that might not be enough with continued talk of the Great Resignation in the UK: almost 7 in every 10 employees (69%) are apparently looking to move to a new job in the next couple of months, according to a poll undertaken by recruiter Randstad UK in November 2021.

Workers, and especially female workers, are looking for something more; a break away from their previous working lives and a chance to do something different whilst embracing a new work / life balance. Setting up a business is now a far more exciting tangible prospect than it might previously have been. Farringford Legal, itself a female founded business, has a mission to support other small businesses. Today as we celebrate International Women’s Day the team at Farringford Legal has been looking at the SME landscape for women and the barriers to success that still exist in 2022. ??

?Female-owned businesses are on the up but struggling

According to the most recent Rose Review, ?in 2021 145,200 female-led businesses were set up in the UK.?This demonstrates a growth of around one third per year since 2018 and that number seems to be rising with serious positive financial consequences for the British economy. In fact, in 2021, the UK government attributed ￡85billion to women-led SMEs in the UK. There is still however a massive gulf between the gender of founders, with male-founded businesses at 409,800 in 2021.?

Why is there such a gap? Many female entrepreneurs find it hard to find or access the right financial support to grow their businesses. In fact, just 9% of funding funnelled into UK start-ups goes to women-led businesses. According to the Entrepreneurs Network, women also tend to start businesses with much less available capital than male entrepreneurs.

?Some female leaders also experience outright sexism. According to a poll by the Telegraph, two-thirds of 750 female founders felt as though they were not taken seriously when pitching to investors. They also felt they were treated differently to their male counterparts. Which can only mean that there are inequalities, as there is no evidence that female-led companies perform worse than their male-led companies. In fact, the data suggests that they perform better.

?#breakingthebias – how to help women in business

The Daily Telegraph has identified five main reasons women do not start their own businesses. We have, together with the support of our own female clients, looked at these barriers and sought advice on how to overcome them.

1. Shortage of funding

It would unfortunately appear that male investors are more likely to invest in male entrepreneurs. Whether this is conscious or unconscious bias is unclear, but the facts are clear: men are 86% more likely than women to secure venture capital funding and also 56% more likely to achieve the backing of an angel investor, The sums involved vary greatly too as the average deal size for women in the UK is ￡2.22 million whilst for men it is ￡5.43 million.

The Rose Review was initiated to research the female-business landscape and offer recommendations to close the gap between male and female. The report is worth reading for the wealth of background and resources it highlights.?For instance, there is information on what the major high street banks are doing to support their female founder clients.

?If you aren’t looking to gain funding from a high street bank, there are an increasing number of funds and organisations dedicated to supporting female founders such as:

• ?Girl Geeks
• The Allbright Collective
• Investing Women
• The Women in Innovation Awards
• Female Founder Office Hours

2. Psychological barriers and bias against women

Two separate Harvard business reviews in 2017 concluded that there was clear bias against female entrepreneurs. Three authors of one of the studies sat in on governmental venture capital decision-making meetings and found the clear and abundant “presence of gendered discourse”.?For example, male entrepreneurs were described as “[c]autious, sensible, and level-headed,” while female entrepreneurs were “[t]oo cautious” and unlikely to take risks. Concerning age, women were “young, but inexperienced” while men were “young and promising.”

These findings were based on observed discussions between VCs to determine decisions for 125 applicants:?99 of whom were male and 26 of whom were female. The women were awarded, on average, 25% of the applied-for amount, while men received 52% of the applied-for amount. The researchers noticed a few disappointing trends in word choice by venture capitalists when discussing women. VCs “question [women’s] credibility, trustworthiness, experience, and knowledge” while describing male entrepreneurs as, “assertive, innovative, competent, experienced, knowledgeable, and having established networks” in the same situations. The men were not actually more experienced; all of the entrepreneurs were similarly qualified, and their pitches were comparable. The only difference was the VCs’ gendered perception of the entrepreneurs.

Our client, Lisa Cluer, managing director of Inside Out Contracts offers the following advice:

‘I don’t think I have ever come?across anyone who directly discriminated against me for being a woman. At least not directly.?That doesn’t mean the journey was always easy, as for any leader you have to break the mould in order to create your own path. There are challenges and hurdles. One of the tactics which I used to combat any bias, was to ignore any stereotypes and just have the confidence to be the individual I am. I usually found once I had engaged in conversation with someone, they could see for themselves that I had substance and was able to understand their business needs.’

3. Fear of failure

British female business owners find failure more difficult to overcome than their male counterparts. More than two-thirds (69%) of female entrepreneurs feel it is difficult to overcome failure compared to 55% of male.?

Teresa Griffiths CBE ARRC, MD of The Drive Project & Retired Group Captain says: ‘You need courage to make it: ‘I never set out to break the bias, but I did. The journey was hard, often lonely and took lots of courage, but it was worth it. My inspiration wasn’t based on how many glass ceilings I could break, but instead, wanting to show that there was an alternative way of leading, thinking and succeeding that resulted in improved outcomes, stronger teams, and a happier valued workforce. It took a long time but slowly I learnt to believe in myself, to embrace my vulnerabilities, to quieten my imposter voice and to always get back up every time I fell. The quote below by Ronnie Oldham became and continues to be my mantra:

“Excellence is the result of caring more than others think is wise,

Risking more than others think is safe,

Dreaming more than others think is practical,

And expecting more than others think is possible”’

?4. Lack of networks and mentors

There is a growing number of all-female networks created to support women in their life-journey.?

Tide Risers, which is a member of the Farringford Legal SME Network is a great example of this.?It offers members a community, a personal learning programme, a leadership programme, annual summit and personal coaching.?Founder, Lara Holliday says: ‘My experience as an executive coach and community-builder specialising in women’s leadership has showed me that a community of support can be the difference between a woman putting herself forward for a promotion or letting self-doubt take over and keep her back. And it can mean the difference between a woman feeling unfulfilled and under-valued instead of empowered to challenge herself and the status quo.?Read Lara’s top tips on how SMEs can help support women in business.

These networks are varied in size, purpose and what they offer their members.?Mentioned in the Rose Review 2022 is Allbright.?Allbright has offered support and a ‘sisterhood’ to women since 2018.?It has a physical ‘club’ in London where you can go and hang out with like-minded women, network and work.?Their digital offering as a toolkit, online events and learning opportunities.

?We Are The City offers resources, advice, events and networking to women working in the city or in tech.?Our founder, Sarah-Jane Butler is a Rising Star of We Are the City, rewarded for her work in championing the female talent pipeline.?

?There are too many networks to mention here, if you wanted to find out more check out Driven Woman’s 20 best women’s networks to help you achieve your goals.

5. Juggling childcare and growing a business

Back to the Rose Report, in the 2019 review it found that women are twice as likely as men to mention family responsibilities as a barrier to starting a business, with rates of women starting business after the age of 35 falling compared to men.

Unsurprisingly, during the Covid-19 pandemic female entrepreneurs with children spent 6-10 more hours on childcare, than their male counterparts. ?One of the positive outcomes of the Covid pandemic has been the increase in flexible working afforded to men (and women) by organisations. This will hopefully overcome some of this imbalance.?But in reality, in many families childcare will always predominantly fall to a mother.

A final word to the Rose Report on childcare ‘We cannot fix the disparity between female and male entrepreneurs without fresh ideas to tackle the challenges posed by caring responsibilities, which still have a greater impact on women in business than on men. Devising solutions to this problem must be a continued priority for the private and the public sector alike in the coming years and has been highlighted as one of the key areas of focus for the Rose Review.’

Supporting women in business

Whilst the number of women owned businesses is continuing to increase, the barriers to many women realising their ambition can still feel insurmountable. There is a still a long way to go before women are treated equally as entrepreneurs. It is vital that as a small business community we pull together to support these women and show them they can do it.?

Our client Nicola Grant from She2 Leadership says: ‘It is critical to share stories of relatable role models widely so that others can see fragments of themselves, as well as be inspired by the voices of strong, ambitious women leading authentically. By consistently demonstrating to the world that female leadership without personal compromise is achievable, the more we accept it as the norm.’

It takes a village to raise a child; it takes a network of support to build a small business. This is one of the reasons that Farringford Legal has created its small business network so that everyone can help each other and get the advice and support that they need. Our founder, Sarah-Jane Butler, understands the struggles that a small business can face but believes that with the right advice and support many female entrepreneurs can beat the bias and defy the odds to show that their ideas and inspiration mean just as much as they do to men and are equally as deserving of support and funding. The opportunities and support that are now available for women means that now more than ever female entrepreneurs can rise out of lockdown and have a real chance of success. ?

Farringford Legal supports small businesses from green shoot start-ups to those which are long established.?Our team of predominantly female talent work hard to support your growing business by getting to know it as well as you do; helping to create the foundations for strong growth.

To find out how our services can help your small business get in touch.

www.farringfordlegal.co.uk | [email protected] | 020 8941 7324