Female founder ambitions are being hindered by a lack of finance, according to a report by Small Business Britain, in partnership with Square and Clearpay. The report highlights that although female entrepreneurs show significant ambition, around 57% identify a lack of business knowledge and confidence as barriers to growth, with 39% struggling to secure funding. Despite the desire for independence being a key motivator for women starting their own businesses, with 60% citing it as their primary reason, many face challenges accessing external finance. More than half of female founders (58%) have never sought external funding, relying instead on self-funding. This self-reliance extends to using personal credit cards, as reported by 13% of women entrepreneurs.
Janan Leo, the founder of Cocorose London, exemplifies the challenges faced by female entrepreneurs, having self-funded her award-winning folding shoe start-up with personal income. Leo expressed the difficulty of raising external investment due to feeling intimidated by the finance world. Michelle Ovens CBE, Founder of Small Business Britain, emphasises the importance of supporting female entrepreneurship for the UK’s economic growth. Ovens aims to increase female representation among entrepreneurs from the current 20% to at least 30%, recognising the unique challenges women face, such as a lack of understanding about equity investment and reluctance to share ownership with investors.
The report suggests early interventions to enhance gender inclusion and entrepreneurial success, including improved access to funding, targeted financial skills training, and mentoring for female founders. Despite financial barriers, female entrepreneurs remain optimistic about future growth, with 65% expecting business expansion and 55% already utilising artificial intelligence technology. However, reliance on self-funding remains prevalent, especially among ethnic minority women, with 88% self-funding their ventures.
Rich Bayer, UK Country Manager at Clearpay, highlights the importance of supporting women-led businesses for economic growth and innovation. The report calls for industry support to help female entrepreneurs achieve their potential and contribute positively to the economy. Despite the challenges, female entrepreneurs demonstrate resilience, creativity, and determination, indicating significant opportunities for economic development in the UK.
In conclusion, while female entrepreneurs face hurdles in accessing finance and overcoming confidence issues, initiatives to enhance support and resources for women in business are crucial for fostering entrepreneurial success and economic growth. The ‘Female Entrepreneurship: Moving Forward’ report underscores the need for a more inclusive ecosystem that empowers female founders to thrive in the business landscape.