At Small Business Britain, we work with an incredible community of female founders who educate and inspire us every day. However, this is relatively unusual in the business community, which is dominated by male-led businesses—close to 80% in the UK.
It has been encouraging to see an upward trend in the numbers of female entrepreneurs in the UK since 2018, rising from 16% to 20%, according to UK Finance. As an organisation it is one of our missions to see this further rise, to at least 30%. This is not just important from an equality perspective, but with female entrepreneurs currently contributing £116 billion to the economy, according to the Federation of Small Businesses, there is clearly a massive economic opportunity for the UK too.
All the Women, Independent
I am asked a lot about why women do not start businesses more, but for me the more interesting conversation is around why women do start businesses, and what they are doing with them once they do.
Our new report, ‘Female Entrepreneurship: Moving Forward’, in partnership with Square and Clearpay, digs into this trend, finding strong optimism about future growth among female entrepreneurs. Almost two thirds (65%) expect their businesses to grow in the coming year, which points to a really encouraging upward trend.
The women I know, work with and speak to every day have a real fire for entrepreneurship, and it is driven at its heart by a desire for independence, freedom and control. Our research found that 60% of women started their business to ‘be their own boss,’ fuelled by the self-determination that comes from being the decision maker, and taking charge of their own destiny.
Yet while women are increasingly embracing entrepreneurship, they are bringing with them their own way of looking at the world and addressing challenges. And to truly capitalise on the huge potential of female founders, we must seek to understand and address the unique challenges they are facing in their business journeys too.
Financial Confidence
Within the ‘Moving Forward’ report, we found that female founders need targeted support – financial and otherwise – to help grow their businesses in 2024 and beyond, and flourish.
In our survey of over 1000 female business owners, a significant barrier to business growth that women are facing is financial confidence.
Nearly three in five (57%) report that a lack of business knowledge and confidence slows their progress, and 39% find it difficult to secure the external funding they need.
This is even more true among ethnic minority female founders, where there is a big gap in access to finance. Women share that this lack of confidence goes back to school and is often embedded in how they see business and their motivations today.
Over four in five (88%) of female founders started their business with their own funds, with many reporting that finance is both hard to come by and often not seen as a viable option.
This is a significant trend in our research—women often rely on their own funds and resources when they start out, 58% still never having accessed any external finance at all.
There is a strong feeling that debt can be perceived as negative, rather than a way to facilitate growth. And given the drive for independence amongst business owners, this is perhaps not surprising.
So we see huge opportunity here for training and peer-to-peer support, to give women greater confidence in making strong financial choices for their businesses. If women can see that (good) financing can be great for business, they will unlock a level of growth that would not be possible simply with personal finance.
Future ambition
There is, however, more trust and engagement around embracing new technology, which is being used widely to free up time and maximise results from marketing efforts. AI is contributing to sales, marketing, digital channel growth, content creation and much more.
Over a third (37%) of women say AI is helping with marketing and 33% say AI is saving them time, with huge potential to engage even more with the technology in the near future, especially as women are able to access more training and knowledge in this area.
The need for improving skills goes beyond AI—women often report that their skills can feel ‘frozen in time’ from the point when they start their business, which is usually when they leave employment and lose access to more structured training programmes. Women are particularly looking for more support in sales and marketing (39%), business planning (25%), overall business confidence (19%), and financial literacy (13%).
To address all of these challenges and ensure female founders can grow their businesses, creating flexible, accessible training specifically for female founders is critical, with a focus on financial literacy and business management training.
Women supporting women
Women also need community and network support, in the form of mentoring programmes with female founders specifically in mind, as well as flexible networking opportunities to give women a platform to share experiences and resources with peers.
And of course, though female founders are adopting new technologies readily, they would benefit from practical technological adaptation and digital literacy training that employs concrete examples of AI use to improve efficiency and marketing.
Empowering women with the relevant skills, technology and support in financial confidence can be transformational not just for female founders, but for the whole UK economy. The passion, focus, creativity, inspiration, collaboration and growth that will come from this will be a guiding light for all businesses.
It is why I am hugely optimistic about the future of female entrepreneurship. If we can properly support and inspire women to make the jump into starting their own business, and give them the tools they need to succeed, we have an incredible future ahead of us economically and as a society.
