Women are catching up with male entrepreneurs. The latest figures suggest that
the ratio of male to female business start-ups has changed from 2.5:1 a
couple of years ago to 2:1. But this still leaves women lagging far behind.
So what’s the problem?
“Women are far too modest about asking for finance,” says Dr Rebecca Harding,
managing director of Delta Economics, which researches entrepreneurial
activity. “Men talk up their business plans, promising tenfold growth of
investment capital over a few years. Women predict doubling or trebling
growth. Women also put in less of their own money. This can signal lack of
confidence in the venture.”
Herta von Stiegel, executive chairman of Stargate Capital Investment Group,
which raises money for businesses led by or serving women, says the problem
goes deeper. “It’s predominantly men making the decisions and they don’t
always recognise a good entrepreneur or a good product, especially if it’s
female-focused. There’s a lot of cross-referral and co-investment and if
you’re not part of the network it can be difficult to access.”
Women are also less likely to stay in business: 25% of their start-ups close,
compared with 20% of men’s.
Nevertheless, the 620,000 businesses majority-owned by women generate a total
turnover of £130 billion a year.
Gwyneth Fleming says she “felt invisible” when trying to raise finance for her
cleaning company, despite having set up a similar business that generated
turnover of £4.5m in five years. Fleming, 57, used £100,000 of her profits
for the venture, Renfrew-based GS Associates, in 1999. “I had an overdraft
facility of £50,000 but it wasn’t enough to grow the business.”
It took three years to graduate from her local bank branch to the commercial
team and secure a flexible overdraft to pay wages. “Working with someone who
understands your objectives and is with you every step is the biggest thing
to get right,” she says. With 400 outlets, 3,500 employees and a UK-wide
client base, turnover has grown from £4m to £25m in the past five years.
Sharon Munro became managing director of Glasgow-based Barrhead Travel in
November after leading a buyout of the company founded by her father 33
years ago. She plans to increase turnover by 25% to more than £100m this
year. January bookings were 30% up on last year.
To fund the buyout, Munro, 33, raised a bank loan of “some millions” and put
in an unspecified amount of her own money. She owns 75% of the shares. The
company has nine shops, with three more planned this year, 350 staff and
130,000 customers a year.
Having her father on hand until he switches from semi to full-time retirement
later this year is fantastic, she says. “But I have to make the decisions,
so it’s up to me to question all the advice I’m given.”
Von Stiegel believes a lack of networking and mentoring opportunities hampers
many female entrepreneurs. But help is available to overcome this problem.
Clare Logie is director of HBOS Women, Bank of Scotland’s full-time unit
dedicated to encouraging and supporting female entrepreneurship.
“We see women entrepreneurs as an emerging market and we want them to come
forward, particularly those who want to grow their businesses,” Logie says.
HBOS Women provides networking opportunities at public events. Seminars and
lunches are held three or four times a year in partnership with
organisations such as the London and Glasgow Chambers of Commerce and the
British Venture Capital Association.
Orb International
Karen McBride, with her colleague in marketing, Michael Smith, spotted a gap
in the market 14 years ago. “With no Scottish-based firms selling
promotional branded goods, we were always buying from English companies. We
thought, ‘Let’s do it ourselves.’ ” That was before her son, Oscar, was
born. With his arrival, all the problems of trying to achieve a work-life
balance had to be faced and overcome.
Back in 1994, with a bank overdraft of £100,000, McBride and Smith founded
Glasgow-based Orb International. “Within a couple of years, clients were
asking for bespoke branded products,” says McBride, 39, left.
She and her husband, also called Michael, take it in turns to look after
Oscar, now four. “If I didn’t have the support of my husband and family, it
would be impossible for me to commit to the business,” she says. “I’m making
sacrifices now to reap rewards in the future, which I hope will mean
spending more time with my family.”
She expects the firm’s annual turnover, £4m last year, to reach £10m within
five years.
