Challenges for female entrepreneurs

The Gender Index, launched in 2022, found that just 17% of active companies were led by women, a number three and a half times smaller than the 2.7 million male-led companies.

But why is this?

We’ve rounded up a number of challenges female entrepreneurs face with getting their start-up off the ground as well as some possible solutions.

1. Access to finance

Female entrepreneurs often face systemic obstacles when seeking investment into their start-up and around a third of women say access to funding is the biggest barrier they face to becoming an entrepreneur.

Fewer female entrepreneurs apply for loans or overdrafts than male entrepreneurs.

In 2021, only 13% of women-led businesses applied for a loan or overdraft versus 51% of their male peers.

This can often result in lower amounts being asked for, and subsequently being granted, from lending providers.

In 2021, the average loan approved for a female-led business was £51,300, under half (£107,300) of what was secured by male entrepreneurs, though some of this can be explained by sector and size differences.

This lower amount of investment can lead to additional issues such as attracting the right employees and finding the right business premises, and can even impact work/life balance, as, with fewer resources, more of the burden can fall on the entrepreneurs themselves.

The Alone Together: Entrepreneurship and diversity in the UK report found that turnover for female entrepreneurs’ businesses is a third of their male peers and productivity was less than half.

Slowly but surely though, this barrier is being overcome.

In 2021 the approval rate for women applying for a loan or overdraft reached 90%, almost the same as the male rate (92%).

Helping to drive this is the government’s Investing in Women Code, an initiative recommended by the government-commissioned Rose Review, led by NatWest CEO Alison Rose, into how best to boost female entrepreneurship.

The code sets out commitments to support women entrepreneurs by improving their access to the tools, resources, and finance they need to achieve their goals.

So far over 160 financial institutions have signed up to the code including high street banks, Angel investment groups and venture and growth investors.

If you’re looking for funding to start your business, then consider joining the over 40,000 female entrepreneurs who have already applied for a Start Up Loan.

Open to businesses aged three years or younger, A Start Up Loan is a personal loan with a fixed interest rate of just 6% – far lower than most business loans.

You can borrow anywhere from £500 to £25,000 and repay over a period of between one and five years meaning you can tailor the loan to your business needs.

2. Societal norms

Given the large difference between the number of male and female entrepreneurs, starting a business and being a business owner can often feel like a masculine thing to do.

These internalised social norms can hold women back from taking the leap and becoming their own boss.

However, that’s starting to change.

In 2021, Tide found that 18% of women had considered starting a business and with ever larger numbers of female entrepreneurs finding and running their own businesses – there are plenty of role models out there.

Having somebody to look up to who understands your motivation and experiences can be incredibly inspiring.

If you’re looking for a female business role model, consider joining a women’s mentoring program – this is a great space to find people who are willing to advise, share tips, and help make your dreams a reality

When you take out a Start Up Loan, you’ll automatically qualify for 12 months of free mentoring from a range of business experts.

A mentor is a sounding board to help you develop your own confidence, knowledge, and skills.

They aren’t there to tell you what to do, or even how to do it, but to help you make the right decision for yourself.

3. Imposter syndrome

Often due to the societal norms we talked about above, female entrepreneurs can feel like they lack the confidence needed to start or grow their business.

The Rose review found that only 39% of women are confident in their capabilities as an entrepreneur compared to 55% of men, despite the actual gap being non-existent.

If you’re constantly worrying that your accomplishments as a business owner are undeserved, or that somebody might expose your true self one day, then it’s likely you’re suffering from Imposter Syndrome.

Imposter Syndrome is often defined as feelings of inadequacy that persist despite evident success or to put it another way, it’s the gap between who you perceive you are and who you think you need to be to become a successful entrepreneur.

If you feel like you’re struggling with Imposter Syndrome then you’re not alone, research from Natwest has shown that 60% of women who considered founding their own business didn’t pursue this dream due to a lack of self-belief.

26% even stated it as a reason for not making the transition to another career.

The personal nature of a start-up can also be a big factor in Imposter Syndrome as rejection is taken far more personally when you’ve poured your heart and soul into a product.

Avoiding self-sabotage is a key step in overcoming Imposter Syndrome.

Signs you could be self-sabotaging your business can include:

• Discounting your product or services before being asked
• Not putting yourself forward for awards
• Trying to market to everyone for out of fear that you can’t turn anyone away
• Undervaluing your products, services, or business relative to the time and effort taken to create them
• Not asking for the right amount of investment to properly grow your business
• Being pushy when trying to attract new business
• Not asking for help or outsourcing tasks.

By avoiding these pitfalls you’ll be on your way to boosting your confidence in your business and yourself as its owner.

4. Feeling alone

With women still firmly in the minority of business owners, it can often feel isolating with a lack of places to turn.

Indeed, according to the Rose review, women were 55% more likely than men to cite fear of going it alone as a primary reason for not starting a business.

However, with more and more women deciding to start their own businesses, a whole host of networks have been created catering exclusively to female entrepreneurs.

We’ve put together a short list below:

AllBright

AllBright is a supportive and inclusive community connecting women from all over the world.

AccelerateHER

AccelerateHER is on a mission to empower female-led tech businesses and start-ups, striving for gender balance in the technology sector.

Business Woman’s Network

The Business Woman’s Network brings together female business owners from all corners of the UK, connecting them at inspiring events so they can grow their business and find new customers.

British Association of Women Entrepreneurs

A not-for-profit network of female directors and founders, BAWE has supported women in business for the last 50 years. Members have access to events and the FCEM World Congress of Women Entrepreneurs – a global platform to showcase their products and services.

Everywoman

Everywoman is the global platform connecting women, businesses and organisations, offering a unique blend of content that is both inspiring and informative. Founded in 1999, Everywoman offers webinars, workbooks, training, and the Everywoman Awards to showcase female business excellence.

Female Entrepreneur Association

With the aim of helping women build successful businesses, the Female Entrepreneur Association has a global membership of 650,000 across more than 67 countries and represents 500+ industries. Membership provides access to a global online community of female founders, courses, and business development training.

Female Founders Forum

Barclays and The Entrepreneurs Network have united to create a UK organisation that connects inspiring female entrepreneurs with those who are ready to take their business up a notch. Through a series of nationwide events, members are given the opportunity to learn, connect and grow.

Female Founders Rise

The goal of Female Founders Rise is to see more women start, grow, make an impact, and generate revenue in their businesses.

The organisation aligns itself with UN Sustainable Development Goal (no 5) to achieve gender equality and empower all women and girls.

Fund Her North

Fund Her North is a volunteer-led collective of over 30 women working in venture capital, funding organisations, and angel groups. These members are based in the north of England and bring a combined investment power of over £650 million to back female-led start-up businesses. In total, their investments have provided more than £160 million to female entrepreneurs in the region.

Prowess

Prowess is an online hub offering a variety of support and resources for women-led businesses, from inspiration and advice to funding opportunities. It’s completely free to use and provides articles, directories of local female business networks, and tips on finding and arranging funding.

Women in Business Network

Launched in 2005, WIBN caters to UK smaller business owners and entrepreneurs, offering them to build strong business relationships with other women.

Women Mean Biz

An established network of businesswomen and entrepreneurs working in organisations of all sizes from across the UK.