We know it’s not very British to talk about money; but this month, it is important for us to do so, if you’re thinking about starting your own business.
If money was no object, would you like to run your own business? What kind of business would it be? What would your regular customers look like? Could you see yourself doing something through your business to help other people?
If only money was no object… right?!
It wasn’t too long ago, when women were unable to apply for a mortgage without a male guarantor….Only a generation ago. Which means there are still men within the industry who built their career on this mindset, when they first started working in the 1960s and 70s. We no longer need to have a man help us apply for finance, but for many women, the barriers around being able to source funding, continues to hold them back – as does unconscious bias within the industry.
Is this a real issue, or just more ‘feminist drama’?
Unfortunately, this is a very real issue. A report in 2019, identified there is – unsurprisingly – a global gender gap when it comes to funding female entrepreneurs. To the tune of £1.3 trillion. So, it’s little wonder the Alison Rose Review of Female Entrepreneurship commissioned by HM Treasury, highlighted finance as one of the biggest barriers for women wanting to start their own business.
According to the Rose Review, women have less access to funding than men, which comes down to a number of contributing factors:
- For the average woman, her starting capital is 50% less than men’s.
- Not many women personally know an entrepreneur, compared to men. Why does this matter? You must have heard the phrase ‘it’s not what you know, it’s who you know’? Having reduced connections is proving to limit women’s access to contacts with potential funding leads.
- Only 13% of UK investment teams are women. And shockingly, a massive 48% of investment teams were found to have no women at all.
This was reflected in the findings of a study by The British Business Bank:
- Female-led businesses received less than 1% of UK venture funding, compared to 89% received by male-led companies.
- In lay-person’s terms, every £1 of UK venture capital investment can be attributed:
- 1p to all-female founder teams
- 89p to all-male founder teams
- and 10p to mixed-gender teams
When we look at these figures, it feels like the odds are completely stacked against you making your dream business a reality. No wonder many of us lack confidence when it comes to understanding what financial opportunities are available to us.
The impact of this doesn’t just affect you. It’s also impacting the UK economy.
By holding back women in this way, the UK loses out on seeing new businesses from forming, which would be able to help the UK economy to grow – worth about £250 billion, according to the Rose Review.
Which is why the Government’s response to both the Rose Review, and the British Business Bank’s findings has been a drive “to boost women’s economic participation… Harnessing more of women’s entrepreneurial talent could be the greatest opportunity for economic growth in the 21st Century. Progress will not happen automatically and we must take positive action.”
OK, so what does this mean for me?
You, and your new business, are valuable to the UK economy. You’re worth more than you realise! Even more so as the UK will need to recover from the impact of the 2020 pandemic, as we come out of lockdown and restrictions.
In 2019, the Government launched their Investing in Women Code, to which they encouraged organisations to pledge their commitment in “support of female entrepreneurship in the UK, by improving women’s access to the advice, resources and finance needed to build a business”.
Signatories includes banks (and EWiF Ambassadors) like NatWest, Lloyds and RBS, as well as venture capital firms and angel networks – a full list can be found here. These are organisations who are committed to helping you discover your options, when it comes to funding a new business.
Now, let’s discuss how to reduce the risk of funding your new a business
As a not-for-profit organisation, we at EWiF are committed to encouraging women to find their business tribe, with the support of franchising. We have enjoyed seeing many women, like you, discover the joy of running a franchised business of their own.
This is because franchising:
- Gives you a business model which is already proven to work
- Provides you with the training and support around all aspects of running a business
- Is filled with inspirational role models who are successfully managing to balance the running of their businesses, around their family and other commitments.
When it comes to financing a franchise, the good news for you is this: Banks and business lenders prefer to finance a franchised business because they already know you can be successful. Many franchisors have connections with High Street banks, or franchise finance lenders, and can help you find the right funding option for you and your situation.
What’s more, many of our Ambassadors have been able to pay off the loan much sooner than anticipated, because by following the business model and being driven to see their business do well, they’ve enjoyed a healthy return on their investment.
What are you going to do, now?
So, let me take you back to the question I asked you at the beginning: If money was no object, would you like to run your own business? If the answer this is, YES, then what are you waiting for?
With over 900+ brands across franchising, in almost every sector you can imagine, your opportunities are vast, regardless of which industry you want to work in.
For further support around your finance options, you can either speak to your chosen franchise about who they would recommend, or see who our EWiF Partners and bfa-approved consultants are, and arrange a conversation.