New study shows only 5.6 per cent of women run their own business in the UK – Crowdfunder launches the first ever female led crowdfunding platform ‘Back Her Business’ to help close this gender gap.
The recent Rose Review, commissioned by The Treasury and executed by Alison Rose, NatWest’s CEO of Commercial and Private Banking, exposed the fact that only 5.6 per cent of women run their own business. Further data shows that women are half as likely as men to start a business: despite the many benefits that self-employment offers, such as flexible working and being able to self-manage their business culture.
The review revealed a gender gap equivalent to more than 1 million fewer female entrepreneurs in the UK. Closing this gap could add an additional £250 billion in Gross Value Add to the UK economy, equivalent to 4 years of economic growth.
What’s holding women back?
In the UK starting a small business is easier than it has ever been. Small businesses now provide almost half of all private sector job opportunities and have helped drive the UKs employment rates to record highs.
Based on the Parento Principle and pioneered by Google, the ‘20% time’ initiative, where employees spend a fifth of their paid working time on their ‘side hustle’, has helped more and more people think about their ‘hobby’ as a business that sustains them. It is widely accepted that the future of work will be one where people have multiple jobs: as a consequence of the ease and profitability entrepreneurship delivers, as well as the challenges AI and disruptive technologies bring to job stability. Multiple jobs give you the flexibility to fluidly move with economic and social changes. According to an HP survey, Agile is the new normal.
However, Rose’s review concluded that “access to funding, risk aversion, primary care responsibilities and perception of skills are among the barriers female entrepreneurs need to overcome.”
Our research at Crowdfunder found fear of visibility, isolation, self-belief and mansplaining(!) were also barriers to women’s progress as entrepreneurs.
At Crowdfunder we have learnt over the last 6 years that…
Women make great crowdfunders
Crowdfunding is an incredibly useful mechanism for understanding world socio-economic trends and predicting future patterns. We had a surge in Craft Breweries campaigns in 2015 and zero waste shops starting in late 2018. In the last couple of years our politically focused awareness campaigns such as Led by Donkeys, Trump Baby, People vs Air Pollution and I am an Immigrant all reflect how disenfranchised people are feeling by politicians.
We started to recognize the link to crowdfunding with female entrepreneurs a few years ago. Although application rates for Crowdfunder campaigns are fairly equally divided between the genders, the success rate of a Crowdfunder campaign is biased towards women, in the last 12 months (up to June 2019) 52% of successful project owners were female. Take into account the bias we see in business where men outweigh women as entrepreneurs by 66%, we can safely say that women make great crowdfunders! There are some other interesting trends in these statistics.
– Female led campaigns tend to pitch for less money. They look at work and life holistically where as men tend to compartmentalize. 2019 research by jobs site CV-Library showed that women are less likely to ask for a pay rise, placing more emphasis on negotiating flexible hours. Women are also savvier with savings and every-day finance. Outside of a mortgage, women have on average £5,000 of debt compared to men who have £8,000.
– Women are more collaborative and happier to ask for help. Over a decade ago The Brain Magazine debated an analysis of the flight vs flight response, concluding that women have a third response, the ‘seek assistance response’, which stems from evolution and women’s need to protect their offspring. Gathering strength in numbers was often their safest protection. Research also shows that women are much more effective in their social relationships.
– Women also learn more efficiently from other successful projects. Our Head of Coaching Sami Mauger explains “Through the coaching support we offer at Crowdfunder, women tend to be much more open to learning from previous successful projects they relate to. They put their egos to one side, gather information, listen and learn from others, adopting the tools they need to bring their idea to life. They value and utilise the community support that crowdfunding offers.”
Crowdfunding supports entrepreneurs
Crowdfunder is now the largest crowdfunding rewards space in the UK. Crowdfunder’s mission is to help people bring their ideas to life. This includes minorities and disparate groups that may otherwise experience more barriers in getting their voice heard. Crowdfunder doesn’t choose what the projects are that people want to fundraise for, the crowd decides by backing the idea. Gender biases are massively reduced. The crowd is in effect ‘the client’.
Crowdfunding is the opposite of how an institution works. Banks provide loans based on a business plan to prove you are financially capable of funding a business. The main reasons bank loans are declined is due to people’s lack of financial stability and in the banks eyes, an inability to repay the loan. At Crowdfunder, the entry point is softer. We back ideas. Then build on those ideas through coaching and mentoring their creators to help the project come alive. This is an invaluable part of the process for women. Helping them feel supported and capitalising on their ability to build effective relationships.
You need courage to crowdfund. You need to be brave enough to say this is my idea, do you like it? You won’t have all the solutions. But the crowd validate the idea and provide free marketing, feedback and a new sustainable market place which is already existing once your idea launches. Total transparency. The Matched Crowdfunding Report 2017 revealed that 91% of crowdfunding project supporters valued the transparency crowdfunding offers. They feel in control of the ROI on their investment. With people losing their trust in institutions around the globe, transparency has become a key value to encourage people to commit to a cause. A recent study of over 200,000 people across 200 countries showed that women are naturally more honest. The author of the study Professor Roger Steare explains “Women prefer to make their decisions based on how it impacts others – which tends to produce better decisions – while men have a more individual approach and are more self-interested.”
The old fashioned bank manager
Crowdfunder is a modern take on the old fashioned bank manager. A person who knew you, would listen and help coach you through a new business idea. That’s why our approachable resource focused platform and team of coaches are a vital part of the process. They help people build their idea and in that process, build their confidence not only in business, but in life.
This is why we have launched Back her Business. The first ever female focused crowdfunding platform. Successfully crowdfunded projects could receive 50% of their fundraising target (max £5,000) in grants from NatWest, Royal Bank and Ulster Bank (regionally dependent). Our aim is to bring thousands of female focused businesses to life in the UK. Back Her Business also offers events, mentoring and coaching support to break down that gender gap and help women deliver their dreams.
Dr Ava Brown launched Chakai Organic Skin and Hair Care on our Back her Business programme “The coaching support Crowdfunder has given me has been invaluable in me marketing my campaign and reaching its potential. It has also boosted my confidence in asking for extra money for a stretch campaign to develop Chakai, our organic skin and hair care range, even further. I am excited for the future and how our business will impact the local economy here in Northern Ireland. ”
Business doesn’t need to be a cold and solitary process.
We are only human after all.