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As the number of women-owned businesses expands worldwide, women can be found at the helm of successful companies in nearly every sector. The number of female entrepreneurs increased by 7 per cent between 2012 and 2014, according to Global Entrepreneurship Monitor’s Women’s Report.
Take Zhou Qunfei, thought to be the world’s richest self-made woman. She was a poor Chinese factory worker who founded Lens Technology, which supplies touchscreens to the likes of Apple and Samsung. Or Kiran Mazumdar-Shaw, who created Biocon, an Indian biotechnology company, in her garage in Bangalore at the age of 25. Or Denise Coates, the English entrepreneur who founded Bet365, one of the world’s largest online gambling sites.
There are also millions of women running small and medium-sized enterprises. Women-owned businesses account for more than 30 per cent of registered businesses worldwide, according to the World Bank, making a significant impact on job creation and poverty reduction.
Many have had to overcome financial and cultural barriers. In some countries, the World Bank says, legislation barring women from owning property leaves them without the collateral needed to secure a loan.
Despite women’s growing importance to national economies, the World Bank says: “Female-owned businesses are generally smaller and employ fewer people and are more likely to be home based.” This raises the question of how much more these businesses could contribute economically if they grew bigger.
In the US, for example, women own 36 per cent of all businesses, according to the 2012 census — up from 30 per cent in 2007. Yet male businesses are more than three times as likely to reach $1m-plus revenue.
However, Patricia Greene, professor of entrepreneurship at Babson College, cautions against a prescriptive view that more women “should be scaling up” their businesses.
“Given that they are women, there is generally the rest of their life that they have to be taking care of. They are creating value in a lot of different ways, such as the value they bring to their family, their community. Their business is part of that, but they generally don’t have the same amount of time to put into it that men do,” she says.
Some women start a business to fit work around children, but cannot put in the hours needed to expand it. Prof Greene says: “Generally the financial aspect is in the top three of their motivations but it’s not usually the first one. It usually is more about creativity, doing something the way they want to do, independence, that type of thing.”
Prof Greene is academic director of Goldman Sachs’ 10,000 Women initiative, aimed at helping female entrepreneurs to access capital and business education, one of a number of global schemes to help women-owned businesses expand.
She says better education is needed for providers of capital as well as women. “If the women understand the business model of a bank, they can plan how to make their businesses attractive to that bank. If the banks better understood the women-owned businesses, maybe they would consider making some changes, rather than always expecting the women to change to meet the banks’ vision of how this relationship should work.”
In the UK, just one in five small businesses is majority-owned by women, according to the government-commissioned Burt report published last year. Sara Carter, professor of entrepreneurship at the University of Strathclyde, says a “concerted and sustained government framework” is needed to support female enterprise.
One question, she says, is “what kind of maternity leave provision is given to women who run a business relative to [those in] employment”. A government review by Julie Deane, founder of the Cambridge Satchel Company, called recently for an increase in the state maternity allowance for self-employed people.
Several studies highlight barriers women face in getting capital. Prof Carter says her research shows that men invest on average three times the amount used by women, but that this is generally a demand issue.
“Maybe women are a little more debt-averse,” she adds. “They are typically poorer, they earn less than men when they start in business.” Prof Carter says better financial education for women entrepreneurs, bank managers and public agencies would help to ensure more businesses were properly capitalised.
Sue Stockdale, who chairs the Women Presidents’ Organization’s chapter in London, says more growth-oriented networks like hers are needed. “One member came along who would say, herself, she was cruising, she thought she had done it all and it was going fine. When she heard everybody’s stories about what they were planning to do and what awards they had gained, she thought, ‘Hang on a minute, I can do more here.’ It inspired her to take some bigger steps with her business.”
She says women approach ambition in different ways to men: a series of small steps may be more effective than setting a big goal.
Ms Stockdale says she would advise a new female entrepreneur “to be thinking more on a month-to-month basis rather than starting with the end in mind. It’s important to have inspiration about what’s possible, but for some people that may put them off. Looking at month-to-month growth and continuously improving is as valuable a way to grow a business as it is to want to make a million in three years’ time.”