Small Talk: Far too few of the entrepreneurs starting businesses are women
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Version 0 of 1. Credit where it’s due. The progress made over the past four years on getting more women into board-level positions in FTSE 100 companies has been good: with 23.5 per cent of FTSE 100 directorships now held by women, as ministers revealed last week, the 25 per cent target set by Lord Davies in his Government-backed inquiry is within touching distance. But let’s not get too excited. Most of those women board members are non-executive directors, rather than operational executives who lead businesses day-to-day. Also, move beyond the FTSE 100 towards smaller companies and the figures look far less impressive: of the 206 board members of companies floated on the London Stock Exchange last year, just 13.6 per cent were women. Outside the quoted company sector, the picture is even less heartening. Far too few of the entrepreneurs who are currently launching record numbers of start-up businesses around the country are women. There has been progress in boosting female entrepreneurship in recent years, but nowhere near enough. The statistics are damning. Just 17 per cent of Britain’s business owners are women. Men are twice as likely as women to be entrepreneurially active, according to the Global Entrepreneurship Monitor report, although this was an improvement on the 2001 figure of two and a half times. And the Government’s figures suggest that just 8 per cent of women are interested in the idea of starting an enterprise, compared with 13 per cent of men. The cost of Britain’s failure to encourage and facilitate female entrepreneurship is high. If women started businesses at the same rate as men do, we would see 150,000 additional businesses launched every year. And since there is evidence to suggest that women-led businesses are often more successful, there is reason to think that many of those start-ups would be even more valuable economic contributors than the businesses we’re currently seeing established. Indeed, a report by Royal Bank of Scotland suggested that boosting female entrepreneurship could deliver as much as £60bn a year to the economy. Boosting it to the levels seen in the US would see the creation of 750,000 new businesses. American women are twice as likely to be entrepreneurially active as their British counterparts, research suggests. The result is that 30 per cent of American businesses are owned by women. The US signed its Women in Business Act in 1988 and is now feeling the benefit of long-term strategic investment in women’s enterprise development. At a federal level, the commitment to women’s enterprise has been unstinting. In the UK, we’ve seen more focus in the past five years, with new programmes to support women, but we remain miles behind. There is even evidence to suggest that banks are less willing to lend large sums to women business leaders. Nor is the Government always prepared to put its money where its mouth is – one survey found that women-owned businesses win less than 5 per cent of public-sector contracts. This isn’t good enough. We should welcome initiatives to boost the number of women in the boardroom at our largest companies. But policymakers agree that small businesses hold the key to sustaining the recovery – and at the moment, small businesses are failing to capitalise on the skills and talents of half the population. There’s no shortage of start-up businesses in Britain, but too many are stuttering. That’s the conclusion of research by Barclays Bank and the Business Growth Fund (BGF). Its biannual index of entrepreneurial activity shows that the number of active companies rose 3.7 per cent to 3.14 million during the second half of last year – the sixth consecutive rise since the index’s launch in 2012. But fewer businesses are achieving higher levels of growth. Barclays and BGF said that high-growth companies with revenues of between £2.5m and £100m a year accounted for 21 per cent of businesses, down from 23 per cent a year previously. Only 39.5 per cent of businesses are VAT registered, down from 41.3 per cent in 2010. This suggests that many start-ups are struggling to get their sales above the £81,000 threshold at which VAT becomes payable. BGF’s chief executive, Stephen Welton. said: “Going from start-up to scale-up takes a combination of targeted policy effort, supporting the management of these businesses, and also improving access to growth financing.” The number of businesses floating on the Alternative Investment Market (Aim) slowed. The consultancy EY said there were just five admissions during the first quarter. In the same period last year, the junior market of the London Stock Exchange saw 16 flotations. This year’s IPOs have also been more volatile performers: shares in the best-performing new issue gained 20 per cent in the weeks following the transaction, while the worst performer was down 38 per cent. David Vaughan, EY’s IPO leader for the UK and Ireland, said: “It is possible that businesses have postponed admissions to later in the year after the post-election dust has settled.” “I’ve been working in the digital space for 15 years, but I can’t claim that Laundrapp was my idea; in fact, when the concept was suggested to me by our chairman, I thought it was a bit bonkers – but I thought about it for an hour or so and began to see there was an incredible opportunity. “The laundry and dry cleaning market hasn’t changed for 40 or 50 years and while there’s been some consolidation on the high street, it’s an industry that has never been touched by digital. We’ve built an app that effectively turns your phone into a remote control for your laundry and dry cleaning – as soon as you need washing, ironing or dry cleaning doing, you place an order on your phone and one of our drivers will come and pick it up. “We think of ourselves as an ‘Uber for the laundry market’ in that this is an on-demand service. We use specialist partners with ultra-modern equipment and have a network of drivers to do pick-ups and drop-offs. “We only launched in January, but it’s going gangbusters. We’ve raised £1.5m from investors to help us scale the business and having started in central London, we now cover all of greater London, plus we’ve started operating in Edinburgh and Birmingham – we’re also looking at a number of other cities. “We’re seeing people book a weekly slot with us, just as they do for their shopping.” |