WOMEN ENTREPRENEURS USE SMART THINKING TO FIGHT RECESSION
Women entrepreneurs are using innovative and flexible ways to avoid debt and survive the recession, making them more positive about coping with the economic crisis than men, according to a national Women’s Enterprise Task Force (WETF) report.
The report was commissioned to illustrate the effects of the recession on women’s enterprise in the UK. It showed that such things as accessing procurement in the private and public sectors and using flexible employment contracts to avoid high overhead costs are helping to ensure the sustainable growth of women-owned enterprises.
Commenting on female entrepreneurs in the recession, Pam Alexander and Dr Glenda Stone, co-Chairs of the Women’s Enterprise Task Force, said: “Many women-owned enterprises have low debt and controlled overheads, enabling them to attract new business and be optimistic about their sustainability in a difficult economic environment.”
This optimism was reflected in the report. A survey performed between August and November 2008 found that, while two-thirds of men are worried about the current economic environment, the figure for women was just over half. Similarly, nearly 50 per cent of male entrepreneurs were concerned about cash flow compared to fewer than 40 per cent of women.
The WETF report shows that women are fully aware of the difficult environment that they are working in, but many of the female case studies surveyed did not have high levels of debt. Instead, they were using flexible employment contracts to avoid high overhead costs, which meant that their revenues and sales were increasing. The fact that these female entrepreneurs operate in competitive sectors, such as retail and services, makes this low-cost, low-debt model attractive to larger companies who are looking to source from cheaper and more flexible suppliers.
Despite this optimism among female entrepreneurs, the research also highlighted that many women still operate and work in sectors which are most vulnerable in the recession. However, the report shows that women in these sectors are not being disproportionately affected compared to men.
Whilst recognising that the data in this current economic climate is volatile, the Task Force believes there are lessons to be learned. Accessing finance programmes, such as the ASPIRE women’s co-investment fund, and seeking procurement options, are ways in which female entrepreneurs can save money and face the recession with more optimism.
Women are only half as likely as men to set up businesses, with only 13.6% of entrepreneurs being female. Similarly, although 16% of all UK companies are owned by women, just 3% of all corporate and public sector contracts are awarded to women-owned businesses. However, despite this under-representation, it is estimated that women’s enterprise currently contributes £130 billion per annum to the UK economy.
The Women’s Enterprise Task Force believes that women’s enterprise can be one of a number of enablers for economic recovery. The WETF is therefore calling upon private and public sectors to support women in business during the recession by providing clearly targeted support through access to finance and procurement opportunities.
Notes to Editors:
The Women’s Enterprise Task Force was established by Gordon Brown in 2006, in order to advocate for and increase the quantity, growth and success of women’s enterprise in the UK. Task Force members view women’s enterprise as one of a number of key enablers of economic recovery that requires tailored and continued support from both Government and the private sector.
The Women’s Enterprise Task Force priorities include gender-disaggregated business data, access to finance and technology, women-friendly business support, supplier diversity in public and private sector procurement, and positive promotion of women-owned business issues in the media.
Regional Development Agencies across the UK provide targeted help to women entrepreneurs and women thinking of starting up a company. Business Link, a business support service funded by the RDAs, and supported by government departments, agencies and local authorities, offers real and local help for businesses online, by phone and face-to-face.
During the past months, Real Help Now for Business and more recently Real Help Now for Women have demonstrated the Government’s commitment to helping businesses in the recession. In addition, a number of Regional Development Agencies have taken inspiration from the successful US Women’s Business Centre model, launching regional pilots providing tailored business support to help women entrepreneurs to start and/or sustain their businesses.
Women starting up in business will tend to provide a more immediate contribution to the economy as around one in five women come into self-employment from unemployment compared with around one in fifteen for men.
The ASPIRE women’s co-investment fund was launched by Minister for Economic Competitiveness and Small Business, Baroness Shriti Vadera on Women’s Enterprise Day in November 2008. The fund is being managed by Capital for Enterprise. For further information, visit: http://www.capitalforenterprise.gov.uk/files/Aspire%20Fund.pdf