Claire McCartney joined the CIPD (Chartered Institute for Personnel and Development), the professional body for HR and people development, in 2008 as Adviser, Resourcing and Talent Planning. She is responsible for research exploring different aspects of effective talent management strategies and manages the Institute’s Resourcing and Talent Forum and she also co-manages CIPD’s Employee Outlook research. The CIPD has over 130,000 members internationally – working in HR, learning and development, people management and consulting across private businesses and organisations in the public and voluntary sectors.
“…The female entrepreneurs that we spoke to tend to be more motivated by work which gives them a sense of purpose than by becoming wealthy. However, they do need to be economically viable and many are motivated by having the space and freedom to progress their business ideas in a way that is not possible within the corporate environment…”
At the CIPD, through our recent research series on entrepreneurship, we have been exploring the world of female entrepreneurs, the impact they are making on the economy and their unique approaches to leadership and running their businesses.
This is a very important issue for both society and the economy. Not only do we need to focus on opportunities for women to progress in the corporate world and to remove the barriers that stop them from doing this, but we also need to recognise the huge contribution that female entrepreneurs can make to the small business sector and UK plc. To quote the Government’s recent response to the Women Business Council’s research, ‘there is an enormous potential in women’s untapped entrepreneurialism and a strong case for providing more support for women who want to set up their own businesses.’
Official figures from the Global Entrepreneurship Monitor (Kelley et al 2011), show that there remain more male than female entrepreneurs in the UK. (Men are around twice as likely to be entrepreneurially active as women.) In fact, if women were engaged in entrepreneurial activity at the same rate as men, there could be an extra 1 million female entrepreneurs (Women’s Business Council, June 2013).
However, there are signs in recent years that female entrepreneurs are on the rise. A growing number of women in the UK are setting up on their own, according to figures released by the Office for National Statistics in July 2013. These showed that there were 1.25 million women in self-employment, including business owners, from March to May 2013. This was 19% higher than the same period in 2008, compared with growth of only 4% in the number of self-employed men.
Interestingly, research featured in The Times in early 2013 (a sample of 2,000 clients for Barclays Wealth and Investment Management,) shows the pay gap that is experienced in corporate life is reversed in start-up businesses, with women financially outperforming their male counterparts by 14% (£55,000). There is also evidence from Simply Business (Hall 2010) to suggest that female-owned businesses are less risky – with potentially a greater eye on sustainability and the long term. (Female-owned businesses cost insurers 60% less in pay-outs, male-owned firms are more likely to fail than female-owned, male entrepreneurs were forced to shed more staff in recession.)
Female entrepreneur practices that work
We spoke to 20 different female entrepreneurs working across different sectors and professions and at different stages of developing and running their own businesses. Some of the practices that seemed to work across the group included:
Focusing on purpose and autonomy
The female entrepreneurs that we spoke to tend to be more motivated by work which gives them a sense of purpose than by becoming wealthy. However, they do need to be economically viable and many are motivated by having the space and freedom to progress their business ideas in a way that is not possible within the corporate environment. They are aware that the effort and hours that they will need to make will be substantial but have the autonomy to do this on their own terms.
A self-financing approach
Our interviewees have a clear understanding of the financial side of running a business and bringing in the expertise in this area where needed. The tendency among our interviewees was to take a self-financing approach to their businesses and not to carry unnecessary debt. Some of the female entrepreneurs that we spoke to focused more on an incremental growth strategy where they built up their businesses in a gradual way.
A personal and relational style of marketing
Our interviewees recognised the importance of good relationship management with customers, clients and employees and they took a direct and personal approach to this. Often business generation came through word of mouth, personal referrals and smart networking with like-minded people. Many were also protective of the integrity of their brands and knew this was their core differentiator in the marketplace. They enhanced their reputations by entering awards and securing kite marks.
Our interviewees demonstrated great business awareness and acumen, being alert to new opportunities to keep their business unique in line with customer expectations. They are not blinded by their own success and have a clear awareness of their own strengths and weaknesses and where they need other people’s expertise. They were able to identify common problems and work on solutions as part of their business models.
Continuous learning and awareness of skill sets
The female entrepreneurs who we interviewed skilfully and deliberately make use of corporate experiences, connections and exposure to business leadership to shape their own business acumen. They have a massive appetite for continuous learning and are self-auditing on their skill sets and recognise the importance of coaching and mentoring and actively build a support network around themselves.
Recommendations for policy
Observations from our interviews with female entrepreneurs point to the need for greater support in the following areas:
•Greater support and advice, particularly around financial business planning.
•Support to help female entrepreneurs grow their businesses. It is at the point of growth where access to funding is probably most critical. Female entrepreneurs appear wary of carrying debt, normally financing their own set-up costs. The Government could alleviate this fear by enabling financial provisions designed as a stepping stone to growth.
•Franchising is one route to growth and more information about good practice in this area would be beneficial for female entrepreneurs.
•There should be greater provisions of entrepreneurial and business skills from an earlier age through the education system. Beyond specific training for entrepreneurs, there needs to be better access to vocational courses.
•Female entrepreneurs recognise the importance of keeping their skills constantly updated. Accessible, flexible and low-cost opportunities to help them do this and facilitate continual learning would be invaluable.
•Our interviewees spoke about the importance of having realistic, not just celebrity, female entrepreneurial role models to learn from and boost their confidence in making the transition into business.
The contribution that women can make to the world of work is enormous and it is a serious loss to the corporate world when they elect to leave it, but the appetite they have for creating their own businesses and adding value to the economy and society needs to be greatly encouraged and supported, in the ways outlined above.
The CIPD’s purpose is to champion better work and working lives by improving practices in people and organisation development, for the benefit of individuals, businesses, economies and society. Our research work plays a critical role – providing the content and credibility for us to drive practice, raise standards and offer advice, guidance and practical support to the profession. Our research also informs our advocacy and engagement with policy-makers and other opinion-formers on behalf of the profession we represent.
To download our research report: Inspiring female entrepreneurs, please visit: http://www.cipd.co.uk/hr-resources/research/inspiring-female-entrepreneurs.aspx