Coco, Cookies and 'O'

The Entrepreneurial Gender Gap?

Renee Horne   14th February 2011

What is the link between a designer perfume, scrumptious cookies and the entertainment magazine “O”?  All these are multimillion or billion dollar businesses, all owned by successful women, Coco Chanel, Debbi Fields and Oprah Winfrey respectively. Some like Debbi Fields started her business at the age of twenty, claimed she knew nothing about business but eventually made a recipe for success out of chocolate chip cookies.  So do women know the recipe for success?  In a recent BBC interview, Rebecca Harding, managing director and co–founder of the World Entrepreneur Society stated the “number of women owning growth orientated enterprises has increased from 13.3% in 2008 to 17% in 2010”…. (click here for full interview). Indeed, this positive statistic might illustrate that the entrepreneurial gap might be narrowing between men and women, but with a mere four per cent increase in two years, is there room for improvement?  

 
The Plunge Decision

Starting a business  is a decisive plunge into the unknown and due to the uncertain economic climate, women may question “can my business weather the storm?” Consequently, women are more reluctant to take the plunge.  “Women in the UK are only half as likely to start a business and are more likely to allow a ‘fear of failure’ to stop them and also say they do not have the right skills to start up”. According to Dr. Harding “once they have started up and have grown for at least 2 years, the percentage of women owned high growth businesses dropped”.  Statistics in the US also indicate a similar trend that women do not sustain a high growth business for as long as men. More than 50 per cent of UK start-ups are women-owned businesses. This has been the case for more than a decade, yet the total number of women-owned businesses is only 28 per cent. This seems to indicate that women come in and out of business ownership. Again, stay-at-home mums with a part-time business abandon their entrepreneurial rigour as their children mature. This could be one of the factors why women start up and the business does not flourish when compared to that of men who are rarely stay-at-home dads.  But there is another factor that affects women entrepreneurs?

Cash is King....Capital is King

To start up a business, it will cost you a lot of money, and to maintain that business it will cost you even . To ease this burden we turn to our financial institutions.  But are women a risk for banks? Gita Patel who works in venture capital, argues the point about women being risk averse, “Women are less likely to put their houses up as security”. This is a universal problem from the developing nations of Africa as opposed to the developed countries of the European Union; women who want to set up and run a business are challenged by the access of financial services and products, such as loans. Women have a bank account, but very few have access to the financial resources that are on offer which are crucial in starting up and running a business and to create growth.  As the opening words of this article illustrate, women can succeed and go on to thrive in a male dominated entrepreneurial world, bucking the trend of gender inequality in business but the question is how do financial institutions in countries all around the world perceive women? Do they look at women in a different way as opposed to men? Or are women entrepreneurs who start up their businesses opting for risky sectors? The evidence seems to suggest that things are a lot easier in the UK, but what about elsewhere? (Please, click here to have your say…)