More and more women are starting their own businesses following redundancy
What does a woman do when, out of the blue, comes the news that her job is being axed and she has, through no fault of her own, become yet another redundancy statistic?
For over 1,000 women who will find themselves in this plight every working day this year, there’s often only one practical answer - they’ll pick themselves up, dust themselves down and go into business on their own.
Never have so many women been eager to become their own bosses after the shock of redundancy. Start-ups by women have grown nearly 40 per cent in the past five years, according to NatWest figures, and they now account for more than a third of new businesses.
By the end of the year women are expected to make u
p over a quarter of self-employed people in the UK, in charge of over a million businesses and generating a total turnover of over £130 billion a year.
“Women are at last beginning to crack the glass ceiling that has previously stopped them from realising their full business potential,” says Judith Meyer, a Bristol small business economist. “But, compared with men, they still have to battle against huge odds to succeed. It is still very difficult for a woman to be taken seriously by the business world, particularly by banks when finance is involved.”
“Women are far too modest when asking for money,” confirms Dr Rebecca Harding, managing director of Delta Economics, which researches business trends. “Men talk up their business plans, but women are more realistic. Women usually put in less of their own money and this can signal a lack of confidence in the venture.”
Herta von Stiegel, executive chair of Stargate Capital Investment Group, which raises money for businesses led by women, says that the problem goes deeper: “It’s predominantly men making the decisions and they don’t always recognise a good business prospect, particularly when it’s female focused.”
This is confirmed by a recent London Business School report, which claims that: ‘Women are often seen by financial institutions as running businesses as a hobby rather than as a serious proposition.’
And Judith Meyer says the situation can often be summed up by the case of a women who visited her bank to arrange finance for her new business and was greeted by the manager standing by the still-open door saying: “Is your husband parking the car, dear?”
Gwyneth Fleming knows exactly what she means. She says she felt invisible when trying to raise money from the banks to set up her cleaning company, GS Associates. It took three years to graduate from her local branch to the bank’s team of commercial specialists, who realised the business had great potential and finally agreed to a realistic overdraft facility that allowed the company to grow. Since then GS Associates has expanded dramatically and now has a turnover of over £25 million.
Studies have shown that age is no barrier to women who want to go it alone after being made redundant - six out of 10 are over 40 and two out of 10 are in their fifties or older. And the good news is that 80 per cent of post-redundancy businesses started by women are still operating four years later.
Says NatWest Business Banking: “Our research shows that businesses started by older women have a far higher chance of surviving.”
“Women are more likely than men to start businesses for personal fulfilment and satisfaction, not just for the money,” Judith Meyer says. “They also have lower expectations when it comes to turnover.”
Almost a third of women starting post-redundancy businesses this year will go into retail, and a quarter into the finance, professional and property sectors. So if you’re a woman planning to start a business after redundancy, there have never been more organisations anxious to give you a helping hand.
For instance, everywoman (www.everywoman.co.uk) is now a leading online network and resource provider dedicated to supporting woman in business. Says co-founder Karen Gill: “Women setting up in business often previously worked for large companies and don’t know where to go for advice. We don’t make it easy for women to start businesses in this country. In America half of all start-ups are run by women.”
Another new initiative women can turn to is Promoting Women’s Enterprise Support (www.prowess.org.uk), which offers an information service, members’ events and seminars in conjunction with banks and government agencies. While the scheme doesn’t provide money to set up a business, it advises women on where finance is available and how to raise it.
New businesses started by women redundancy victims and guided by Prowess include an agency booking professional musicians, an ice-cream manufacturer, a soft furnishings business, dyslexia treatment centres, a stage school, landscape design and a chain of internet cafes.
Women are also branching out into businesses that were traditionally male dominated. For instance, Jane Elliott, 38, set up her own Wiltshire thatching firm four years ago with a loan - since repaid - from a private investor.
“You have to be fit and active, but there’s no reason why a woman shouldn’t be a thatcher,” says Elliott, who previously worked for five years with a male thatcher in Norfolk. “People still sometimes think it’s a bit odd when a woman turns up to do the job, but I’ve never had any complaints about my work.”
And redundancy victim Kate Hartley went from local government in Wales to plumbing six years ago after discovering that there was a national shortage of trained plumbers. After completing an NVQ plumbing course and working for a year with a local tradesman, she went on her own - and has never regretted it.
“I’m really busy,” she says. “I could work 24 hours a day if I wanted to. I really enjoy it.”
Jill Kennedy also raised eyebrows when she became a carpenter in West Yorkshire after 15 years in a Leeds bank. “I faced redundancy once before, so I had already given thought to an alternative career,” she says. “My father had done woodworking as a hobby and I had always been fascinated by it. I always wanted to work for myself, although it was very hard starting on my own - and I had to overcome a lot of prejudice about a woman doing carpentry.”
Now Kennedy employs three male carpenters and is considering a move to bigger premises.
Judith Meyer is certain that, given the chance, women make excellent bosses: “A big part of management is listening and women are more likely to be aware of problems because they listen more. They are also less likely to get involved in office politics.
“Maybe I’m biased, but as I see it the more women bosses we have the better it is for business.”