More women keen to make their own way in business
THE numbers speak for themselves. About 20,500 new UK businesses were started by women in the first three months of 2006, up more than 30 per cent from 15,700 in the same quarter last year.
"It's a pretty sharp increase in that 12-month period," says Clare Logie, director of Bank of Scotland's Women in Business team. "We're definitely seeing a huge uplift, particularly in the US, which we tend to trail here in terms of trends. The number of new businesses started by women in the US between 1997 and 2006 has increased by 43 per cent - double the rate of increase by men.
"I think a lot of it is to do with flexibility, although I hate to use the word. It's about women making decisions about the way they want to run their life and career. There are women in their 30s now getting into seriously senior positions, but I think a lot of them get to those positions and decide there's a real value mismatch with the corporate environment. They want to use their experience, contacts network and everything they've built up over their career, but in a different way - and we think that's a huge market."
Women in Business was set up in 2003 to analyse whether gender made a difference to business creation and growth and, if so, what the bank should be doing to support this, particularly at the start-up and development phases.
Research suggests that women are more cautious about debt and are more likely to rely on personal and family savings rather than institutional and bank finance. When they do approach lenders and investors it is typically well after their businesses are established and relatively robust. The flip side to this is that women entrepreneurs could be restricting their business performance by limiting their investment.
"It's been proven in like-for-like businesses that women use 30 per cent of the start-up capital that men use, so they're undercapitalised and that's going to affect the way they can grow," Logie says. "Women's businesses do tend to grow more slowly than men's, but that means they're building a more stable business and growing in a manageable way."
Caution can be a good thing, but in an ideal world entrepreneurs, regardless of gender, should be funding their business with the amount they need, not just the amount they think they can get. This is increasingly important as business and wealth expectations grow.
"I think a lot of people have this perception that women just run hobbies and are not serious, but the reality is they have big growth aspirations," says Logie.
Women are already accelerating up Britain's wealth league. According to the respected Centre for Economics and Business Research think tank, women millionaires are set to outnumber men within 15 years, boosted by more success in business, longer lifespans and bigger divorce settlements.
At the moment, 46 per cent of Britain's 376,000 millionaires are women but by 2020 the total is expected to have increased fourfold to 1.7 million - with women in the majority at 53 per cent. Around 700,000 businesses in the UK are run by women and responsible for revenues of 130 billion. But start-up rates are traditionally slower. If women started businesses at the same rate as men, the UK would have 150,000 extra new businesses a year.
Entrepreneurs Stephanie Wilson and Kaye Taylor, below, have global ambitions for their Edinburgh-based business, SK Chase, which they set up in June 2003 to launch an online gift voucher service for the hotel industry. The company has developed software which enables hotels to create and sell branded gift vouchers from their websites without the hassle and expense of setting up their own system.
"Our goal is to grow the company significantly to become known as the hotel gift voucher company globally," says Kaye. "At the moment we're providing a technology service to hotels selling gift vouchers through their own or SK Chase's website. The next step is to launch a corporate incentive programme offering luxury independent properties.
"Any entrepreneur running a business has goals and aspirations, and one of the measurements is to be financially successful, but that's not our driving force. We're always trying to stretch ourselves further and create and implement new ideas without the red tape you might have if you were trying to do it in someone else's company."
To finance the business, Kaye and Stephanie remortgaged their homes and borrowed a sum of money, now repaid, from Peter Taylor, chairman of upmarket hotel group The Townhouse Company and Kaye's former employer. In May 2004, SK Chase also won 10,000 of matched funding through the Scottish Enterprise Tourism Innovation Award. Kaye says: "We were quite naive and thought it was as easy as going to the bank to tell them how much we needed. But we realised it doesn't quite work like that."
Private equity house Stargate Capital specialises in financing growing businesses run by women through a fund called Trapezia, a derivative from the ancient Greek word for bank. "The women I'm seeing are very well educated, experienced and successful in their own right," says director Gita Patel. "They often have an MBA, are typically late 30s to early 50s and have a business idea that's been inspired by their own industry. The teams they've picked have CVs to die for and what's really refreshing is that they'll point out the weaknesses and gaps where they want help, not just their strengths.
" They're looking for investment and they understand the responsibility of success from an investor's perspective. Interestingly, contrary to stereotypical thinking, these women want to make shed-loads of money, but they want to do it their way because it's empowering to be in the driving seat."
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