The three biggest barriers to 'be your own boss' female entrepreneurs revealed

Female entrepreneurs are being held back by poor access to funding and financial training, as well as a lack of confidence, as they launch and attempt to scale up their businesses, new research today suggests.

The study by Small Business Britain, in partnership with Square and Clearpay, examines the challenges that women business owners face, and explores how entrepreneurial growth and inclusion can be boosted across the UK.

Despite significant ambition among female entrepreneurs, nearly three in five (57 per cent) cite a lack of business knowledge and confidence as barriers to growth, with 39 per cent noting that securing funding is a major challenge. The report found that more than half of female founders (58 per cent) have never taken out external finance, with almost four in five women (79 per cent) self-funding their start-ups and 13 per cent even relying on their personal credit cards.

Promise Okoye is the Glasgow-based founder of D'lux Gift Box.

The in-depth research, which consulted more than 1,000 female entrepreneurs, revealed that a desire for greater independence is the biggest driver for women starting their own businesses, cited as the primary reason by 60 per cent of women.

The study, entitled “Female Entrepreneurship: Moving Forward”, pinpoints the urge to “be your own boss” as a key motivator behind the rise in the number of female entrepreneurs across the UK during the last six years, but also suggests the desire for financial freedom may create a reluctance by female founders to take on debt or outside finance. Half of those surveyed said they did not understand enough about equity investment and almost half do not like the idea of an investor owning part of their venture.

Michelle Ovens, founder of Small Business Britain, which supports the UK's 5.5 million small businesses through a series of campaigns, networks, training and reports, said: “Encouraging and supporting female entrepreneurship is essential for the UK’s economic growth. But, with women accounting for just over 20 per cent of the UK’s entrepreneurs, their numbers still lag behind that of male-led businesses and we want to see this representation rise to at least 30 per cent in the coming years.

“To do this we need to understand, recognise, and directly address the distinct challenges female founders face and the reasons why they tend to start businesses - notably a want for independence. This drive can also put women off taking on debt, and is often combined with a broader lack of confidence around finance and business skills among this group that can be hard-wired from a young age.

Janan Leo founded Cocorose London, a sustainable women's footwear brand.

“We need to improve the ecosystem for female founders to encourage more women into entrepreneurship, as well as reaching female-led start-ups at an early stage with the right training, tools, and advice to help them succeed,” she added.

Promise Okoye, the Glasgow-based founder of D’lux Gift Box, which curates self-care gift boxes, said: “Easier access to finance would have really helped me, but as I was a start up, I didn’t know where to go or how to look for finance. Some support to access loans or even telling me what options there were would have been so helpful, but because it wasn’t there, I just funded the business myself.”

Janan Leo, who launched her award-winning footwear venture, Cocorose London, in 2007, is another example of a successful entrepreneur who self-funded her start-up as a side-hustle using personal income from her salary.

“Money was incredibly tight and there were days when I sacrificed lunch,” said Leo. “Despite this, I persisted with boot-strapping because raising external investment was completely out of my comfort zone and I felt intimidated by the finance world.”

The report proposes a series of early-stage interventions to boost gender inclusion and entrepreneurial success, including creating more accessible funding and producing targeted financial skills training, as well as mentoring and advice for female founders. Small Business Britain also runs the successful “f:Entrepreneur” campaign that celebrates and supports a large community of female founders across the UK.

Despite the financial barriers that women face, optimism about future growth and ambition for technological adoption was strongly reported among female entrepreneurs, pointing to “significant economic opportunities” for the UK that could be expanded further, Small Business Britain noted.

Just under two thirds of women (65 per cent) expect their businesses to grow in the coming year, with two fifths anticipating a 20 per cent rise in income. Female entrepreneurs are also particularly open to embracing new technology, with 55 per cent currently using artificial intelligence (AI) and 21 per cent planning to do so in the next year.

Samina Hussain-Letch, executive director and head of industry relations, UK, at software specialist Square, said: “This research brings valuable insights into the challenges and opportunities for women business owners in the UK. From funding difficulties, to limited access to networks and resources, female entrepreneurs often encounter unique hurdles on their journey to success.

“Despite these barriers, women demonstrate resilience, creativity, fresh perspectives and unwavering determination. Now is the time to develop support, tools and solutions that help female entrepreneurs to truly achieve their full potential, enabling more growth and opportunity which will contribute to the economy.”

A reliance on self-funding is particularly prominent at an intersectional level, with 88 per cent of ethnic minority women depending on their own funds to start-up and scale and many reporting that finance is both hard to come by and often not seen as a viable option.

Rich Bayer, UK country manager at payments provider Clearpay, said: “Female entrepreneurs are a driving force within the UK’s SME sector, contributing significantly to economic growth, innovation, and local communities. It’s vital for industry to help these small firms grow and provide the guidance they need to thrive in today’s rapidly changing business landscape. This will not only benefit society as a whole, but will inspire the next generation of women-led businesses.”

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