Small businesses are the backbone of every economy – and behind many of them is a female founder. They are usually mothers, with children aged 18 or under, who’ve often made the leap from full time employee to fully fledged entrepreneur to create a better work life balance for themselves and their families.
Often referred to as ‘mumpreneurs’ – these women, collectively, are driving the UK’s economic growth. According to a report published by think tank Development Economics, these power women generated £7.2 billion in revenue for the nation in 2014 and supported over 200,000 jobs. By 2025, the mum economy will generate £9.5 billion for the UK and add even more employees to their books.
From retail shops and management consultancies to booming empires, female founders are making an impact across sectors – while also raising children.
But why are we still labelling women as mumpreneurs? Is this really necessary?
After all, men who start their own companies aren’t referred to as ‘dadpreneurs’ and many would argue that the term ‘mumpreneur’ is rather patronising and limiting.
The report Shattering Stereotypes from the Centre for Entrepreneurs, claims many women overwhelming prefer terms such as “founder” or “business owner”.
Indeed, the time has come to move away from labels – and to call mums that run businesses by what they truly are – entrepreneurs. The next step is to support them more on their scaling journeys.
Compared to male-owned companies, female entrepreneurs face unique challenges – the biggest being capital-raising. Women are less likely to get funding from VCs or a loan from a bank, despite the number of women entering the business world.
Women launch over half of new businesses in the UK – yet very few grow those business to more than £1m turnover. They simply can’t get the financial support to scale – even though it’s a well-documented fact that female entrepreneurs generate a better return on investment than men. Yet with so few female VCs out there to help stamp out sexism and bias in the investment world, the lack of funding offered to women remains an ongoing problem. And the lack of investment leads to budget constraints that prevent founders from getting the staff they need to manage business growth.
Building a support network that can facilitate networking opportunities and introduction is also frequently cited as a challenge.
Add to the mix the issue of staying cash flow positive and trying to get clients to pay on time – and you wonder how women could put up with the trials and tribulations of going out on a limb and setting up a new business.
Fortunately, many female led businesses are finding a light at the end of the tunnel with new fintech innovations that are offering different ways of raising money and managing daily operations.
Crowdfunding platforms, for example, are providing a lifeline for female entrepreneurs – while also democratising the investment landscape and making it easier for women to invest in companies – including female led businesses.
Meanwhile, digital invoicing is helping to chase payments automatically, taking the hassle away from the entrepreneur – while our own digital cash management platform is helping business owners find the best savings vehicles for their deposits with a click of a button – without the hassle of paperwork or the need to hire a treasurer to do the work.
An increase in mentoring programmes and government grants are also offering an extra boost to female entrepreneurship, but there’s still a long way to go before women are on the same level as their male counterparts.
At the very least we owe it to the economy to do more to champion female leaders in business. The extra billions earned for the nation’s coffers would secure the future prosperity of our country – while playing a crucial role in helping to close the unacceptable gender gap in business.