New Report Demands Support for Female-Led Businesses

The UK economy could miss out on a £7 billion contribution from female-founded businesses unless they receive more substantial support, according to a new report from EY. The study highlights the pressing need for fairer access to funding and reduced regional and sector imbalances.

New Report Highlights Disparity

The report, which identified more than 240 female-founded and led businesses with revenues between £20 million and £50 million, warns that many of these firms are struggling to break through barriers to growth. With the proper backing, these businesses could evolve into ‘superscalers’ - companies that generate over £50 million. This growth would have the potential to boost the British economy significantly.

In 2022 alone, 45 female-led superscalers contributed £7 billion and employed over 55,000 people. Notable companies among them include beauty brand Trinny London and recruitment firm AMS. However, the report reveals a glaring issue: the disproportionate underfunding of female-led businesses. Women-led ventures receive just 2p for every £1 investment, compared to 84p for male-led companies.

Lynn Rattigan, a senior partner at EY, said: "Systemic barriers to growth are currently holding back too many potential superscalers. Addressing these obstacles would unlock a new wave of highly successful businesses and drive growth, employment opportunities and prosperity for the UK."

The EY report also points to geographic disparities and gaps between sectors, with 58% of potential superscalers in London and the South East. Meanwhile, 44% of these businesses operate in the consumer goods and services sector, highlighting how opportunities for female entrepreneurs remain limited.

These findings echo data from the Women-Led High-Growth Enterprise Taskforce report, which shows that only 18% of high-growth enterprises in the UK have a female founder. In the first half of 2024, female entrepreneurs received just £145 million of the £8 billion investment available - a mere 1.8%.

Sam Smith, the founder of Cavendish Financial, said: “Starting a business is hard, scaling a business is hard, and superscaling is the next stage of the female founder’s growth journey. It requires having a growth mindset, vision and ambition, but also the necessary support to navigate a system that I have seen first-hand does not always work for them.”

While Chancellor Rachel Reeves has endorsed the task force to help close the funding gap, scepticism remains about whether female entrepreneurs will benefit from these initiatives. More decisive action could be required for the UK to harness the potential of female-led businesses fully.

Practical Advice for Female Entrepreneurs

In light of the challenges highlighted in EY’s report, female entrepreneurs must seek support as they grow from start-up to superscaler. Here are some tips to help you break through the barriers:

Network in the Right Places

Building a diverse network is essential. Look for groups tailored explicitly to female founders, such as The Female Founders Forum or Enterprise Nation’s Women in Business. Connecting with other women in business and seeking mentors who understand your journey can provide valuable insights and opportunities.

Know Your Numbers

Funding remains a significant hurdle, and investors expect detailed financials. Make sure you have a robust business plan, you understand your figures, and you can demonstrate your growth potential. This preparation is essential when accessing venture capital or angel investors who may need a greater understanding of your niche.

Consider Alternative Funding

If traditional venture capital feels out of reach, explore alternative funding routes. Crowdfunding platforms, like Kickstarter, have successfully helped female entrepreneurs raise capital. Additionally, grants and competitions such as Innovate UK’s Women in Innovation awards can offer crucial financial support.

Focus on Visibility

Raise your profile by attending industry events, speaking on panels and entering business awards. Visibility helps attract investors and builds credibility with customers, partners and potential employees. PR and marketing efforts should showcase not just your business but also you as an individual.

Build a Support System

Scaling up is demanding, so building a solid team is vital. Seek out employees and consultants who complement your skillset and can take on critical marketing, finance and operational roles. Surrounding yourself with a capable team allows you to focus on strategic growth.

Stick to Your Vision

Some of the most successful female founders have had to show resilience and a clear vision. Setbacks will come, but maintaining focus on your long-term goals is vital.

Key Takeaway

By following these steps, female entrepreneurs can better position themselves to overcome the barriers they face and scale their businesses to new heights. While the system may pose challenges, access to the right support can make all the difference.

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