Research and Recommendations

Context

The research undertaken by Scottish Enterprise in 1999 is part of an ongoing programme of work to improve understanding of the issues faced by women in business and to improve the content and quality of the services and support we and our partners deliver. The research feeds into our policy and programme developments and helps to influence service improvements. Many of the issues raised by the research have already been addressed in new programmes and initiatives launched over the course of this year. And we continue to undertake research and consultation to ensure we are aware and respond to the needs of our customers.

Introduction

In the summer of 1999, a study of women's enterprise in Scotland was commissioned by Scottish Enterprise and undertaken by the Department of Marketing, the Firm and Entrepreneurship at Strathclyde University. The purpose of the research was to assess the motivations and issues of women entrepreneurs, to gauge the effectiveness of business support environment in relation to the needs of their clients and to make recommendations on how best to encourage and support these businesses in the future. Below is a summary of the report.

Methodology

The research consisted of in-depth interviews held with female entrepreneurs running small, medium and large businesses. It included business in a wide range of sectors both manufacturing and service and it covered businesses across the whole of the Scottish Enterprise geographic area. In addition, analysis of the Labour Force Survey provided statistics about the numbers of women in self-employment across the last decade.

Number and Trends of Women in Business

In the ten-year period from 1990 to 1999 female self-employment grew by 6,830. In the last four years of this period, the share of female self-employment in Scotland grew from 25.78 percent to 26.67 percent. Looking further into these statistics, even more encouraging trends can be found: a mean annual increase of 19.06 percent for female self-employment, compared with 4.73 percent for male self-employment.

However, given that 73.33 percent of all self-employed business people in Scotland are male, there is strong evidence of a large untapped pool of potential female entrepreneurs - and these women can make a significant contribution to Scotland's future economy.

Presently, female led enterprises contribute strongly to the Scottish Economy. In 1999, there were a total of 116,085 VAT registered businesses in Scotland. If women account for 26.67 percent of these businesses, it would suggest there are around 31,000 women-owned VAT registered businesses.

So why are there not more female-led businesses and what are the barriers and issues facing women who want to start or grow a business?

The Potential for More Women's Enterprises

Scottish Executive has a target of encouraging 100,000 new firms in Scotland over the next ten years. Given the large untapped pool of potential entrepreneurs that women represent and the growing number of women in the workforce, it is reasonable to suggest that female entrepreneurs can play a significant part in achieving this goal.

The Hurdles

• Natural cautiousness - There is evidence that women often impose greater restraint on the amount of finance they use to get their venture off the ground (often less than their male counterparts). Research also indicates that women are naturally more conservative, both in financing and growing their business. Women tend to operate and develop their businesses in a different format to those run by men.
• Access to finance - Women generally have less financial resources, it is recognised that they own less, they still tend to earn less and they inherit less. So women often see start-up grants as an important mechanism in helping get their business off the ground. However, the administration of these grants can be viewed as burdensome.
• Financial Management - Studies also demonstrate that women are wary of accumulating debt to fund new developments and fuel growth. This attitude to finance has led consequently to slower and more incremental growth among female led businesses.
• Personal skill shortages - problems in acquiring skilled labour and a lack of marketing, sales and management knowledge were among the most popular examples cited as issues that blocked business development and growth among businesswomen.
• Discrimination - Some women perceive they are discriminated against in the business ownership process. This issue should be viewed in the wider context of cultural and societal barriers to entrepreneurship.

It is generally acknowledged that Scotland's economy needs a higher number and broader range of individuals to expand its entrepreneurial base. The business support organisations, both public and private sector have a responsibility toward improving attitudes in Scotland and the economic development organisations in particular can ensure that their policies and programmes are gender positive and seek to support all sections of the market.

The Recommendations of the Report

The report provides recommendations to help create, nurture and develop more female-led enterprises.

Advice and Assistance

1. Training and support should have a consistent level of quality across both business support organisations and private providers of business advice
2. Business advisers need to be better trained to meet the needs of the firms they service, and advisers should be more carefully matched to the businesses they assist
3. Assistance should be available for women who need a more 'hands-on' approach to writing a business plan
4. It would be highly advantageous for women at growth stages in their business to be linked to similar, more established firms from which they could learn. A higher level of communication and connectivity is required to enable such a process
5. The enterprise network and wider business advisory community should be mindful of the differences that exist in female-led enterprises and design and develop services and training to meet the specific needs of women entrepreneurs
6. Women need to be assured that they are receiving the highest quality of business advice and help. To provide this assurance, public sector agencies performance could be demonstrated by their participation in the Charter initiative.
7. After-care services should be more fully developed. A telephone/e-mail information point could be established to enable entrepreneurs to phone in, irrespective of their location and be directed to the support agency that best suits their needs

Start-Up Training Programmes

1. Provision for female specific training programmes need to be more widely available, particularly at the start-up phase. And there needs to be more choice and greater accessibility nationally to such assistance. Once women are in business their requirements can be addressed more adequately through the mainstream services.
2. After-care schemes, such as peer mentoring are seen by many women as a useful and innovative form of ongoing support, once formalised business skills training has ceased.
3. There is a need to review the mainstream provision of training and consider how it reflects women's experience and requirements.
4. More effective promotion of business start-up programmes should be encouraged to ensure higher awareness amongst women.
5. Publicity needs to emphasize female 'success stories', which act as role models for other potential female entrepreneurs
6. In recognition that many female businesses operate initially on a part-time basis, training and support packages should be flexible in their delivery to suit client needs. Weekends and evenings could be offered by providers
7. Previous training programme participants, e.g. new businesses, should be encouraged by the training providers to share their experiences on new start-up programmes, to act as examples of new and 'live' cases
8. Business advisers should be aware of, and address the issues of business capitalisation that particularly concern women
9. Business advisers should be aware that the creation of a business plan can seem to many women like another hurdle, and as such should provide practical help with completing it

Single-Sex Training

1. Female specific training is most helpful at start-up stage and should address specific areas such as motivation, confidence building, IT and capitalisation
2. Single-sex training programmes were highly supported by those who had participated on these and their continuation should be encouraged and offered more extensively
3. Advisers should be aware that women come into business ownership from a variety of backgrounds and experiences and that as such, some women will require greater nurturing of self-confidence, esteem and general business skills
4. ICT is considered by many women as an area of significant importance but it is also seen by many as a potential barrier to growth. Despite the increasing emphasis on the need for IT skills the numbers of women acquiring and developing IT skills have been declining in the last decade. Single-sex training can provide an opportunity to deal with specific skills issues, such as developing the skills for e-commerce, e-marketing and Internet business start-up

Widening Access

1. It is acknowledged that not all women require women-only training, but for those that do, the experience enables them to more easily participate in future mainstream programmes
2. A special need exists to provide services to women who live within socially and economically deprived areas. Social enterprise projects are shown to offer a route into self-reliance, self-confidence and ultimately, self-employment. Greater appreciation and acknowledgement of the results these programmes yield needs to be understood and accepted by business professionals
3. The language of business can create an additional barrier for some women and can serve to reinforce the 'gap' that exists between their experiences and the business 'norm'. Advisers and the wider business community should be sensitive to this situation

Finance

1. Because women are more reluctant to take on large sums of debt when starting a business it can have a negative effect on growth prospects
2. The Microcredit project operating in the West of Scotland was seen as beneficial to entrepreneurs, for both the funding it provided and the accompanying peer-mentoring and support arrangements. As such this initiative should be extended to other areas of Scotland and can be beneficial to both male and female prospects. It should be recognised that business support and training in conjunction with the money improved the overall impact and value of the programme.
3. Caution and counselling needs to be offered to women starting from a weak financial position and due care taken to ensure their position is not worsened by their desire to become self-reliant
4. Because grants are often fundamental in attracting potential start-up businesses, fresh approaches need to be considered to remove the burden associated with administration and to make grants/loans conditional on recipients attending advisory or counselling services
5. Compared to men, women earn less, have less collateral and inherit less. These factors influence the low amounts women are prepared to borrow when starting a business. These issues and resulting attitudes need to be addressed by advisers when planning and implementing pre-start training

Growth and Development

1. Care should be taken by enterprise agencies and professional business advisers when allocating mentors. The study shows that many women found that male mentors were often out of touch with their needs and requirements and frequently patronising.
2. Many women believe that innovative after-care schemes, such as peer mentoring, are effective, both in terms of increasing motivation and self-confidence and in providing more personalised support
3. Greater clarity and communication is required regarding the criteria that must be met for funding and other sources of support. The current situation is seen by many women as a further barrier to growth and development
4. Criteria for growth funding need to be more flexible in nature and not tied into pre-determined growth targets, such as employee numbers. Enterprise agencies and grant bodies should also be mindful of the rate at which female owned businesses tend to grow
5. Enterprise agencies and those business organisations supporting the growth of female-led businesses should take account of the particular profiles of women owned businesses and not seek to enforce male norms when developing high growth support criteria

Long-Term, Sustained Initiatives

1. There is a need for the business support organisations to adopt a strategic approach to developing initiatives geared specifically to meet the needs of businesswomen
2. To bring about radical improvement in the start-up rate of women-led businesses, radical approaches are required. By developing new approaches defined by client need, the environment will improve not only for women entrepreneurs but also for other non-traditional groups entering business ownership

Equal Opportunities

1. It is recommended that business support organisations and professional advisers engaged in providing training, support and advice undertake to monitor the level and type of service given to both male and female business owners. This will ensure equitable practice and will also protect these organisations from any potential inaccurate accusations.