Challenges and strategies

Building confidence
More and more women increasingly believe that they have the skills to start a business and are going into business in greater numbers. A major barrier, in common with other self-employed people, is building confidence and keeping motivation going through the difficult times. A third of the female population would start a business, were it not for the fear of failure, especially with respect to debt (Global Entrepreneurship Monitor 2003). This is understandable, particularly with the female clients who are likely to be using community-based business advice. Women in the UK are twice as likely as men to be living in poverty, and benefits and tax credits make up 20 percent of women’s income. Over half of women entrepreneurs have responded to this fear of debt and its impact on self-confidence by setting up their business on a part-time basis.

For advice on motivation and confidence see in the Themes section, Motivating your clients and for guidance on debt see Managing money.

Accessing finance
There are significant differences between women’s and men’s ability to access finance and how much it will cost them. A recent UK survey of small and medium enterprise finances found that women were charged more than men on term loans - 2.9 percent as compared to 1.9 percent. Research is ongoing into the factors behind this situation. It has also been found that women generally started their businesses with lower levels of overall capitalisation, or the amount of money invested in their companies, and with lower ratios of debt finance. For women’s business start-ups, the level of capitalisation is one third that of men’s start-up businesses.

Women from black and minority ethnic communities are more likely to source start-up finance from friends and family, being 93 percent for Pakistani women, 52.6 percent for black African and 53.4 percent for Asian other. White people (29.3 percent) and black Caribbean people (38.8 percent) tend to use bank overdrafts as their primary finance for start-up (Global Entrepreneurship Monitor, January 2004).

What are the implications in this for you as their Business Adviser? You will need to be aware that women tend to take a lower risk approach to business. They start smaller with respect to financing, although the loan finance will probably cost them more, and they will often rely on friends and family to help them to start up and support the business. You will need to know about the range of grants and low-cost loans available, and to find out if there are any sources of finance that are specifically tailored to women’s business. Please see the Financing section for more information and a list of specialist resources.

Childcare
Finding good quality, affordable and accessible childcare is a major challenge for women clients with families. It is an issue that you will need to know about, in order to better advise your clients. Most women are responsible for looking after and organising the care of their children. Registered, formal childcare in London and the South East is relatively expensive. Unfortunately, it is not yet tax deductible, so cannot be charged as a legitimate business expense against tax. Clients should, however, be able to claim tax credits to redeem up to 80 percent of the cost of registered formal childcare. For more details on tax credits, please go to the Benefits section.

The creation of Sure Start children’s centres and extended school facilities across the UK will go some way toward addressing the lack of affordable, good-quality childcare options. By 2011, children’s centres will offer a range of childcare choices, from childminding networks to full time daycare for 800 children in a local area. It is intended that every school in England and Wales will be an extended school within the next few years. This will include the provision of breakfast, after-school and homework clubs, supervised play provision and study support. Further details of children’s centres and extended schools can be obtained from your client’s local CIS on 0800 234 6346.

For more guidance on childcare options and choices, please go to Childcare.