Steep decline in the number of women who own businesses

Government research has revealed a steep decline in the number of women business owners, reversing four years of progress.
An annual survey of 7,800 businesses employing fewer than 250 people found that last year only 15 per cent were owned or led by women, down from 18 per cent in 2022 and 19 per cent in 2021.
The decline equates to 43,000 fewer women owning or leading small and medium-sized employers, using the Department for Business and Trade’s estimate of 1.44 million employers of this size. The last time the survey reported female entrepreneurship at this level was in 2019.
The survey found that the percentage of all-male management teams at SMEs remained at 44 per cent of the total, while those where men and women were equally represented in senior management roles had increased marginally from 24 per cent in 2021 to 25 per cent last year.
The findings come a week after Rachel Reeves, the chancellor, lent her support to efforts to make the UK the best place in the world to be a female entrepreneur. Hosting a Women in the economy reception at No 11, Reeves backed the Invest in Women Taskforce, which has calculated that if women started and grew businesses at the same rate as men, it would deliver a potential £250 billion boost to the economy.
Research commissioned by the taskforce also found that businesses led by all-women founding teams received just 1.8 per cent of all venture capital funding in the first half of the year, down from 2.5 per cent for the whole of 2023.
Debbie Wosskow, a serial entrepreneur and co-chair of the taskforce, described the fall in female entrepreneurship as “super disheartening”. She said women’s careers suffered in the pandemic and the decline in women owning and leading small businesses could reflect that impact.
She also highlighted that female business owners responding to the survey were concentrated in sectors such as health, education, arts and entertainment, accommodation and food — areas of the economy that are not typical hunting grounds for investors looking to back small companies to help them grow.
“I don’t want female entrepreneurs to be discouraged,” Wosskow said. “As a founder I want to say don’t give up, especially as women often found businesses that help other women.”
Maxine Benson, co-founder of Everywoman, an organisation that has championed women in business for 25 years, said more work needed to be done to showcase the success of female entrepreneurs to inspire others.
“The more we tell these stories the more women are inspired and gain the confidence to fulfil their career ambitions, advance into leadership, or start, grow, and scale their own businesses,” she said.
“The unique challenges women in business face, such as the role model deficit and funding gap, must be addressed in order to secure the future growth of the UK economy.”
The business department’s annual business survey also showed that there has been little change in the proportion of ethnic minority SME business leaders. The total stood at 7 per cent last year, a similar level to that recorded in 2015.
After Brexit in January 2021, the percentage of SMEs exporting to the European Union has stabilised at 14 per cent of the total, lower than the 16 per cent recorded in 2019.
Despite government attempts to promote trading with non-EU countries, including signing free trade agreements, only 13 per cent of SMEs do so, unchanged since 2019. More companies are targeting the United States and Canada. The numbers of SMEs importing from the EU and the rest of the world has also declined between 2022 and 2023.
The price of energy, levels of taxation and regulations were all cited as more significant barriers to growth than other factors, such as the availability of skilled staff.
The Department for Business and Trade said: “Boosting female entrepreneurship will play a key part in our mission to grow the economy. We’re taking action to reverse the downward trend we inherited, including through our taskforce, which aims to establish one of the world’s largest funding pools with a £250 million pot for female-led businesses.”