Tomorrow in the UK, the Woman’s Hour programme on the BBC’s Radio 4 launches a new thread titled “Women in Business”, which will follow the fortunes of three women entrepreneurs and their mentors. It follows recent reports of a large increase in the number of women starting businesses from home.
Between 1997 and 2007, reports the US Department of Commerce’s Economics and Statistics Administration, businesses owned by women grew twice as fast as those owned by men.
Not all women are starting businesses on their own. Direct-selling operations in which women develop their own door-to-door sales businesses are booming. For example, Tupperware Brands Corporation, the plastics manufacturer, reported an annual sales increase of 6 per cent last year compared with 2009 and a company record high of 2.6m direct sellers.
Five days ago, Avon Products, the skincare and cosmetics company that is the world’s biggest direct seller, announced a 4.5 per cent increase in its quarterly dividend.
Last year, Saudi Arabia’s Direct Selling Association reported that 40 per cent of Saudi women were working from home, many taking advantage of online channels to market and sell products internationally.
Currently, 75 per cent of the UK’s 4.8m small businesses are run by men, but new research suggests three in five young women now want to work for themselves. Written by Dr Alexandra Beauregard, a lecturer at the London School of Economics and Political Science, and commissioned by Avon Products, the study surveyed 2,000 young women aged 16 to 24. Roughly 72 per cent said they would like to be their own boss and 76 per cent said they believed the job market had reached saturation point and that setting up their own business was a realistic alternative. The research predicts that the number of women entrepreneurs in the UK will double to 2.5m by 2040.
There are plenty of reasons to see why this might be a trend: growing numbers of women need to supplement their families’ diminishing incomes or combine childcare at home with earning, and more women are being squeezed out of a contracting job market. There is also the possibility that of all those women who fail to make it into the top two layers of corporate management, some direct their skills and energies into starting operations of their own.
Survival rates of businesses owned by women are relatively good – but they typically fail to grow as fast or as big as those run by men. One much-debated reason is their very small share of venture capital. Since one of the mentors on the Woman’s Hour programme is Gita Patel, co-founder of Stargate Capital – a fund manager focused on supporting women-owned businesses – it will be interesting to see whether these three entrepreneurs can buck the trend.