Positive change for women in business is a win for all

While strides towards gender equality have been made, systemic barriers persistently put female-led businesses at risk, particularly against the backdrop of today’s turbulent economic climate.

The risk has led to a trend of female businesses having to pivot or face failure, according to Carolyn Currie, an advocate for female entrepreneurship and Chief Executive of Women’s Enterprise Scotland.

She says: “We are witnessing an unprecedented number of women struggling, so it’s unsurprising that some are closing down after years of growth and others are moving to a 100% digital model to cut costs.”

Entrepreneur Fiona Douglas has made the difficult decision to close her cherished store after a successful six-year run. Fiona points to myriad factors that contributed to this closure, including the impact of lockdowns, the cost of living crisis, soaring business expenses, supplier disruptions and substantial rate hikes that ultimately proved insurmountable.

Fiona is not alone in facing these challenges, as many women-led businesses encounter inherent obstacles that set them apart, especially when compared to their male counterparts. Beginning with significantly less capital, women entrepreneurs often find themselves at a disadvantage from the outset.

As these businesses grow, the uphill battle intensifies, with securing crucial investment a formidable obstacle. Shockingly, despite women representing one in five entrepreneurs in the UK, a mere 2% of investment funds are allocated to their ventures.

This disparity persisted even during the-19 pandemic.  Research conducted by Women’s Enterprise Scotland underscores the struggle, revealing that 43% of women entrepreneurs were unable to access available grant funding due to stringent criteria.

Over half resorted to dipping into personal savings to keep their businesses afloat. Astonishingly, 94% of these entrepreneurs were unaware of competitive grant funds like the Pivotal Enterprise Relief Fund, resulting in women-led businesses receiving a paltry 11% of the available funding pool.

Fast-forwarding to today, female entrepreneurs find themselves grappling with a mounting cost-of-business crisis.

Recent data reveals a 55% are locked in a struggle to rebound from soaring operational expenses, including surges in rates, rent and utilities. Despite proactive measures like price hikes, many still find themselves submerged in financial distress.

Compounding this fiscal squeeze is the concerning backdrop of flat and stagnant retail sales volumes, as outlined by the Office for National Statistics. These numbers are not just statistics; they reflect the real impact of the escalating cost of living crisis on consumers.

The dynamic co-founders of Six Acres, Claire McLoughlin and Sarah Stanger, embarked on their entrepreneurial journey with the opening of their first store in April 2022, buoyed by hopes the worst of the pandemic was behind them.

Little did they anticipate the relentless challenges that lay ahead, as escalating business costs, particularly exorbitant rent and rates, swiftly turned this period into one of the most trying they’ve faced. “We’ve heard the mantra ‘Just survive to 2025’ bandied about.

It is an incredibly challenging time and without increasing our volume of shoppers or reducing our costs we will have to close our doors” they remarked.

Founder of Mardy Bum Active Club, Anna Cornwell, found herself at a crossroads, forced to transition from a traditional retail model to a digital-first approach. Anna said: “Despite our commitment to responsibly sourced, high-quality clothing, customer priorities seem to be shifting away from these values. There’s a noticeable trend of consumers moving from supporting smaller businesses like ours.” Anna reduced her product range, closed her retail store in Edinburgh and revamped her marketing strategy to align with changing shopping preferences.

At our Beira store in Edinburgh, we’re encountering comparable challenges. We’ve experienced a significant 55% decline in foot traffic over recent months, coupled with rising operational costs.

Now, faced with the prospect of our rent almost doubling, we’ve chosen to pivot our strategy and close our physical store. The decision marks a necessary and poignant moment in our journey, signalling a bold rethinking of our distribution approach.

This transformative shift is driven by a dual purpose: preserving the integrity of the Beira brand while strategically realigning with dynamic market trends.

By embracing change, Beira is poised to navigate the challenges of today’s retail landscape with resilience and foresight. The closure of our store signifies not an end but a strategic recalibration aimed at ensuring sustainability and growth.

The high street is witnessing a concerning exodus of independent businesses. The challenges faced by brick-and-mortar establishments are formidable, with operational expenses reaching unsustainable levels for SMEs. At the British Fashion Council Positive Fashion Forum by Shadow Labour Secretary Thangam Debbonaire addressed the realities confronting fashion brands and retailers.

In response, instead of lowering business rates there have been discussions about potentially introducing digital rates for online businesses — a move that underscores the growing recognition of the shift towards online-centric models. So, while transitioning to digital platforms may offer respite, the looming spectre of the cost of business crisis suggests challenges will resurface. 

The narratives and research shared by female entrepreneurs highlight the hurdles faced by women-led businesses amidst economic turmoil and systemic challenges. The journeys are characterised by restricted access to start-up capital, persistent struggles in securing investments and inadequate support through grants and funding.

The compounding impact of the cost of business crisis, coupled with the lingering effects of the pandemic, is driving a trend of female-led businesses pivoting or shuttering operations. 

Urgent action is required beyond rhetoric. Substantial cash support and policy reforms are essential to dismantle systemic barriers. We must cultivate an inclusive business environment that empowers women entrepreneurs to thrive, fostering a more resilient and equitable economy.

Otherwise, we risk losing what makes British high streets fabulous: the diverse array of small independent local businesses that contribute to the vibrancy and character of our communities.