While progress is being made towards gender equality, systemic barriers continue to put women-led businesses at risk, especially in today’s turbulent economic climate.
According to Carolyn Currie, champion of female entrepreneurship and chief executive of Women’s Enterprise Scotland, this risk is creating a trend for women’s businesses to pivot or face failure. That’s what it means.
she says: “We are seeing an unprecedented number of women struggling, so some stores are closing after years of growth, others are moving to a 100% digital model to cut costs. It’s no surprise there’s a store.”
After six successful years, entrepreneur Fiona Douglas has made the difficult decision to close her beloved store. Fiona cited a myriad of factors that contributed to this closure, including the impact of lockdown, the cost of living crisis, rising costs of doing business, supplier disruption and significant rate increases that ultimately proved insurmountable. Masu.
Fiona is not alone in facing these challenges, as many women-led businesses face unique obstacles to differentiating them, especially when compared to their male counterparts. Women entrepreneurs often start at a disadvantage from the beginning, as they start with significantly less capital.
As these businesses grow, securing significant investment becomes a major hurdle and the uphill battle intensifies. Shockingly, despite one in five female entrepreneurs in the UK being female, only 2% of investment funds are allocated to their businesses.
This disparity persisted even during the 2019 pandemic. Research carried out by Women’s Enterprise Scotland highlights this struggle, revealing that 43% of female entrepreneurs were unable to access available grants due to strict criteria.
More than half resorted to dipping into personal savings to keep their businesses afloat. Shockingly, 94% of these entrepreneurs were unaware of competitive grants like the Pivotal Enterprise Relief Fund, so women-led businesses received only 11% of the available funding pool. .
Fast forward to today, and women entrepreneurs are facing increasing costs of doing business.
Recent data reveals that 55% are struggling to recover from rising operating costs, including rising rates, rent and utilities. Despite aggressive measures such as price increases, many people remain in financial hardship.
This financial strain is compounded by the worrying backdrop of flat and stagnant retail sales, as outlined by the Office for National Statistics. These numbers are more than just statistics. These reflect the real impact that the growing cost of living crisis is having on consumers.
Six Acres’ dynamic co-founders Claire McLoughlin and Sarah Stanger are on an entrepreneurial journey to open their first store in April 2022, with the hope that the worst of the pandemic is behind us. started.
Little did they anticipate the relentless challenges that lay ahead, as business costs, especially exorbitant rent and rate increases, quickly made this period one of the most difficult they had ever faced. . “We’ve all heard the mantra bandied about: ‘Survive until 2025.’
These are incredibly difficult times and unless we increase shopper numbers and reduce costs, we will be forced to close,” they said.
Anna Cornwell, founder of Mardy Bum Active Club, found herself at a crossroads when she was 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 has been a noticeable trend away from “ Anna has reduced its product range, closed its Edinburgh retail store and revamped its marketing strategy to align with changing shopping tastes.
Our Beira store in Edinburgh is facing similar challenges. Coupled with rising operating costs, it has experienced a significant 55% drop in foot traffic in recent months.
Now, faced with the prospect of nearly doubling our rent, we have chosen to pivot our strategy and close our brick-and-mortar stores. This decision is a necessary and poignant moment in our journey and represents a bold rethinking of our distribution approach.
This transformational change is driven by a dual objective: maintaining the integrity of the Beira brand while strategically realigning it to dynamic market trends.
By embracing change, Beira is poised to overcome the challenges of today’s retail industry with resilience and foresight. Store closures are not the end, but rather a strategic readjustment aimed at ensuring sustainability and growth.
There is an alarming exodus of independent businesses on our high streets. The challenges facing brick-and-mortar stores are formidable, with operating costs reaching unsustainable levels for small businesses. Speaking at the British Fashion Council’s Positive Fashion Forum, Shadow Labor Secretary Thangam Debonaire spoke about the realities facing fashion brands and retailers.
In response to this, instead of lowering business rates, the possibility of introducing digital rates for online businesses is being discussed. This is a move that highlights the growing awareness of the shift to an online-centric model. So, while the move to digital platforms may bring respite, the looming cost fears of a business crisis suggest challenges will resurface.
The stories and research shared by women entrepreneurs highlight the hurdles women-led businesses face amid economic turmoil and systemic challenges. This journey has been characterized by limited access to start-up capital, constant struggles in securing investment, and inadequate support from grants and funding.
The combined impact of the lingering effects of the pandemic and the costs of the business crisis has increased the trend for women-led businesses to pivot or close their operations.
We need urgent action beyond rhetoric. Significant cash support and policy reforms are essential to remove institutional barriers. We need to foster an inclusive business environment that empowers women entrepreneurs to thrive and fosters a more resilient and fair economy.
If we don’t, we risk losing out on what makes Britain’s high streets great – the small, independent, local and diverse businesses that contribute to the vibrancy and character of our communities.
