Sources of Finance for Female Social Entrepreneurs
It’s all very well having big ideas to save the world but where do we get the money from to help us?
In the context of this ‘new covid normal’. I’ve just spent the last few weeks filling in grant funding applications which I think we are unlikely to get (not covid specific or disadvantaged enough); searching for speculative Trust funding opportunities (bit of a long shot) and scoping out social investment options (looks promising but my Board not keen to borrow money). Alongside marketing and delivering new online packages for my services, as a way to pivot from place-based freelance contracts.
I’m not alone in finding finance a challenge right now.
As access to finance is one of the main barriers to finance for female social entrepreneurs, and although there has been progress the gap remains, partly due to a lack of diversity among investors.
A third of businesses globally are now owned by women – a figure that is only growing. But frustratingly, despite performing equally alongside male entrepreneurs, female-led businesses continue to receive less funding than those headed by men at every stage.
“In the UK, only one in three entrepreneurs is female – and they receive less than 1% of venture capital. Why, and what can be done?” said NatWest CEO Alison Rose said during the recent Women’s Entrepreneurship Day, updating us on recommendations and progress from the Alison Rose Review of Female Entrepreneurship.
From their detailed research they believe the biggest opportunities to help female entrepreneurs fall in three areas:
- Increasing the funding directed towards them;
- Greater family care support; and,
- Making entrepreneurship more accessible for women and increasing support locally, through relatable and accessible mentors and networks.
As the Here & Now Report states, up to £250 billion of new value could be added to the UK economy if women started and scaled new businesses at the same rate as UK men. Even if the UK were to achieve the same average share of women entrepreneurs as best-in-class peer countries, this would add £200 billion of new value to the UK economy.
Women have been hardest hit by covid job losses and the increased childcare responsibilities which have come with it. So can entrepreneurship be an answer to this ‘new normal’ for many?
Unless we provide proper support, which includes easy access to finance, it’s going to continue being a struggle. With women restricted to running micro and small businesses, which don’t require capital investment.
Liverpool Council recently came up with an enlightened plan to help address this: ‘Policy Actions to Build Back Better for Women’s Enterprise.’ Proposals to address the gaps in COVID19 enterprise support for women in business, include; Allocation of Grants, Loans & Investment, by: Ensuring Small Business Grant Funds reflect the nature of women-led purpose driven businesses, such as those working from home premises. As well as ensuring rigorous monitoring to negate the impact of gender bias.
However in the absence of easy to find investment, here is my advice for things you can do right now.
My 6 top tips for finding finance for female social entrepreneurs
- Create and manage a good Budget to understand what you really need. A good cash flow forecast will provide you with a clear picture about your actual financial situation. What you definitely need and which areas are more flexible. It is good practice to operate as leanly as possible, while still investing in the structures and development which you need in order to deliver your vision. I can recommend two excellent books, which both advocate for this; The Company of One; Why Staying Small is the Next Big Thing and The Lean Start-up.
2. Keep up to date with the Grant Funding opportunities available Grants are non-repayable funds – or ‘free money’ – disbursed or given by one party, often a government department, corporation, foundation or trust, to a recipient, often a nonprofit entity, educational institution, business or an individual. They are a great way to run pilot projects and get your social business off the ground. Check via search engines and register for alerts to your inbox Grants online, Funding Central
3. Join an entrepreneur network These networks support social entrepreneurs to develop sustainable solutions to social problems through courses and workshops. They have a strong focus on peer-support and inspirational input from social enterprise experts. Their programmes often also come with grant funding too. eg. School for Social Entrepreneurs, UNLTD, Entrepreneurial Spark
4. Check out Social Investment opportunities. These are loans, however may come with a blended mix of grant too. Social investment is the use of repayable finance to help an organisation achieve a social purpose. Charities and social enterprise can use it to help them increase their impact on society, for example by growing their business, providing working capital for contract delivery, or buying assets. Check out Good finance.
5. Try a crowdfunder This is a great way to get your business or new product off the ground. Crowdfunding is a different way to raise money for good ideas. People are increasingly bypassing more traditional funding routes such as bank loans or grants and turning instead to the people around them and in their community to support their venture. Check out the purpose-built platforms and businesses which are set up specifically to host them. e.g. Crowdfunder Kickstarter Justgiving
Another thing to consider is getting the business support you need to help you stay focussed and available to all opportunities.
Alison Rose, chief executive, NatWest Group, said: “One of the most striking findings from the Rose Review was that women are less likely than men to know other entrepreneurs or to have access to sponsors, mentors, or professional supporter networks. For female entrepreneurs, and the UK economy to truly prosper, this balance must be reset.“
So my final tip is to get a coach or a mentor. A business mentor who can help guide you and give you confidence to scope and get investment for your business. Currently there are few free programmes set up to match you with a mentor, although perhaps you can just ask around your network or ask someone you admire?
Good luck and remember to stay focussed on your big vision, as well as developing a detailed action plan, to help you get there.
Also believe in your ability to deliver it and find the resources you need, when you need them.
If you would like some support developing your business idea would you like a free copy of my ebook ‘Top 50 Tips for Female Social Entrepreneurs’ DOWNLOAD HERE.
Also there is still time to join my next start-up course – ‘Set up your own Successful Sustainable Business’ – 3rd – 18th December. BOOK HERE or email me if you would like to find out about upcoming courses next year [email protected] @TraciLewis79