In our 2014 DNA of an Entrepreneur Report, an international study of small businesses, one statistic in particular caught my eye. Of the new businesses started during the recession, over half were started by women.
We were interested to explore the story behind the statistic and understand some of the trends that are impacting on small business owners. Elsewhere in the DNA of an Entrepreneur Report, we found that 12% of the individuals who started businesses in the last six years were previously unemployed, up from 6% for pre-recession businesses.
This data ties in with a 2013 survey by The Jobs Economist that suggests one in seven employees were made redundant between 2008 and 2013. Another interesting stat comes from HR professionals body CIPD, who estimate that the rise in self-employment has compensated for around 40% of the loss in employee jobs.
Take all this data and it’s perhaps not unreasonable to suggest the increase in redundancies and unemployment appears to have pushed more people – and women in particular – into starting their own business. This is despite the fact that women were not disproportionately affected by the recession.
According to the ONS, women make up a larger proportion of those working part-time and, with these jobs in particular being scarce during the recession, women especially (including those returning to work after maternity leave are hit hard. So self-employment becomes another option, whether out of choice or necessity.
A change in lifestyle
Redundancies alone are unlikely to account for the rise in female business owners. Lifestyle choices play a part too. Starting a business that can work around a family or other commitments can be a very tempting option.
The ability to work flexible hours can be an attractive proposition whether you have children or not, and can tempt people away from ‘regular’ employment which often entails fixed working hours. Now that portable devices and good internet connections are ubiquitous, it is easy to work on the go at a time of day that suits you.
Books like The Four Hour Work Week have promoted the idea of flexi-hour working, and shown both men and women that it is possible to run businesses on a part-time basis.
In fact, our DNA of an Entrepreneur Report shows that those who started their business after the recession began (Generation Recession, as we’ve dubbed them) tend to work shorter hours – 59% work fewer than 40 hours a week vs 50% for pre-recession business owners. Only 16% of them work in excess of 50 hours vs 23% of pre-recession entrepreneurs.
Being able to dictate where and when you work can be a real advantage for those who need to juggle children and a job – especially at a time when many families are struggling with childcare costs. Could the working-from-home movement also be driving more women to embrace self-employment?
The role of social media
Another factor could be the growth of social media as a business tool. This infographic from FinanceOnline shows women dominate almost every single social network apart from LinkedIn. They’re also more likely to access social media several times a day (30% for women, 26% for men) and have driven usage of the more visual social networks like Instagram and Pinterest.
This rise in social media has also opened up more business opportunities, ranging from social media management services to launching a small business on a budget where social media is an essential promotional tool. In fact, according to our research, more products are launched now by Generation Recession businesses via social media (52%) compared to pre-recession businesses (34%). The traditional, and costly, methods of marketing a business are no longer a barrier to entry.
One particular area of social media that has opened up new roles is blogging and there are a number of women who’ve gone from hobby bloggers to professional bloggers with their own businesses. Poppy Dinsey, for example, started out by taking selfies documenting her daily outfit choice before going on to create the app and social network WIWT (What I Wore Today), while Kat from the Rock N Roll Bride turned her passion for blogging into The Blogcademy training school. These are just a couple of innovative examples of women turning passion into profit.
The right time and right conditions
It helps that there are now a large number of role models for women in business, such as Marie Forleo and Susan Cain, while the appointment of Veronique Laury at DIY retailer Kingfisher means there are now five female CEOs heading up FTSE 100 companies.
With networking events popping up all over the UK for women, and a wealth of information aimed directly at female business owners, there’s more information and empowering role models for women than ever before.
The wave of influential role models, female-friendly social media and the economy have created a perfect storm for entrepreneurial women to build their businesses and succeed. Our report also shows that the owners of these recession start-ups have the ability to be more innovative, and raise funds easier thanks to methods like crowd-sourcing.
As my colleague Alan Thomas has noted, with banks lending less, potential businesses are forced to think out of the box. That’s no bad thing for the future of business in general. Perhaps with this empowering environment both online and offline, we could see a further rise in the number of women starting businesses.
I’d be fascinated to know your thoughts on this. If you started a business during the recession, let me know your thoughts and stories in the comments or via Twitter (@HiscoxUK).
To read the full report visit www.hiscoxdnareport.com.