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The Changing Face of Entrepreneurship
Over the last few decades there have been many changes to the world of work including the rapid increase in migration to the UK and the growing number of women joining the workforce. At the same time the number of businesses in the UK has grown rapidly (from 3.5 million in 2000 to almost 6 million today).
As someone who advises business owners, Peter Mardon, Commercial Director examines what WSP Solicitors have seen change and what further changes to the business world we should expect in the future.
The current state of business ownership in the UK
Only about a quarter of businesses employ someone, meaning about 75% of businesses are a sole self-employed individual. Large employers, being those employing 250+ employees, comprise just 0.1% of all private sector businesses in the UK. So large businesses are being steadily replaced by small businesses and the self-employed and although Covid 19 has arrested this trend it looks set to continue.
Just 16% of SME employers (businesses with less than 250 employees) are led by women, with 24% led equally by women and men and the balance (60%) led by men. So men still dominate.
Just 6% of SME employers are minority ethnic group led (what the Government calls “MEG-led) whereas ethnic minorities comprise roughly 15% of the total UK population.
So, in very broad terms, women and ethnic minorities tend to be under-represented in business ownership.
What might be the causes of under-representation in business?
There are many routes to business ownership and many of these may have disadvantaged, and may still disadvantage, women and ethnic minorities.
For example, family businesses based on generations of history are more likely to be white families from when the UK was overwhelmingly white ethnically and so there is greater generational wealth. First or even second generation migrants to the UK will not have the same business and financial legacy and history in the UK. For women, the not too distant history of women being the only or main child carer so allowing men to more easily pursue careers and business ownership opportunities has played a large role and numerous studies indicate other reasons.
Reports by Government and the FSB also indicate that ethnic minority entrepreneurs are more likely to be detached from mainstream business support and access to finance; that women tend to be more risk and debt averse; and that both ethnic minorities and women suffer from actual and perceived discrimination.
What might the future of entrepreneurship look like?
I was recently corrected by a female colleague when I suggested that business ownership and entrepreneurship requires confidence and that in my experience, on average, men are more confident (often over confident) of their abilities whereas women, again on average, are under-confident of their abilities. The colleague, again based on her experience, disagreed and felt that women of her (younger) generation were just as confident as the men. For me, this was a lesson! Indeed the Corporate department within WSP Solicitors is 3:1 women to men and more and more of our clients are women and ethnic minorities.
Empathy or understanding of the needs of customers is an important business skill. Therefore, might not the increasing buying power of women be more accessible to female entrepreneurs than their male counterparts? Looking at consumer needs from a new perspective may lead to the development of new business solutions.
Also new ways of doing business including so-called disruptors seem to be a growing part of the business world, with rapid changes in technology constantly opening up new ways to do business. This might play favourably to ethnic minority entrepreneurs with a better understanding of different cultural approaches to doing business, for example, the African culture of the “side hustle” in identifying hidden opportunities and generating multiple additional income streams (including passive income) alongside or in lieu of 9 to 5 employment.
A study by Aston University indicated that ethnic minority businesses were more likely to export partly perhaps due to having overseas connections and advantages in language and cultural understanding. The same study also found that ethnic minority businesses were more innovative.
And the increasing number of female and ethnic minority role models succeeding in business is set to assist too.
The next wave of economic disruption and entrepreneurship
It seems that there is a huge, but as yet untapped, well of female and ethnic minority entrepreneurial power that could be unleashed for the benefit not just of women and ethnic minorities but of all society. Except perhaps those of us resting on our laurels. Perhaps it is now the time for the next wave of economic disruption, this time led by women and ethnic minority entrepreneurs.
At WSP Solicitors our proactive approach has helped 100s of clients running businesses. We know that business ownership can be stressful and so our number 1 priority is to provide sound sensible advice and support you in achieving your business goals on time and within budget, on the best terms reasonably possible.
If you own or are thinking of buying or selling a business, or you are an accountant or a business consultant and want your clients to have good solid legal advice and support, then we would be delighted to hear from you. Initial consultations are always free of charge and without obligation. You can contact Peter Mardon directly on 01452 429875 or at firstname.lastname@example.org.
Alternatively you can get in touch using our contact form here or by calling 01453 847200.
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