Introduction
Factors inhibiting the
economic growth of
female owned small
businesses in North
West England
Sandra L. Fielden
Marilyn J. Davidson
Adel J. Dawe and
Peter J. Makin
The authors
Sandra L. Fielden, Marilyn J. Davidson
Adel J. Dawe and Peter J. Makin are all at the
Manchester School of Management, University of
Manchester, Manchester, UK.
Keywords
Women, Small firms, Barriers, Economic growth, Change,
United Kingdom
Abstract
While the general trend in the UK is towards an increase
in female owned small businesses, during the last few
years the number of North West of England businesses
owned by women has fallen by 12.5 per cent. Aims to
investigate the barriers preventing women from entering
into growth businesses in the North West. The research
included discussions with 12 service providers as well as
in-depth interviews and focus groups with 99 potential
and established female business owners. The main
barriers blocking women's ownership of small businesses
involved the widely held stereotype of business owners as
``white, middle class, males'', cultural differences, a
shortage of premises for new businesses and the lack of
appropriate childcare.
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Journal of Small Business and Enterprise Development
Volume 10 . Number 2 . 2003 . pp. 152-166
# MCB UP Limited . ISSN 1462-6004
DOI 10.1108/14626000310473184
152
From the early 1990s it has been
acknowledged that small businesses are the
key to economic regeneration. By mid 1990s,
it was estimated that women-owned firms
accounted for between a quarter and a third
of all businesses (National Federation of
Women Business Owners, 1997). Small
businesses currently account for 99 per cent
of all businesses in the UK and are the source
of most new jobs (Department of
Employment and Education, 2000). Firms
with fewer than ten employees now generate
around 20 per cent of the output attributed to
small and medium-sized enterprises (SMEs)
and those employing fewer than 50 workers
are responsible for 46 per cent of all new
private sector employment. The number of
small businesses is currently estimated at 3.5
million, with women accounting for 23.7 per
cent of micro and small business owners
(Employment Labour Force Survey, 2000).
However, while the general trend throughout
the 1990s was an increase in business
start-ups, a recent decline has resulted in an
overall decrease in the number of small
businesses.
Small businesses are key players in the
success of regional development and the
building of social cohesion in deprived areas
(Department of Employment and Education,
2000). Furthermore, in areas such as the
North West, small businesses can be a crucial
factor in determining economic growth and
yet the number of small businesses has been
decreasing over the past few years at a higher
rate than for the UK as a whole (Employment
Labour Force Survey, 2000). This trend has
had a significant impact on the number of
women owned businesses, with the North
West experiencing a greater loss than any
other region. The last few years have seen the
number of female owned small businesses
drop by 12.5 per cent, falling from 80,000 to
70,000.
Since the early 1980s the number of women
pursuing small business ownership in the UK
increased steadily until the late 1990s, when
This project was co-funded by the University of
Manchester Institute of Science and Technology
and the European Economic Development Fund,
and could not have been carried out without the
support of the Rochdale Partnership and
Community Economic Development Team.
 Factors inhibiting the growth of female owned small businesses
Sandra L. Fielden et al.
women accounted for half of all new business
start-ups (Scase, 1998). However, this
progress has clearly been halted in the North
West and they now account for less than 30
per cent of the new small businesses created
in this region. This article presents the
findings of a qualitative study carried out to
identify the barriers to women's progression
into small business ownership in the North
West. It establishes why these barriers appear
to be on the increase and formulates practical
recommendations to overcome them.
Women business owners
The research investigating the influence of
gender on small business ownership has
developed considerably over the past 15 years
(for a comprehensive review see Carter et al.,
2001). There are, however, few British
studies that have specifically focused on the
process of business start-up (e.g. Fielden et al.,
1998) and even fewer that have been
concerned with women entering small
business ownership. Research has isolated the
main hurdles experienced in the start-up
process as occurring at three stages:
``aspiring'', ``preparing'' and ``entering'' (Katz,
1990; Carter et al., 1996). Interestingly,
Moore (2002) concludes that male and
female business start-ups tend to have more
similarities than differences. Nevertheless,
compared to men, women were more likely to
have fewer expectations about loan
acquisitions, have higher attrition rates, have
been working part-time and come from lower
income households (Moore, 2002). Indeed,
there still appears to be a scarcity of academic
research in this area, taking into account the
growth of women business owners on the past
few decades. This has been reinforced by
Moore (2002, p. 250) who states that:
Given the rapid growth of women-owned
businesses, one might reasonably expect an
outpouring of new findings in the major research
outlets . . . but as surveys of the published
literature conducted between 1992 and 1999
show, this has not occurred.
Recently, Mattis (2000) investigated the
reasons for the dramatic rise in female owned
businesses in the USA from the early 1980s
up until the late 1990s. This study was
commissioned to explore the reasons why
women were leaving the corporate structure
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Journal of Small Business and Enterprise Development
Volume 10 . Number 2 . 2003 . 152-166
to pursue entrepreneurship, and identified the
need to exercise educational and technical
skills as being the main driving force for these
women, with the desire to make money as a
secondary issue. The evidence would suggest
that these factors arise for a number of
reasons. First, women corporate workers have
consistently encountered a glass ceiling that
has resulted in a lack of mobility, poorer pay,
and less advancement (Davidson and Fielden,
1999). According to Mattis (2000), in the
USA over the past 20 years, the percentage of
women new business owners who maintained
that they left their jobs in response to glass
ceiling issues had more than doubled, from 9
per cent to 22 per cent. She found the most
frequently cited ``glass ceiling'' issues
included:
. the failure to have their contributions
recognised;
. not being taken seriously;
. feeling isolated in their organisations; and
. seeing others promoted ahead of them.
Women also face vertical occupational
segregation, with their average weekly
earnings being half of those earned by men
(Fawcett Society, 1998). Finally, women
experience horizontal occupational
segregation being predominant in the
marketing and personnel sectors. In the UK,
for example, women account for 24 per cent
of all managers, yet they constitute less than 3
per cent of managers in financial and business
services (Institute of Management and
Remuneration Economics, 2001).
Nevertheless, while Moore and Buttner
(1997) acknowledged that discrimination and
glass ceiling issues undoubtedly play a role,
they found American women were leaving
organisations for the gender-neutral reason of
seeking more opportunity by setting up their
own businesses.
While these findings afford an explanation
of the rise in female business ownership, they
do not offer any insight into why this should
have been curtailed. Research on women
business owners as a separate group has
shown that they posses many of the
characteristics that are essential for business
success (Moore, 1999). Female entrepreneurs
are well educated, motivated by achievement,
energetic (Hisrich and Brush, 1984) and have
higher levels of self-confidence compared to
their male counterparts (Stimpson et al.,
 Factors inhibiting the growth of female owned small businesses
Sandra L. Fielden et al.
1993). Moore (1999) refers to these women
as ``modern'' entrepreneurs, who exhibit traits
closely associated with male entrepreneurs
and who tend to engage in business
enterprises previously dominated by men, e.g.
finance, manufacturing, construction and
technology. These women are dynamic and
highly motivated, coming predominantly
from managerial backgrounds, and tend to be
white and middle class (Devine, 1994).
However, not all women entrepreneurs posses
these characteristics. Many women do not
have managerial and business start-up
experience and a high proportion of
businesses started by women in the 1980s
were low-income, low-equity, slow-growing
micro enterprises (Moore, 1999). These
women business owners had limited access to
venture capital (hence they owned smaller
businesses), fewer employees, and expanded
at a slower rate than male owned enterprises.
Watkins and Watkins (1984) reported that
50 per cent of women business owners had no
prior or direct experience relating to their
business, or any managerial experience,
compared to only 5 per cent of men.
Furthermore, the majority of men entered
into a business for which they had prior
relevant technical and managerial experience.
Evidence from the work of Carter and
Cannon (1988) and Carter et al. (2001)
indicates that there is little relationship
between the duties, activities, responsibilities
and knowledge of women's previous
occupations and the type of business they
engage in. A situation that appears to be static
over time, as Mattis (2000, p. 58)
commented:
. . . interestingly, when women decide to start or
purchase their own business, they do not seem to
limit their choices to past experience.
Women are just as likely to own a business
that is totally unrelated to a previous job,
whereas male business owners are far more
likely to be engaged in a business that was
closely related to a previous career experience.
A characteristic of the majority of women
business owners, identified by several studies,
is that of a strong motivation for autonomy
and achievement frustrated by prior
education and background training. Carter
and Cannon (1988) found that the ``desire for
independence'' was given as an over-riding
factor, followed by the need for a challenge.
The desire to earn ``lots of money'' was not a
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Journal of Small Business and Enterprise Development
Volume 10 . Number 2 . 2003 . 152-166
factor in women's decision to enter into
business ownership, although financial
independence was important. Moreover, the
desire for independence (financial and
personal) was the single reason most
identified for the progression into business
ownership. However, this may be too
simplistic, masking a multitude of deeper
issues surrounding factors affecting women
who are at different stages in their lives.
Watkins and Watkins (1984) conclude that
many women enter into business because no
logical alternative exists which could fulfil
women's overriding motivational
requirements. Further evidence for this comes
from the more recent work by Mattis (2000)
who found that 69 per cent of the female
entrepreneurs surveyed in the USA reported
that they had entered into business because
they wanted to be in charge of their own
destiny. This was followed by the ``need for
more flexibility'' (51 per cent), especially with
regard to children, the ``glass ceiling'' (29 per
cent), an unhappy work environment (28 per
cent), and the fact that they had been
``unchallenged by their job'' (22 per cent).
While Mattis (2000) states that the move into
business ownership is often made in the
absence of an alternative, she does not claim
that it is an ``illogical'' choice. Cross-cultural
research (e.g. in Poland and the USA) has
substantiated that more control over one's life
is a primary reason for self-employment for
both men and women (Moore and Buttner,
1997; Zapalska, 1997). However, a more
important factor consistently cited by women
entrepreneurs compared to their male
counterparts is the level of balance in their
work and family lives (Cheskin Research,
2000). It is also evident that the majority of
women business owners operate enterprises in
the service sector, whereas the majority of
male business owners operate enterprises in
non-service sectors, particularly
manufacturing (Watkins and Watkins, 1984;
Mattis, 2000). Hirsrich and Brush (1984)
argue that the high percentage of women in
the service industry sector is reflective of the
educational system and the general
environment, which appear to provide little
specific encouragement and/or advice. Thus
women, especially those lacking managerial or
business experience, tend to be concentrated
in micro businesses that have little growth
potential.
 Factors inhibiting the growth of female owned small businesses
Sandra L. Fielden et al.
The review of the available research
literature indicates that women frequently
enter into new enterprises because
employment does not provide them with the
flexibility, control or challenge offered by
business ownership. Many women do not
have the experience or skill base of their male
counterparts, and this may not only inhibit
the progress of these women but may also act
as an efficient barrier to the entry of other
women into business ownership. This lack of
business background is not accidental, rather
it is fostered by the educational system and is
enhanced by employment practices that seek
to keep women out of the management
positions that would give them the
opportunity to acquire and develop relevant
skills and experience. Moreover, the evidence
would suggest that women do not lack the
motivation to enter into business ownership
and indeed they often need to be even more
highly motivated than their male
counterparts, if they are to overcome the
barriers to business start-up many will
inevitably encounter.
The aim of this research study was to
provide practical and realistic
recommendations for change to potential,
new and existing women business owners and
those involved in the provision of support in
the North West of England. In addition, it
was anticipated that the project methodology
would in itself benefit potential and existing
new business owners involved in the study,
with focus groups providing networking
opportunities and an open forum in which
women could discuss problems and perhaps
find solutions from other women in
established businesses.
Methodology
The methodology was largely defined by the
investigative nature of the study. A qualitative
approach was employed to analyse the
requirements of women as business owners,
the problems and the barriers they encounter
during small business start-up, the methods
they employ to overcome such obstacles, and
the means of support that were accessible to
them. The study consisted of four stages:
(1) a comprehensive cross-cultural review of
the current literature;
(2) interviews with 12 service providers
engaged in the provision of services to
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Journal of Small Business and Enterprise Development
Volume 10 . Number 2 . 2003 . 152-166
both potential and new small businesses
in North West England;
(3) 22 in-depth, open-ended interviews with
women who were either considering
starting a new business in North West
England, were in the process of business
formation, or were operating a new small
business; and
(4) a series of focus groups with 77 women
based in the North West who were either
considering business start-up or were in
the first 12 months of business operation.
Interviews with service providers
In-depth interviews were conducted with 12
service providers who were engaged in the
provision of advice and assistance to potential
and new small businesses. Service providers
were identified through the local council,
local partnership members and the telephone
directory ``yellow pages''. Initially contact was
made by telephone, at which time the study's
aims and objectives were explained.
Interviews were conducted at the service
provider's premises, lasting between one and
two hours, and explored:
. what assistance they offered;
. their experiences of working with female
owned micro and small businesses;
. the barriers they believed inhibited
women entering business ownership;
. how they felt those barriers could be
overcome; and
. other issues they believed were relevant to
the study.
Results of the interviews were content
analysed (Weber, 1990) and provided
material for the formulation of the in-depth
interview format, for use with potential and
established women small business owners.
In-depth interviews
The sample of female interviewees was
identified through a wide variety of sources,
including the local chamber's directory of
members, local women's working parties, the
community enterprise development database
of business owners, members of local
partnerships, and appropriate council
departments. Contact with in-depth interview
participants was initiated through personal
introductions by the above sources. Potential
participants were informed of the study aims
and given assurances regarding confidentiality