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How do you get more women to start up their own businesses? According to Workingmums.co.uk’s annual survey, the majority of mums have considered striking out on their own. In part this is because they want to get greater flexibility, but this is by no means the whole story. For instance, it may also be the case that they fancy a bit of a challenge and to try something new which stretches them and allows them to use all their skills.
What is clear is that many choose not to take the next step to actually starting up a business. According to the All Party Parliamentary Small Business Group, the main barriers to setting up a business include a lack of guidance or rather too much guidance in too many different places and access to finance. It calls for a simplification of the information available and, in the case of women, for more linking up between Job Centres and women’s networks to channel women towards the information and support they need. It also mentions the need for more business mentors.
At the launch of the report, there was a discussion about government financial support to help those out of work start up a business, particularly the New Enterprise Allowance Scheme. The APPSBG says it has some flaws. One is the requirement for people to have been unemployed for six months before they can access the scheme. It says research shows people who become self-employed during the first six months of unemployment are more likely to have an enterprise which survives after two years than those who have been out of work for longer. Another flaw it highlights is the fact that it only provides the equivalent of Jobseekers’ Allowance for the first three months then half that amount for the next three. Hardly an incentive for people to start a business, say critics. Work and Pensions Secretary Iain Duncan Smith was challenged at the launch on the latter point.
His main argument was that resources were limited and that it was anticipated the halving of the money in the latter three months would provide an incentive to get the business up running as quickly as possible. But three months? It seems a ridiculously short time. Many entrepreneurs are still not able to pay themselves any money a year into setting up a business. Is it really a good use of government money to set people up to fail?
Business Secretary Vince Cable spoke of the need to cut red tape to free up small businesses to grow and hire more workers. The report also calls for greater deregulation. Cutting red tape seems a good thing in general and it is true that too much complicated paperwork can stifle growth. But it surely depends what is meant by red tape. It seems to embrace hard won employment rights like the right not to be thrown out of your job unfairly. Workingmums.co.uk receives a lot of pleas for advice from women who have been made redundant and many appear to have strong cases for unfair dismissal. In a time of economic downturn, cutting red tape might be more about freeing businesses up to fire than to hire.