Funding your Business Growth: A Guide for Women in Business
Hi i’m Sophie, MOB member, mother, Fractional CFO and founder of WrightCFO. With more than two decades of experience as a Chief Financial Officer and Financial Controller, Each month I share my finance wisdom with The MUms WHo Build community. This month I am looking at the best funding options, support networks, and resources to help female entrepreneurs secure the funding they need. Learn how women can overcome the funding gap and grow their businesses confidently! I hope you find it useful, as always please feel free to leave your questions and feedback in the comments box below.
As businesswomen, we know that securing funding is often crucial for growth, whether it’s to launch a new product, expand into new markets, or simply to tackling challenging economic times.
I am a firm believer that knowledge is power. That’s why I’ve put together this guide to break down the funding process and empower you to make informed decisions for your business.
The Funding Gap: A Reality Check
Let’s be honest, it’s not always a level playing field out there. In the UK, women are less likely to get the funding they need compared to men. Research from the British Business Bank found that only 1p of every £1 of venture capital investment goes to all-female founder teams. This funding gap is a significant barrier to growth for many women-led businesses. But why does this gap exist? There are a number of contributing factors, including unconscious bias and lack of female representation in the investment industry to name a few. The good news is that things are starting to change. Theres a growing recognition of the funding gap and a concerted effort to address it. More and more organisations are dedicated to supporting women in business, and investors are becoming increasingly aware of the unique value proposition that female-led businesses offer.
Finding Your Tribe-Focused Funding and Support
One way to beat this funding gap is to tap into the awesome network of women-focused investors, networks, and support organisations out there. These resources can be a goldmine of funding, mentorship, and connections.
1. Women-Only Investors and Angel Groups
Angel Academe: This angel network is focused on investing in businesses with at least one female founder. They provide funding and support to help women-led businesses scale.
Investing Women Angels: This group of female investors is committed to backing ambitious female entrepreneurs. They offer funding, expertise, and connections to help businesses grow.
Blooming Founders: This is a community of female founders and investors that provides access to funding, mentorship, and resources.
2. Female Networking and Support Organisations
The Federation of Small Businesses (FSB): The FSB offers a range of resources and support for women in business, including networking events, mentoring programmes, and access to funding.
Women in Enterprise Network: This network provides support, training, and networking opportunities for women entrepreneurs.
Women and Equalities Unit: This government department works to promote gender equality, including in the workplace. Their website has information on policies and initiatives related to women in business.
Rosa Fund: This charitable fund specifically supports women and girls in the UK. They offer grants for projects that address gender inequality.
3. Gender-Specific Support to Raise Money
The Women’s Business Council: This independent body advises the government on how to support women in business. They have a number of resources and initiatives to help women access funding.
Startups.co.uk have a great article here on “Top 6 Business Grants to Combat the gender Funding Gap”. By making the most of these resources, women in business can boost their chances of securing funding and achieving their big dreams.
Understanding Your Needs
Before you jump into the world of funding, it’s important to take a step back and understand what your business really needs. Ask yourself:
How much funding do you need? Be realistic and precise.
What is the funding for? Be clear about how the funding will be used.
When do you need the funding? Establish a clear timeline for your funding needs.
How long will you need the funding for? Determine the duration for which you'll
require the funds.
What is your business's financial position? Assess your current financial health, including your profitability, cash flow, and assets.
Exploring Funding Options
Once you have a clear picture of your funding needs, you can start exploring the various options available. Here are some of the most common:
1. Bootstrapping
Bootstrapping means using your own resources to fund your business. This could include personal savings, profits from your business, or even assets like property.
Pros: You retain full control of your business and don’t have to give up equity or take on debt.
Cons: It can be slower to grow your business this way, and you may need to take on more personal risk.
2. Small Business Loans
There are a variety of loans available specifically for small businesses, from traditional bank loans to government-backed schemes.
Start Up Loans: Government-backed loans of up to £25,000 are available for businesses that have been trading for less than 2 years. You can find more information on the Start Up Loans website: https://www.startuploans.co.uk/
Bank Loans: Traditional bank loans can be a good option for established businesses with a strong track record.
Peer-to-Peer Lending: Platforms like Funding Circle connect businesses with individual investors who are willing to lend money.
3. Grants
Grants are essentially “free money” that you don’t have to repay. However, they are often competitive and may have specific eligibility criteria.
The UK government offers a range of grants for businesses, which you can find on their website:https://www.gov.uk/browse/business/finance-support
Grants may also be available from local councils, charities, and other organisations.
4. Equity Finance
Equity finance involves selling a portion of your business to investors in exchange for funding. This can be a good option for high-growth businesses, but it means giving up some control.
Angel investors: These are individuals who invest their own money in early-stage businesses. You can find angel investors through networks like the UK Business Angels Association: https://ukbaa.org.uk/
Venture capital: Venture capital firms invest in high-growth businesses with the potential to scale rapidly.
5. Crowdfunding
Crowdfunding involves raising small amounts of money from a large number of people, typically through online platforms.
Rewards-based crowdfunding: You offer rewards to people who contribute to your campaign, such as products or experiences.
Equity crowdfunding: You sell shares in your business to investors through a crowdfunding platform.
Don’t be afraid to seek professional advice from a financial professional, such as a someone from WrightCFO. We can help you assess your options and make the best decision for your business.
Remember: As women in business, we have the power to create thriving businesses and achieve our financial goals. By understanding the funding landscape and making informed decisions, we can unlock our full potential and build the businesses of our dreams.
About Sophie:
Sophie Wright is the founder of WrightCFO, which provides strategic financial leadership to scaling companies. With more than two decades of experience as a Chief Financial Officer and Financial Controller, Sophie specialises in helping businesses achieve their growth ambitions by implementing robust financial systems and processes. Passionate about empowering organisations to make data-driven decisions, she focuses on delivering clarity and confidence to her clients through WrightCFO’s tailored fractional CFO services.
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