WOMEN are better represented among high net worth business owners than among those leading small and medium-sized firms, according to a new report.
The research by Barclays Wealth & Investment Management found that 44 per cent of high net worth women classify themselves as business owners – a similar figure to the 49 per cent of high net worth men who describe themselves in the same way.
This contrasts with a 2011 survey by the Government which found that only 14 per cent of small and medium firms were led by women.
Barbara-Ann King, who heads the female client focus at Barclays Wealth & Investment Management, said: “This report shines a light on a very important, yet often overlooked group: female entrepreneurs.
“By scrutinising the current levels of entrepreneurialism, and identifying the distinct behavioural traits of male and female business owners, we can identify what needs to be done to best support the current and future generations of entrepreneurs.
“We know that women and the female economy are vital to economic growth, so encouraging an environment which supports women on their entrepreneurial journeys must now be considered a global imperative.”
The report, Unlocking the Female Economy: the Path to Entrepreneurial Success, also found that the gender pay gap among entrepreneurs is in fact reversed, with women earning more than men.
The average annual income for a female entrepreneur was £382,000, while for men it was 14 per cent less, at £327,000. Meanwhile, the average annual income for a high net worth woman who does not own her own business earns an average of £217,000, which is 21 per cent lower than the equivalent average male salary of £273,000.
According to the report, the differences indicate that women may be better rewarded in a more entrepreneurial environment which is more market-driven, rather than a more traditional role where pay must be negotiated. Those consulted in the report also said women tended to be more reluctant to negotiate pay rises compared to men, so those who are employed end up earning less than their male colleagues.
The report shows fundamental differences in attitudes to failure and risk.
Failure can be seen as a valuable and often vital learning tool in setting up a new venture, but the Barclays research showed that female business owners tended to value past failures less than their male counterparts.
The research also showed that men and women also have very different attitudes to risk-taking.
When it came to taking risks in their investments, high net worth women were less likely than their male counterparts to choose high risk, high return investments or describe themselves as financial risk takers, which carries important implications in an entrepreneurial context.
Although the more cautious approach may minimise the danger of excessive risk-taking and over-committing resources, it can also mean female business owners may miss opportunities or lose out to competitors who are more willing to take a leap of faith.
Dr Emily Haisley, a behavioural finance expert at Barclays, said: “In any setting, and especially in an entrepreneurial one, the propensity for risk-taking is going to be helpful at times and harmful in others.
“Whilst it is natural for men and women to have different perspectives in decision making, it is important to be aware of your own propensity for risk and surround yourself with people who have different attitudes towards it.
“It’s not a matter of having male opinions and female opinions; it is a matter of increasing the likelihood of having diverse opinions feed into decisions in order to secure the best outcome.”