Becoming a successful entrepreneur in the UK is currently determined by more than just a good idea, passion, and persistence. Our research with the British Business Bank shows that outcomes are heavily influenced by ethnicity, gender, wealth, and location. In this report, based on surveying over 3,700 entrepreneurs, we explore and quantify the barriers preventing talented people from realising their ambitions and describe what must be done to create equal opportunities for all.
Roianne Nedd, Global Head of Inclusion and Diversity
There is no level playing field in entrepreneurship, whether for opportunities or outcomes. These are some of our summary findings, which paint a sobering picture
Ethnicity: 72% of Black and 62% of Asian and Other Ethnic Minority business owners report making a profit last year, compared to 84% of White business owners. Median turnover for Black African entrepreneurs is just £17,000, compared to £35,000 for White entrepreneurs.
Gender: Women make up only a third of entrepreneurs and they are disproportionately represented in sectors with the lowest labour productivity. Female entrepreneurs report their median turnover to be only a third of that of male business owners.
Wealth: 87% of business owners with household income of £75,000 or more reported making a profit last year, compared to 76% of those with income below £20,000. Almost half of Asian and Other Ethnic Minority entrepreneurs cite difficulties accessing finance as the reason for stopping work on their business idea.
Location: High levels of competition and high living costs make it hard for entrepreneurs to succeed in London: only 71% of entrepreneurs in the capital made a profit in 2019 compared to >80% in all other UK regions.
Our economy and country are at their best when everyone has the opportunity to make the most of their skills and characterCatherine Lewis La Torre, CEO, British Business Bank
The ongoing COVID-19 pandemic has had a huge negative impact on UK entrepreneurs. Overall, nearly half of those we interviewed reported either closing or singing sales fall by three-quarters, but among Black male business owners this figure was 60%. Business owners in Northern Ireland, the North East, and Scotland reported the highest levels of sales declines or businesses closing.
We must continue to address the structures and norms in our society that have created such stark inequalitiesLisa Quest, Partner and Head of Public Sector UK and Ireland, Oliver Wyman
With the greater understanding of the drivers and barriers to entrepreneurial success, the UK can be better armed to address inequalities. That’s why this report will be submitted to the Commission on Race and Ethnic Disparities to help them set a new agenda for positive change.
In addition, our work highlights the need for financial institutions to follow the lead of the British Business Bank and continue to provide start-up loans and mentoring support to entrepreneurs across the UK. Venture capital programmes should continue to seek out fund managers with networks beyond the norm and assess approaches to diversity as part of their due diligence.
Building inclusive organisations and societies is a long journey. While there is much work still to be done, we are hopeful that together we can help build a fairer UK.