ALARMING ATTRITION RATE OF WOMEN-LED BUSINESSES

We're calling for urgent action to tackle the high levels of women-led businesses failing to progress beyond the start-up phase, with the need for a strategic, long-term solution to boost women-centric business support.

The authors of the survey highlight that whilst more women are starting up in business than men, proportionately few women-led businesses are making it through the post-start-up phase to establish and grow.

While women-led business start-ups have increased to 54% of all start-ups in Scotland (2025) [1], the post-start-up pipeline has a high attrition rate of 61% (2023-24), and women-led employer businesses have dropped to just 20% of all employer businesses. This declining trend in Scotland is at odds with the global increase in established women-led businesses[2] and exposes a key disconnect between Scotland’s thriving start-up culture and the failure of many of these businesses to move through to the established and growing phase.

Carolyn Currie, CEO of Women’s Enterprise Scotland said; “

A perfect storm of economic conditions and structural inequalities is halting the progress of women-led businesses, despite their start-up successes. What we are seeing is an alarming number of new women-led businesses failing to thrive. They are simply falling into an abyss, leaving their economic potential and the ambitions of their founders unfulfilled. The WES survey reveals a clear demand for needs-based business support, with the majority of respondents advocating for a Women’s Business Centre model.

Many of the issues - and suggested actions that need to be taken - have been highlighted in research numerous times over the past 30 years. We can continue to watch talented women entrepreneurs leave the market, taking billions in economic potential with them, or we can implement the evidence-based solutions this study provides. The choice is clear – the community has spoken, and we need to listen. The time for action is now.”

Tackling this declining trend and improving current outcomes for women-led start-up businesses has the potential to unlock an estimated £17bn reward for the Scottish economy every year.[3] This would eliminate almost two-thirds of the current public sector spending deficit, which now stands at £26.2bn, according to the latest Government Expenditure and Revenue Scotland (GERS) report.[4] Achieving parity would eliminate over 80% of the deficit.

Successive governments in Scotland have committed to inclusive growth and women’s entrepreneurship, most recently in response to the Pathways Report[5], with up to £2.6m released for support in 2024 to 2025 and at least £4m pledged for support in 2025 to 2026. However, women’s entrepreneurship has not benefited from long-term investment in support provision anywhere near the levels seen in other areas of business, despite the economic opportunity represented by women as 51% of the population.  

The WES survey found that economic conditions are threatening business sustainability and reveals a devastating cost for women-led businesses; 78% cannot recover all their increased costs, 41% cannot recover any cost increases, 55% are using personal savings to capitalise their businesses and 52% are making no pension provision, threatening retirement security.

The study also highlighted inequities in COVID-19 business relief distribution, with women-led businesses receiving only 10.6% of grant funds, despite comprising 15.4% of all businesses – an inequality that remains unaddressed three years later.

Experiences of discrimination have doubled since 2016, with 68% of survey respondents reporting that they had experienced discrimination as a woman business owner. Key structural challenges identified include funding inequalities, with women-led businesses receiving just 2.8% of equity investment; caring commitments, with 29% starting up to work around care responsibilities; support mis-match, with 58% saying mainstream support does not meet their needs, and a digital divide with just 15% being able to access relevant funding, despite 78% wanting digital investment.

Despite these conditions, aspirations for growth are evident, with 62% of respondents anticipating a degree of growth in turnover over the next 12 months, underlining the potential to boost the potential economic contribution presented by women-led businesses if they were able to access strategic, tailored business support.

Jo Chidley, founder of Beauty Kitchen and WES Ambassador commented,

“In the eleven years since launching Beauty Kitchen, I’ve seen how women-led businesses can transform our economy when the right support is in place. The latest WES Survey makes it clear that we’re still falling short, relying on short bursts of activity and disconnected programmes when we could be building something far greater. There is a clear appetite from women entrepreneurs for a strategic, long-term model of support, with gender focus embedded at every level. If we settle for mediocrity, we accept wasted potential and lost opportunity. Together, we can build an enterprise ecosystem that nurtures ambition, unlocks talent, and ensures women-led businesses thrive for the long term.”

The WES Survey of Women in Enterprise 2025 was funded by the Scottish Government.  It provides a practical resource for policymakers and the wider business support landscape to close the ongoing gender gap in enterprise participation. It considers the social, economic, business and policy conditions in Scotland and reviews international comparators.

The report makes a range of vital policy recommendations. These include nationwide coverage of expert, women-centric business support through digital and hybrid models, structured mentorship and role model programmes, strengthened financial support and investment access, as well as mandated gender-disaggregated data collection for 100% of publicly funded business grants and investment.

The full WES Report 2025 can be found here

Majority women-owned businesses are 20% of the business base in Scotland, with an estimated £8.7bn GVA every year.^[6]

Equalling the 39% rate of women-led businesses achieved by the USA would contribute £17bn GVA every year, an 80% offset to the current public sector spending deficit of £26.2bn (August 2025).

The WES Survey into Women in Enterprise used quantitative and qualitative research methods and involved 283 female business owners between January and March 2025. It explores how conditions in Scotland are affecting the prospects of women-led businesses, with a particular focus on the business support landscape, the models enabling women-led businesses to develop beyond start-up and the major constraints that women face.

[1] Business Gateway Impact Report 2024 – 2025 (June 2025)

[2] Global Economic Monitor Women’s Report (2024)

[3] Supporting Women’s Enterprise in the UK: the Economic Case, FSB (2018) calculated women-led businesses in Scotland contributed £8.7bn GVA in 2015. The Small Business Scotland Survey shows women-led businesses were 20% of businesses in 2015. If 20% contributed £8.7bn GVA, then equalling the 39% rate achieved by the USA (which operates a women’s business centre model) would contribute £17bn GVA every year.

[4] Government Expenditure and Revenue Scotland (GERS) 2025-2025 (August 2025)

[5] Pathways: A New Approach For Women In Entrepreneurship, Ana Stewart and Mark Logan (2023)

[6] Pathways: A New Approach for Women in Entrepreneurship, Ana Stewart and Mark Logan (2023)