THE owner of an expanding Scottish spa and beauty treatment business has underlined her frustration at the lack of growth finance opportunities available to established firms, while lamenting the dearth of start-ups by female entrepreneurs in the UK.
Becky Woodhouse has set a target to grow Edinburgh-based PURE Spa & Beauty from its current eight locations to between 25 and 30 outlets across the UK in the next two to three years, revealing she is on course to open further outlets in the first quarter of 2019.
The expansion comes with PURE on target to lift turnover to £3.4 million this year, up from £3m in 2017, with revenue boosted by the opening of two outlets, rising online sales and strong performances by its existing sites.
Earnings before interest, tax, depreciation and amortisation are forecast to come in at £250,000.
So far, Ms Woodhouse has grown her business through self-funding and bank support, noting that the latter has allowed PURE to secure investment against physical assets.
But talks with potential equity partners over providing investment for “intangible” assets, such as people, have met with mixed results.
Asked why this was the case, Ms Woodhouse said some in the investor community do not always understand the business, and the investment opportunity it offers.
“There is a bit of a hurdle,” Ms Woodhouse said. “Generally, my experience has been that [potential investors] don’t reallyunderstand the growth factor
of the business, the industry, where we have gone and how we have got there. That has had an effect on our ability to [secure investment].”
Ms Woodhouse believes existing Government mechanisms to support business, such as Enterprise Investment Schemes (EIS) and Venture Capital Trusts (VCTs), are too focused on the start-up sector, and questioned why a company “age limit” applies to them.
The entrepreneur, who has grown PURE’s headcount from 115 to 150 this year, said: “It’s just a completely arbitrary rule. I don’t think it just affects female-led
businesses, it affects older businesses. Typically, scale-ups are the ones that generate the employment, the wealth in the economy [and] give so much back.
“It is ironic that the average age of scale-up businesses is 20-years plus, yet all the Government schemes are essentially barred [to them].”
Ms Woodhouse recently launched a crowdfunding campaign to raise £150,000 to help fund business expansion. She said the drive, which allows people to invest in the business for as little as £10 in return for shares and benefits, fits with the PURE ethos of making beauty treatment more accessible.
Ms Woodhouse’s comments come after a major study, the Beauhurst ScaleUp Index, found that only four per cent of UK start-ups are established by women. It also found only 3.9% of venture capital funds go into businesses with a female founder. Ms Woodhouse described the findings of the report as “frustrating”.
She said: “I know great strides are being made in all areas, whether it is business, careers or women on boards, but it does seem to be that women starting businesses or growing businesses lags behind everything. Just four per cent is a very low number.”
Ms Woodhouse recently became the first Scottish businesswoman to be accepted on to the EY Entrepreneurial Winning Women Class of 2018, and said it has been inspiring to be in the company of so many “like-minded women growing businesses”.
However she argues more needs to be done to encourage women to start their own ventures. Ms Woodhouse said: “There is a long way to go.”
On the lack of funding going into female-led businesses Mike Timmins, head the EY Entrepreneur of the Year programme in Scotland: “This is just one
example of why it is important to challenge the status quo and question if the traditional methods for reviewing investment decisions are the most appropriate for developing a more diverse and inclusive business community.
“The significant untapped potential of women entrepreneurs will undoubtedly strengthen the Scottish economy.”
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