Female entrepreneurs are out-earning their male counterparts, according to a new report from Barclays.

The report, Unlocking the Female Economy: The Path to Entrepreneurial Success, finds that 44 per cent of HNW women regard themselves as business owners, compared to 49 per cent of HNW men who describe themselves in this way. Meanwhile, the gender pay gap among HNW entrepreneurs has “reversed altogether”, it says.

Among HNW female entrepreneurs, the average annual income stands at £382,000 ($603,000), whilst male entrepreneurs earn 14 per cent less at £327,000. By contrast, the average income among HNW women who don’t own businesses is £217,000 - a considerable 21 per cent lower than the corresponding average male income of £273,000.

“This reversal in the pay gap indicates that women may be better rewarded in a more entrepreneurial environment, which is more market-driven than within a more traditional job role in which pay must be negotiated,” Barclays said.

Panellists in the report agreed that the turnaround could well be linked to the fact that women tend to be more reluctant to negotiate compensation increases, helping to explain why they typically earn less than men in employment contracts.

The report is the second in a string of female-focused white papers from the wealth and investment management division of Barclays. The inaugural white paper illustrated how men and women have varying attitudes towards risk and financial decision-making. The latest findings, says Barclays, have repercussions for global policy-making.

“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,” said Barbara-Ann King, who heads the female client focus at the wealth and investment management division of Barclays.

Differing attitudes towards risk and failure

According to the report, female business owners place less value on past failures than their male counterparts, as indicated by the fact that 60 per cent of male business owners agree that past failure in entrepreneurial endeavours increase the odds that a new business will succeed, compared with just 51 per cent among female business owners.

But burgeoning female entrepreneurs may be hindered if they don’t recognise the value in failure - or the lessons it brings - Barclays warns. Addressing failure helps entrepreneurs refine their vision, tackle shortcomings and increase the overall strength of their businesses, according to the firm’s expert panellists.

Meanwhile, when it comes to taking risks in their investments, HNW women are less likely than their male counterparts to choose high-risk, high-return investments or describe themselves as financial risk takers. But this “carries important implications in an entrepreneurial context,” Barclays said. “Whilst the more cautious approach favoured by the majority of women 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.”

“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,” added Dr Emily Haisley, a behavioural finance expert at Barclays.

Support needed for the female economy

Access to information, finance and networking opportunities are “key tools” needed to boost the chances of success. Barclays therefore recommends that budding female entrepreneurs explore new and innovative funding methods like angel investors and crowdfunding, as well as networking and business mentors.

“In the UK, 95 per cent of business angels are men and 5 per cent are women and yet we see many more women becoming more affluent, often from having exited businesses. The problem is that we do not see the woman’s pound working for women in the women’s market,” said Gita Patel, co-founder and director of Stargate Capital Investment Group.