With few exceptions, American businesses have struggled during the pandemic. Some have already shuttered their doors, while others are barely hanging on. And some groups, such as Black-owned businesses, have been particularly ravaged by COVID-19.
Another hard-hit group: women-owned businesses. For a variety of reasons, it appears that COVID-19 has the potential to undo the main gains women entrepreneurs have made over the past few years.
A report by the US Chamber of Commerce reveals how the pandemic has disproportionately impacted women who own small businesses.
Before the pandemic, 67% of men and 60% of women ranked the health of their businesses as “good.” However, by July 2020, this stat only dropped 5 points among men (62% still rated their businesses as healthy), whereas there was a 15-point drop among responses from women (47% still rated their businesses as healthy).
In fact, businesses owned by men were also more likely than women to report that they actually increased staff during the pandemic. The number grew from 17% in the first quarter of 2020 to 25% in July. On the other hand, from the 18% of women-owned businesses that reported an increase in staffing in the first quarter of 2020, only 15% had increased staff by July
Regarding their plans to increase staffing, 36% of businesses owned by men said they plan to increase staff size in the coming year, compared to 24% of women. Compared to the first quarter of 2020, this represents a 5% increase among men and a 7% decrease among women.
The report also reveals stark differences in investments and revenue expectations. From the first quarter of 2020 through July, 32% of women-owned businesses had future investment plans, which represents no change from before and during the pandemic. However, 28% of men planned on increasing investments in the first quarter of 2020, but by July, this number jumped 11 points to 39%.
As the report has shown, women business owners were more likely to bear the brunt of COVID-19’s wrath than their male counterparts. But why? “Many women-owned small businesses have been forced to close given the strain on resources, following non-essential designations during the shelter-in-place orders, or supply chain issues for materials needed to manufacture their products,” explains N. Damali Peterman, Esq., founder and CEO of Breakthrough ADR.
In addition, she says the pandemic has made it harder for women to balance business and home responsibilities. “Despite many advances in our society, women are still the primary caregivers in most familial settings,” Peterman says.
Her view is shared by Amy Edge, a small business owner who specializes in operations and project management for entrepreneurs. “The biggest adjustment has been to create new routines and new schedules that work for the family,” she says. “So many woman-owned business owners are not only leading their companies, but they are leading their families.”
And Edge says women are struggling with changes in school schedules, lockdowns, and the mental health of their kids. “Their focus has been shifted and split even more so with the different facets of dealing with the impact COVID-19 is having on their family.”
Fair access to credit is another issue that disproportionately affects women. According to a Brookings report, women only account for 33% of business owners with employees, and most of the pandemic-related federal support for small businesses came in the form of the Paycheck Protection Programs. “Many women-owned businesses were unable to capitalize on the PPP program or other funding due to the size of their business, or the limited amount of time that was given to respond to the application process,” explains real estate developer Wendy Muhammad. “Many have lost employees and have had to learn how to pivot in the midst of our new normal.”
And since women only account for 1/3 of business owners with employees, most of their companies didn’t even qualify.
And let’s not forget why so many women-owned businesses were (and continue to be) in danger of closing and in need of financial support—women are more likely to have the type of businesses that depend on in-person customers, such as hair and nail salons, daycare and home healthcare services, and retail trade. These are the types of businesses directly affected by lockdowns and social distancing guidelines.
However, some women have been able to quickly adapt and make the necessary adjustments.
For example, Bri Seeley, business growth advisor and entrepreneur coach at Seeley Enterprises, points to a woman-owned business in this category that is actually thriving: Strandz Hydro-Curlz, founded by Tonya Fairley. “Tonya began the pandemic as the owner of several hair salons which have now been deemed non-essential on 3 occasions since March,” Seeley says. “Tonya saw the writing on the wall and decided to use this as an opportunity to move forward with her idea for a hair product, quickly adapted, and launched.” And Seeley estimates that the company’s sales have increased every month by 33–37%.
Krystal Covington is the founder of Women of Denver, and more than 60% of the organization’s members are business owners. “During this period, I’ve seen a few of my members close for good, and many are pivoting heavily to respond at the moment to customer demands,” Covington says. However, she has also observed women who have been laid off from their jobs entering the business world as new entrepreneurs so they can take control of their future.
“In the first weeks of the shutdowns here in Colorado, a few women I know who are also in similar businesses banded together so that we could support each other as we navigated the current that was pulling us all into new territory.” Covington credits this bond with helping her feel that she wasn’t alone as she mourned the loss of the business model that she’d been using since 2014. “I’ve seen many women come together in this way in mutual support, and I think it’s the only way we can make it through the next year successfully.”