Some predict that 2021 might be the year of the woman-owned business. Women have made huge strides in the past decade as far as launching and successfully running companies across the US. But where do they currently stand? Has the pandemic waylaid some women-owned businesses? And for those who were significantly affected by the crisis, can they make a comeback? 2020 was not an easy year for any entrepreneur, and in some instances, women-owned businesses were hit especially hard. In this article, we look at the impact that the global pandemic had on women-owned businesses and consequently take a look at what 2021 might hold for these enterprises.
Women Business Owners: A Few Facts
According to recent studies and surveys, the number of women-owned small businesses is over thirty percent—this number is slowly ticking up year after year. Of that number, more than fifty percent are owned by women of the Gen X population. And right around twenty percent are Millennial women. Additionally, women business owners in this group for the most part have college degrees with over thirty percent having an advanced degree of some form.
So why did these women decide to start and operate their own companies? For many, it was a matter of flexibility. Being their bosses, controlling how, when, and where they worked, being more efficient when it came to the overall work/life balance were cited as reasons as to why more and more women are seeking to start their businesses.
For other women entrepreneurs, it has been a matter of putting their passion into practice. In other words, many women-owned businesses were started as a result of women wanting to do something they loved in the context of their careers. And as opportunities for women have expanded, so has women’s willingness to get out there and launch new endeavors.
According to recent polling, the primary industries in which we find women-owned businesses are restaurant and foodservice, retail, and also health and beauty. For many women entrepreneurs, getting started wasn’t as costly as first anticipated with over half of women business owners recently surveyed saying they invested less than 50k to get the company up and running.
As far as the length of time in business goes for women entrepreneurs, recent surveys suggest that 30 percent of women business owners have been operating their companies for at least ten years. Right around twenty percent of women-owned businesses in the US have been in operation for 2-3 years and just under twenty percent for one year.
Some Current and Future Challenges for Women in Business
All hasn’t been smooth sailing however for women entrepreneurs in the US. Many women-owned businesses do face challenges, in some cases, monumental ones. In 2020 among the top challenges faced by companies helmed by women was the lack of access to capital. Businesses owned by men historically have fared better when it comes to procuring additional working capital. Also, among problematic areas for women, the ability to recruit top talent, time management overall, as well as the capacity to provide benefits packages to employees.
One of the larger challenges that arose in the past year where women-owned businesses were concerned were such that related to marketing. Increasingly, women business owners are struggling when it comes to effective marketing strategies, such that gain them exposure over those businesses owned by their male counterparts. To this end, we are finding that a larger number of women entrepreneurs are starting to outsource this aspect of business operations, and this trend is only poised to become more notable in 2021. Other areas being increasingly outsourced: IT, bookkeeping, and CPA services.
Women Entrepreneurs And The Pandemic
Of course, women-owned businesses weren’t the only hard-hit ones during 2020 as relates to the pandemic. Small businesses globally took major hits with many shuttering for good as they were unable to get back on their feet. For women business owners, even in some cases more so than men, the effects of the pandemic motivated them to become more politically active and outspoken. Over fifty-five percent of women business owners did vote for Biden in the 2020 election. And yet despite the election outcome, many still feel dramatically uncertain regarding the future of small business as handled by the US government.
As we start to enter a post-pandemic landscape, women business owners are still reluctant to express too much optimism regarding the future. Nearly 40 percent of women business owners feel uncertain about what direction the country’s business climate is heading in. Still, forty-four percent do express some optimism regarding the potential for a turnaround in the business sector once the pandemic is behind us.
What Comes Next…
All in all, as far as 2021 and women-owned businesses go, things seem to be moving in a positive direction overall. Many women entrepreneurs have even started initiating plans for expansion among other efforts to grow their businesses this year. Some do plan to sell their companies, while others are eyeing scaling back options.
Additionally, it seems that where investing in a business is concerned, women-owned firms are becoming more active on that front. Over eighty percent do say that they will reinvest back into the company in terms of marketing efforts, expansion, remodeling, staffing, among other facets of the company. Investing in upgraded technology is also pretty big on the agenda for many women-owned businesses in 2021. Overall, the forecast seems promising for women entrepreneurs as they navigate their way through this year.
First Union Lending is here to help! While the past year leading into 2021 has been difficult, to say the least, we are proud to have been able to help so many small businesses make it through—many of them owned by women. With short-term loans and SBA loans among other products, we have a solution for you. Call today!