Women-Owned Businesses will be the Backbone of a Post-Pandemic Recovery
by Wendy Barcelona
Here are some important facts that every woman-owned business ought to know.
According to the National Association of Women Business Owners, “one in five firms with revenue of $1 million or more is woman-owned and 4.2% of all women-owned firms have revenues of $1 million or more.” While the numbers are impressive compared to decades past, they should be even higher.
Female entrepreneurs ask for roughly $35,000 less in business financing than men. Overall, men receive an average loan size of $43,916 while women receive an average loan size of $38,942. And let’s face it, sexism is still present. Many women starting their own businesses reported being asked questions such as “will your husband be co-signing the lease?” Despite progress, women have many hurdles to overcome.
But the fact is that the US has 12.3 million women-owned businesses generating approximately $1.8 trillion per year. Female owned businesses are a huge part of our national economy employing more than 8 million workers. Most women owned businesses are considered “small businesses” (employing fewer than 500 people), and although they appear across all industries, most women-owned businesses are in the service sectors. Thus, women have been hit especially hard by COVID-19. They have been forced to close their businesses, while at the same time, home-schooling and cooking and cleaning for their families who are also home.
According to some sources, more than 60% of women cite their women-owned business as their only source of income. The shut-down of child care and service sector businesses means that layoffs and cuts have hit female businesses particularly hard. Some estimates state that 40% of women-owned businesses had to lay-off employees. Nicole Mason, President of the Institute for Women’s Policy Research, has called it the “Shecession.”
What can women do? What they always have. Bounce back, and once again provide the stimulus to re-start the economy. According to some sources, as few as 25% of women business owners seek business financing. Women are more successful in crowdfunding than men, and women continue to be passionate about the businesses they start. Our resilience, and ability to successfully connect and raise each other up will help get the economy back on track post COVID.
Wendy Barcelona is an intern with EmergeLaw, PLC and in her third and final year of law school at Vanderbilt. Previously, she served as a judicial extern to the U.S. Bankruptcy Court for the Western District of Washington.