The COVID-19 crisis is affecting everyone in unique ways by presenting different challenges as well as opportunities. This blog is part two of two about the impacts of the pandemic. We wrote two blogs to look at the crisis from different views and by doing so, gain a deeper understanding of the effects of COVID-19 as well as the challenges it presents. Make sure to check out part 1!
COVID-19 has profoundly changed our world. As we adjust our lifestyle to suit the new emerging normal, there are some impactful consequences of COVID-19 that can’t be overlooked. One such byproduct lies in how our world circulates— through business.
Granted, all businesses are not made equal, so every business has been hit by the pandemic in different ways. Some businesses, such as these, are thriving, while others are struggling to stay afloat. Small businesses, in particular, have been overwhelmed by the consequences of COVID-19.
Small Businesses and COVID-19
In a nationwide survey of 500 small businesses, 9 in 10 small business owners report that they have been negatively affected by COVID-19. 40% have permanently laid off their employees, 56% have furloughed their employees, and 72% have had to reduce their employee’s hours and/or salary. Shockingly, they have all fared better compared to the ones who have had to close their doors for good.
Rent, salary, and equipment are just a few of the many costs required to keep businesses afloat. Without a steady stream of customers for revenue, small businesses have had to rely on their own savings and crowdfunding sites for help. However, businesses aren’t meant to sustain in that model. Every month counts. When cash flow decreases to the point where large businesses, such as Neiman Marcus, are filing for bankruptcy, it’s hard to imagine how small businesses can survive.
Women-Owned Small Businesses
Women-owned small businesses, in particular, are one of the groups hit hardest by the effects of COVID-19. Throughout history, women have had to fight against gender inequality, stigmas, and archaic normatives to gain respect in an area that was largely dominated by males. Although society has made substantial progress in accepting and empowering women to hold positions of influence today, there is still much work to be done in continuously supporting and sustaining women in business.
Before COVID-19 entered the scene, there wasn’t a recipe for business success geared towards women. It was hard to obtain loans or find investors that believed in the success of women-owned businesses, so countless women had to self-start from their own pockets. Women also had responsibilities at home to balance. Juggling both personal and professional demands is challenging enough, but it’s made even more so when there’s no support system in place. From the lack of guidance in how to combat wage inequalities to an absence of mentorship for advice and compassion, the cards were stacked against women who wished to break into business and entrepreneurship.
Within the past 100 years, women have made great strides to overcome these obstacles. Society has also taken strides to accept women—not just in the workplace—but also in positions of power. However, we still have work to do before our preconceived notions of where women belong is truly changed. Glimpses of these inequalities are still apparent, and COVID-19 has compounded these issues and made them stark.
COVID-19 Impact on Women-Owned Businesses
A majority of businesses owned and operated by women fall in the health care, hospitality, and food service industries. These industries are most vulnerable to disruption during the pandemic. Since service businesses are not considered essential, mandatory closures have negatively impacted the revenue of these businesses. Women also make up 70% of health care practitioners, leaving them most vulnerable to contracting the disease.
Finding funding to support women-owned businesses has been difficult, especially since a lack of funding is a sign of these times. In 2019, Columbia Business School conducted a survey to explore why women-led ventures are not receiving the same amount of funding as male-led ventures. Although women generate $1.9 trillion in revenue, women-led operations are 63% less likely to receive funding from venture capitalists. That statistic rings true in Visa’s study as well, as 66% of women entrepreneurs reported that they struggled with obtaining proper funding. Given that this was the state of business before the pandemic hit, access to funding is even more limited for women now that there’s a more urgent need for financial support among a wide variety of businesses.
Having a solid support system is just as important as having financial support. With only essential businesses opened, families must care for their children around-the-clock. Unpaid care work often falls to the woman, leaving women who also run a business to now be responsible for herself, her business, and her family. Simultaneous demands from one’s professional and personal life can be exhausting. Without a nurturing support system from peers who understand this unique situation, it can be grueling to handle this incredible multi-tasking feat alone.
It is more important now than ever to recognize the stress COVID-19 is placing on groups outside the normal scope of recognition. Although women-owned businesses are one of the groups hit hardest by COVID-19, the effects are multiplied for women of color. Rates of unemployment in response to COVID-19 is highest for women of color since these groups are often employed in industries that have seen the most layoffs. Women of color are also the most physically vulnerable because they fill roles deemed essential and must continue to work during this pandemic. It’s a paradox—one that our country has yet to properly recognize and provide an appropriate response for.
Within the business model, a flexible mentality that’s open to change is key to sustaining a business. However, COVID-19 has introduced new challenges that adaptability can only partially solve. Recognition that you are in a position that needs help is important, but tangible support is vital.
The Tory Burch Foundation offers a hub of resources for small businesses, including helpful programs, weekly webinars, and funding assistance. IFundWomen is a funding platform where women entrepreneurs can start a campaign to receive support from the community. The Red Backpack Fund is offering a monthly application program (May 4, June 1, July 6, and August 3) to gift 1,000 women-owned businesses with a donation of $5,000 each.
A larger list of resources can be found at Ladies Who Launch, Lendio, and Fast Company. If more help is needed, please do not hesitate to reach out to us at Colibri Digital Marketing. As a B Corp certified digital marketing agency, our continuous mission is to lead with love while supporting businesses for good. We are happy to help by offering a complimentary 30 minute strategy session for your business. Click on the button below to get started!