According to new data released by the US Chamber of Commerce, women-owned businesses have been more heavily impacted by the coronavirus, and they are less likely to anticipate a strong recovery in the year ahead. Despite the pandemic, the majority of male entrepreneurs still rank the health of their business as “good,” while less than half of women entrepreneurs felt the same, a 22% decline since January.
As a women entrepreneur running a small business, it is easy for me to understand why so many more women-owned businesses are facing challenges. The first, and most obvious culprit, is the difference in size between women and male-owned businesses.
Despite the fact that women make up more than half the college-educated workforce and are starting businesses at twice the national average, most women I meet don’t believe that it’s possible for them to start a business that crosses the magical million dollar mark. Statistically, they’re not wrong. Only four percent of women-owned businesses make it past the million dollar revenue mark, and even fewer raise outside investment.
Women-led businesses receive less than 3% of venture capital funding. America reached a major milestone in 2019 with the largest recorded amount of investment in history going to female founders. And just what was that record-breaking number you may ask? It was a dismal 2.8% of all venture capital investment.
Complicating this challenge further is the prevalence of women-owned businesses in sectors hit hardest by COVID-19. Women are more likely to start product and service-based businesses, particularly in industries such as food, fitness, beauty, and retail. While some food businesses have done well during the pandemic – oh to be a toilet paper or hand sanitizer company! – fitness, beauty, and retail businesses have taken major nosedives.
As Helen Lewis of The Atlantic boldly proclaimed at the beginning of the pandemic in March, “the coronavirus is a disaster for feminism.”, Things have gotten worse as the burden of homeschooling has fallen disproportionally on women with no end in sight. A disease that many people thought would dissipate in the summer months has only intensified, leaving schools hard-pressed to open safely, with 4,300 cases at more than 1,000 schools after less than a month. And those are just the verified cases. Though it’s hard to document, the childcare burden is undoubtedly part of the reason why fewer female founders expect their businesses to grow in the coming year than their male counterparts.
The coronavirus has shone a spotlight on American society, and our cracks are showing through. Deep racial, gender, economic and healthcare inequities remain exposed. The question now is what we do about it. Will we continue business as usual, and watch as our society grows increasingly unequal? Or, from the wreck of this pandemic, can we build a more equitable and just society?