Creating a business from scratch is a daunting task for anyone, but the coronavirus pandemic is making it even more difficult to launch and grow a successful business due to economic constraints. It’s even more problematic for female entrepreneurs, who often face obstacles that their male counterparts do not.
As people are spending more time at home during the pandemic, studies have shown that women remain limited in their ability to work or run a business because they are taking on the majority of household responsibilities.
The strain of the pandemic is evident through funding numbers. Virgin StartUp pledged it would fund men and women equally in their entrepreneurial ventures by the end of 2020. In the early part of this year, women accounted for 43 percent of funding applications to the organization. This number rose to 47 percent by March. However, the number quickly fell to 23 percent once lockdown started.
This situation is unfortunate considering the potential economic impact of female entrepreneurs, who could play a significant role in the economy’s recovery. And while finding funding for a business has always been an issue for women, the pandemic is only likely to make it more difficult. Entrepreneurs now face the challenge of proving the viability of a company both during the coronavirus crisis and beyond. Investors do not want to put money into projects that will no longer be feasible once the pandemic is over.
New Opportunities for Entrepreneurship Among Female Entrepreneurs
Despite the challenges created by the coronavirus pandemic, female entrepreneurs have also been presented with some new opportunities. For example, more people than ever before are working from home, removing some of the hierarchy involved with the workplace and making it easier to balance work with household responsibilities. Naturally, many women are feeling burnt out as a result of dealing with both sets of responsibilities, but as time goes on, many are catching their stride, especially with good mentorship. Moreover, the pandemic has opened new business niches that can help female entrepreneurs secure a significant foothold in the market rather quickly. As they get more comfortable handling these responsibilities, they are getting more confident in their ability to start something new and meaningful.
Research undertaken by LifeSkills and Barclays revealed increased enthusiasm among female entrepreneurs. The survey asked women about their entrepreneurial drive, as well as anxieties about the current economy. More than half of respondents said the pandemic had inspired them to start a business. Among women between the ages of 16 and 34, nearly three-fourths affirmed that the pandemic has made them more likely to launch a new company.
However, just 14 percent of respondents had drafted a business plan, so there is still some work to do regarding creating opportunities and giving them the skills and knowledge they need to become entrepreneurs.
Challenges Ahead for Women Engaged in Entrepreneurship
The Babson College Diana International Research Institute (DIRI) recently surveyed women entrepreneurs to gauge how they were being impacted by the pandemic. The survey confirmed that 67 percent of women have experienced decreased revenue as a result of the pandemic. Moreover, 30 percent said they expected to take more than a year for their business to recover, while 23 percent reported closing their business permanently due to the economic climate.
At the same time, women are pivoting to make the situation work. Fifty-four percent of women reported finding new ways to market and promote their business, and 53 percent are offering new products or services. Also, many women have taken steps to reduce costs, including reducing office expenses and renegotiating vendor contracts.
Based on the findings of the survey, DIRI director Smaiyra Million offered some key advice for women struggling with their business. First, they need to keep tight control of their business’ finances. When entrepreneurs do not keep close tabs on the money coming in and out of their business, they can find themselves in a difficult situation, especially during the economic pressure of the pandemic.
Second, women should not feel like they need to do everything themselves. They can seek the input of some key advisors—whether a group of mentors or a formal board of directors—who can provide invaluable insight and help them get over any hurdles. These advisors can often point to new directions to pivot when the business experiences any trouble.
Finally, Million warns women about dipping into their personal savings to help save a business that is in a bad situation. Not all companies will survive the pandemic, and understanding when it is time to fold can be difficult. When the time comes, entrepreneurs must realize that putting more money into the venture will not save it and can also put them into their own financial crisis.