KALAMAZOO, Mich. — From job losses to significant drops in revenue, a new report showed women-owned businesses were bearing the brunt of the economic fallout from the COVID-19 pandemic.
According to a new study by accounting software firm Freshbooks, on average, women-owned businesses took nearly three-times longer to recover from the financial setbacks brought on by COVID-19 compared to businesses owned by men in the United States.
“We looked at what was happening and saw women-owned business was taking 10 to 12 weeks longer to recover back in March when social distancing measures were put in place,” Paul Cowan, the Chief Marketing Officer at Freshbooks said.
Key Highlights from the Report:
- Nearly 60% of women said it will take them longer than six months to recover their business to previous COVID levels, compared to 47% of men.
- Industries with predominantly women-owned businesses (e.g., education, social assistance, etc.) were among the hardest-hit industries during social distancing regulations.
- Women are more likely to be caring for children or the elderly during the pandemic.
- Self-employed women in industries that rebounded quickly are recovering much slower than their male counterparts. For example, the construction industry, as seen below.
“As we’ve been looking at the data it’s really about understanding where the opportunities are and making sure they have time to put back into building their business,” Cowan said. “The big thing is really around cash flow management, making sure they can plan accordingly and manage their expenses. A lot of times that is the most challenging thing for small business owners because they are not financial managers.”
According to the report, there are multiple reasons why this was happening, including lockdowns and social distancing guidelines that affected women-dominant industries like education and healthcare more than male-dominated industries like construction. In addition, women were also more likely to have taken over childcare responsibilities when schools shut down.