WASHINGTON, D.C.— Female-owned small businesses have been disproportionately affected by the coronavirus pandemic and corresponding economic crisis, and they are now less likely to expect future revenue, investment and staffing growth, according to data released today by the U.S. Chamber of Commerce.
Female-owned small businesses are more likely than male-owned small businesses to report a significant decline in the overall health of their business since the start of the pandemic and less likely to report that they have added staff, according to the poll. Female-owned small businesses also lag behind when assessing investment plans, revenue projections, and staffing plans for the coming year, evidence that they do not anticipate recovering as quickly as their male counterparts.
Before the pandemic began, 67% of male-owned businesses ranked the overall health of their business as “somewhat or very good,” compared to 60% of female-owned businesses. In July 2020, that number had fallen 13 points to 47% for female-owned businesses, while the number of male business owners reporting “somewhat or very good” health had a small shift of only 5 points to 62%. [1],[2]
Meanwhile, the number of female-owned and male-owned businesses that had increased staff in the past year was nearly even back in January (18% and 17% respectively). Now there’s a 10-point gap, with only 15% of women-owned businesses in July reporting an increase in employees over the previous 12 months, versus 25% for male-owned businesses.
“We cannot allow this pandemic to set back a generation of entrepreneurial women. Congress’ inability to provide relief to America’s small business owners is unconscionable and inexcusable,” said Suzanne Clark, President, U.S. Chamber of Commerce. “We need to help struggling small businesses safely reopen and stay open so they can continue to grow and create jobs in their local communities. The health and existence of small businesses is essential to the economic recovery of our nation.”
When asked about future plans and expectations, there was little to no statistical difference between female-owned small businesses and male-owned small businesses back in January. Six months later, female-owned small businesses now lag behind male-owned small companies in all three forward-looking measures of the poll: investment plans, revenue projections, and staffing expectations.
- Investment plans: In January, 32% of female-owned small businesses said they planned to increase investments in their business in the coming year, similar to male-owned businesses at 28%. In July, that number remained unchanged for female owners but male-owners saw an increase of 11 percentage points, rising to 39%.
- Revenue projections: In January, 63% of female-owned businesses predicted their revenues would increase in the coming year, comparable to male-owned businesses (59%). In July, that number had fallen 14 percentage points for female owners to 49%, while male owners remained statistically unchanged (57%).
- Staffing expectations: In January, 31% of female-owned businesses said they expected to increase the size of their staff in the coming year, nearly the same as male-owned businesses (30%). In July, there was a 12-point difference between female owners (24%) and male owners (36%).
“My 40-year old catering company has made it through ups and downs in business before, but I don’t see us surviving COVID-19 without additional help from our elected representatives in Washington,” said Maxine Turner, founder of Cuisine Unlimited based in Salt Lake City, Utah. “We desperately need another boost from the Paycheck Protection Program. Time is of the essence as so many of us have exhausted our funds and have no additional resources to keep our companies afloat until this pandemic is under control.”
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[1] In Q1 2020, the survey was conducted via phone. Beginning in Q2 2020, the U.S. Chamber of Commerce Small Business Index survey has been conducted via a monthly online survey, in place of the typical phone-based approach. This methodological shift is in response to anticipated lower response rates in dialing business locations as a result of mandated closures related to the COVID-19 outbreak. While significant changes in data points can largely be attributed to the recent economic environment, switching from a phone to online approach may have also generated a mode effect.
[2] Some variation in data may be explained by more women-owned businesses operating in the retail, services, and healthcare/professional services industries, which have been hit particularly hard due to social distancing guidelines.
