2021 Predictions for Women-Owned Businesses During COVID

Dec 16, 2020 | First Person

By Jessica Walrack, writer at Fundbox  

Before COVID-19 hit, woman-owned companies were thriving—growing five times faster than the national average and accounting for 42% of all U.S. businesses. But how will the pandemic impact this momentum in the coming year? Women and minorities are, unfortunately, being hit harder than their counterparts due to a variety of disparities. Still, many are looking to the future with hope. 

Here’s a closer look at the 2021 predictions for women-owned businesses.

Women-owned business statistics

In a recent survey, you can gain a glimpse into the minds of female business owners.

  • Overall business health: Female business owners who ranked their overall business health as “somewhat or very good” fell from 60% in January of 2020 to 47%. 
  • Revenue: Less than half of female business owners believed their revenues would increase in 2021, compared to 57% of male owners. 
  • Investments: About 33% of women business owners planned to increase investments in their business, compared to 39% of men. 
  • Staffing: 24% of female business owners expected to increase staff size, compared to 36% of male business owners. 

Women business owners are feeling less confident about overall business health, revenue, investments and staffing than their male counterparts. The following disparities can give insight as to why. 

Financial disparity 

Although female startups generated 10% more cumulative revenue over five years than their male counterparts, investments in female-founded or cofounded companies averaged only 44% of what males alone received. 

We saw this disparity in the allocation of Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDLs) from the Small Business Administration. Large banks primarily managed the PPP funds, and they went mostly to bank customers, which do not equally represent minority and women business enterprises. Many were left in need of business loans or grants for women-owned businesses. 

Immediate risk disparity 

Women and minorities also own a disproportionately higher percentage of businesses that are at immediate risk due to COVID such as those in food service, retail and accommodation.

Domestic responsibility disparity

Further, women are harder hit by the uptick in domestic responsibilities. During the pandemic, a survey found that, on average, women were spending 30 more hours per week on domestic labor than pre-pandemic, 15 hours more per week than men. 

Joan Williams, Founder of the Center for WorkLife Law, noted that by opening the economy without childcare or schooling options, a generation of mothers could lose their careers.

Predictions for women-owned businesses during COVID

Despite the above disparities, women have risen to an economic challenge before. Between 2007 and 2012, minority- and women-owned businesses added 1.8 million jobs in the U.S., while companies owned by white males lost 800,000 jobs. Many believe women will play a critical role again. 

“The COVID-19 pandemic will likely result in many women (and men) leaving the traditional workforce. As a result, I predict that many women will launch freelancing careers or small businesses that they can manage remotely from the comfort and safety of their homes.”
Elle Meager, founder and CEO of Outdoor Happens

“We can’t be 100% certain what the post-pandemic business environment looks like. What we can say is global and economic challenges like those we face during this pandemic highlight the next generation of problems the world needs to solve to move forward—creating an opportunity for new companies, markets and industries to rise up.”
Alyce Herndon, President and CEO of Onyx Business Consulting

“I foresee increases in networking and partnerships in the coming year. Despite the reopening of the economy, female-owned businesses have continued to struggle. Given the questionable discrepancies in the allocations of loans based on race and gender, we’ll need to rely on each other for support.”
Michelle Devani, Founder of lovedevani

“I predict that women business owners in 2021, and beyond, will become part of strong communities. Many women business owners have emphasized the importance of finding community and reaching individuals that are also in their respective fields through Facebook groups and Zoom meetups.”
Deborah Sweeney, CEO of MyCorporation.com 

“There will be a contraction in the amount of money women spend on their businesses in the next six months and an increase in collaboration among women who know they need to band together to survive. Innovation is afoot. By December 2021, we’ll be seeing the fruits of those creative endeavors, but it won’t be apparent until 2022 when the world more fully heals.”  
Hope Katz Gibbs, Owner and Founder of Inkandescent™ Inc.

The overall message from women and minority-owned businesses is hopeful. We are communicators, supporters and innovators. Despite disparities and challenges, we will not give up. We will band together and make it through this crisis, leading recovery efforts as we have before. 

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