Missed Payments, New Businesses, and Online Conferences: How Resilient Are Entrepreneurs Feeling During COVID-19?
Normally we’d be sharing our third annual Women in the Independent Workforce report, but with the effects of the COVID-19 pandemic still a reality for tens of thousands of businesses, we decided to take a closer look at how resilient self-employed people were feeling about their business, with a particular focus on how self-employed women were affected.
✅ On average, women-owned businesses are taking nearly three times longer to recover from the financial setbacks brought on by COVID-19 compared to businesses owned by men
✅ Self-employed women in industries that rebounded quickly are still under-indexing and recovering much slower than their male counterparts (for example, the construction industry)
✅ Nearly 60% of women say it will take them longer than 6 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
About The Study
The Business Resiliency During COVID-19 study took place between July and September 2020, and included proprietary data from the FreshBooks platform (including business health metrics like adding expenses, revenue and number of clients) for self-employed women and men. The report also used insights from a survey that was administered to 2,200 self-employed women and men, which asked them questions around how their business was performing and adapting during the pandemic. The report looks at multiple industries, including Education, Social Assistance, Construction, Admin Services and Waste Management, among others.
Women-Owned Businesses Taking Three Times Longer To Recover Than Businesses Owned By Men
When looking at invoice revenue across all industries for men and women business owners, you can see that businesses owned by men experienced a short-lived dip (3 weeks) out of range, compared to women-owned businesses who experienced a 10- week dip out of average range, and still have not recovered to pre-COVID levels.
There are multiple reasons why this is 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 are also more likely to have taken over childcare responsibilities when schools shut down.
Self-Employed Women Are Less Optimistic About Their Recovery Than Self-Employed Men
When we asked over 2,200 self employed men and women, we were shocked to see the scale of businesses who reported seeing a decline in revenue and clients once COVID-19 restrictions started happening.
With such a significant number of business owners seeing a decrease in revenue, it’s clear that entrepreneurs are facing an uphill battle when it comes to recovering to levels seen before COVID hit. When asked about estimated recovery time, more than half of respondents are expecting their recovery to take longer than six months.
What is notable, however, is when we look at estimated recovery times between men and women-owned businesses, we see a significant discrepancy, with women reporting that they expect much longer recovery times for their finances compared to men. Nearly 60% of women business owners expect to take more than six months to recover, compared to 47% of men.
Women-Owned Businesses Are Under-Indexing in Industries That Have Seen A Boom In Business
The discrepancies between men and women-owned businesses are more clear when looking at industries that are otherwise seeing a boom – for example, construction. When you remove gender as a variable, the construction industry is booming! With people being stuck inside, they are keen to beautify their home. When you look at the gender split, you can see that women-owned construction companies are not seeing the same boom as construction companies owned by men:
Even in women-dominated industries like the Administrative and Support Services sector, women-owned businesses are taking significantly longer to recover than businesses owned by men:
COVID-19 Has Affected The Bottom Line For Most Businesses
While it’s clear that self-employed women have been hit harder than their male counterparts, it’s also important to note that all businesses have had to undergo a difficult time during the pandemic. We wanted to do a pulse check on the small businesses in the FreshBooks community, so we asked all 2,200 survey respondents to describe in their own words how the pandemic has affected their business. Late payments, non payments, and cancelled events were just a few of the things that small business owners mentioned having to face during the pandemic.
Lowered budgets, affordability issues and non-payment was a recurring theme with respondents – with multiple people mentioning that they were required to lower their rates to retain business:
But It’s Not All Doom and Gloom – There Are Some Success Stories
If COVID-19 has taught us anything, it’s the value of being able to adapt to new situations, no matter how difficult. Many people reported starting new businesses during the pandemic, or seeing an uptick in business – especially true for people who work in marketing and graphic design, since many businesses needed to invest in their online presence.
Another common theme with some service-based business owners was a quick recovery when the lockdowns started to lift – with multiple businesses reporting that the best months they’ve had were during the pandemic.
We’ve all seen so many success stories with new businesses, or existing businesses that pivoted during COVID. With all the changes going on right now, have you decided to take the leap into starting your own business? If that’s the case, FreshBooks wants to help you get started. Download our handy business plan templates and start thinking about how you can use this time to make your dream a reality.
About the Study:
The Business Resiliency During COVID-19 study combines survey data from 2,200 FreshBooks U.S. customers with business data from over 10,000 small businesses in the United States. Survey responses were collected online between July and September 2020. The FreshBooks data science team examined a range of metrics (e.g., revenue, expenditures, invoice amounts) to infer the impact(s) of COVID-19 on overall business performance in aggregate as well as by gender and industry.
FreshBooks is the #2 small business accounting software in America, with paying customers in 100+ countries. The company has helped more than 24million people process billions of dollars through its easy-to-use invoicing, time-tracking, expense management, and online payments features. Recognized with 10 Stevie awards for the best customer service in the world, the company’s mantra is to “execute extraordinary experiences everyday.” FreshBooks is headquartered in Toronto, Canada, with offices in Amsterdam, Netherlands, San Luis Potosi, Mexico, and Raleigh, North Carolina, USA. Learn more at www.FreshBooks.com