The negative impacts of COVID-19 are experienced very differently by male entrepreneurs and female entrepreneurs. The Royal Bank of Canada recently released a report on these differences, stating that “in a matter of months, the COVID-19 pandemic knocked women’s participation in the labour force down from a historic high to its lowest level in over 30 years.”
The World Economic Forum has a similar message, stating that “COVID-19 is the biggest setback to gender equality in a decade.” So what does this mean for female entrepreneurs who are trying to keep their businesses alive amidst the chaos?
As the cofounder and COO of a mental health company and a single co-parent of two kids, COVID-19 was an articulate illustration of what can happen when mothers in business have it all — all at once. Unlike many companies, ours didn’t experience a decrease in business during lockdown.
We were in demand with clients urgently seeking solutions to support their teams. At the exact same time, schools closed, my kids were home all day and both grandmas were kept safely off limits for babysitting.
My business needed me full time and more at the exact same time my kids needed me full time and more. I made the difficult — and financially challenging — decision to cut my hours to part-time so I could care for my kids, homeschool them and do my best to ensure the whole experience wasn’t traumatic for them. And I wasn’t alone. Female entrepreneurs in our community and around the world were facing the same simultaneous challenge of needing to pour 100 per cent of their time and energy into their company and 100 per cent into their family.
The Gender Gap
Even without a global pandemic in the mix, female-led ventures face more hurdles than their male-led counterparts. Female entrepreneurs get less investment from angels and VCs. They get less debt financing from the big banks. As CEO of the Forum for Women Entrepreneurs (FWE), Paulina Cameron has witnessed the existing challenges and has a rare glimpse into the breadth of what female-led B.C. companies are facing.
“COVID-19 and the responses to it simply exacerbated barriers and inequities — seen and unseen — with added and unique challenges facing racialized women, Indigenous women, women with disabilities, immigrant women, women in rural areas, and older women engaged in entrepreneurship.”
Why are women-owned businesses having a tougher time surviving the pandemic? If a sudden primary caregiving role didn’t disrupt their productivity, it likely impacted that of at least some of their team members, as female- led companies hire more female employees. COVID and its related safety protocols have also disproportionately affected industries like travel and personal services where female-led companies are more common.
Cameron noted that the pre-existing challenge of a lack of financing and investment also means that an “under-resourced business will have minimal or no cash flow reserves, leaving it particularly vulnerable to external changes. No or little cash in the bank makes it hard to buy yourself time to transition to online or to shift processes or logistics and to be able to keep up with regular expenses when revenues become compromised.”
The Way Forward
The World Economic Forum has made it clear why we need to act to help these companies get through the pandemic: “Women entrepreneurs have overcome so many barriers to get their businesses thriving and to overcome poverty. And it is precisely these women that hold the power to face the gigantic task ahead.” Female entrepreneurs will play a key role in rebuilding our economy. How can we help them survive?
More Inclusive Wage Subsidies
Female-led companies have a greater percentage of contractor/part-time labour than male-led businesses. Many female entrepreneurs are self-employed and pay their taxes directly as a sole proprietor, rather than through corporate payroll taxes. As a result, subsidy programs based exclusively on traditional employee payroll excludes many companies that need them.
Flexible Criteria for Corporate Loans
Federal business loans during the first wave of COVID were based on a decline in year-over- year revenue. This meant that start-ups that were growing substantially, companies with a healthy AR but with COVID-delayed cash flow, bookings and orders cancelled months in advance and other financial realities didn’t qualify for assistance. The criteria needs to be broader and more flexible.
Practice Gender Equity
While financial challenges are very real for many families, couples also need to consider other impacts of gender inequality in their families. What are the long term impacts to a woman’s business and career if she has to step out for an indeterminate amount of time to provide care? While deferring to the biggest earner may seem like the obvious solution, look at the whole picture and consider the long term.
Universal Child Care
Providing safe, effective and affordable child care is key to keeping working moms, who are also entrepreneurs, in business and those who aren’t entrepreneurs able to keep their jobs. Yes, COVID makes this more complex as there are a myriad of health challenges to consider. But without child care and gender equity, many women with children don’t stand a chance of regaining their pre-COVID success and building on it.
Become Customers + Incentivize Investors
Governments at all levels can create targets for the volume of goods and services they procure from female-led companies. They can also create tax incentives and credits for angels and VCs investing in women entrepreneurs.
Continue Reading…How Leaders Can Nurture Inclusive Workplaces
Erin Skillen is a writer, handles Creative + Ops at Amira Health, is a harried co-parent of two kids and six chickens, and is co-host and producer of the new Demarried Life podcast.