- Date : 25/05/2021
- Read: 4 mins
The COVID-19 pandemic occasioned economic and social setbacks that disproportionately impacted women entrepreneurs
While women play an important role in the country’s economy, they continue to remain neglected in the country’s workforce. Indeed, women entrepreneurs have long faced difficulties in gaining access to capital and balancing career and family. The pandemic has been especially devastating for women entrepreneurs. The ‘new normal’ brought about both more challenges and changes for women entrepreneurs.
According to an analysis conducted by consulting firm Bain & Company in collaboration with Google and AWE Foundation, where they surveyed nearly 350 women entrepreneurs of small or micro businesses, these were the most common challenges faced:
1. Shortfall of financial resources
The pandemic increased the crunch on working capital and widened the already existing gender disparity in access to finance. Businesses faced immediate financial constraints due to lower sales and delayed payments. To manage cash flow, many women entrepreneurs were forced to downsize. The need to invest in workplace safety – such as sanitisation services, protective gear, and remote communication – further strained their business capital. Poor growth prospects owing to muted demand prevented women entrepreneurs from seeking financial support. Lack of financial resources will persist to be a problem when demand picks up.
Related: 8 Must read books for female entrepreneurs
2. Increased domestic responsibilities
In the survey, domestic responsibilities emerged as one of the major obstacles to running a business during the pandemic. Factors such as school closures and confinement of the entire family at home led to a disproportionate share of domestic work falling upon women. About 43% of women experienced a decline in productivity when working from home as responsibilities and distractions increased.
3. Difficulty balancing career and family
While women have always felt the pressure of integrating their career with family life, it became more significant for entrepreneurs to juggle both during the pandemic as they began working from home while simultaneously working for home. Working from home, while enabling greater flexibility in ordinary circumstances, has had a mixed impact on women entrepreneurs during the pandemic. As lines between working hours and family time blurred, women entrepreneurs struggled between balancing their career and devoting time to family.
Related: A working woman's guide to maintaining work-life balance.
4. Reduced consumer demand and dwindling revenues
Sectors that were directly affected by lockdowns are those in which women have most of their small and medium enterprises, such as hospitality, retail, beauty salons, etc. As consumers reprioritised demand and supply chains got disrupted, subdued consumer demand shrank revenues further. According to the survey, for more than 20% of women entrepreneurs, revenues have all but disappeared. About one-third of the women surveyed reported a revenue cut of up to 75%, and an additional set of nearly 20% have lost around a quarter of their revenues. For many businesses, orders simply stopped flowing in, and many expect this scenario to persist.
Related: 10 Bank loan schemes for women entrepreneurs
How they can recover
- Embrace technology and remote interaction: As suppliers, customers, and employees have adopted remote models, transactions have moved online and there is an increasing need to rapidly adapt to digital means to conduct business. Shifts towards virtual or remote working have the potential to provide a more conducive environment for women entrepreneurs, who often struggle to balance other responsibilities with their career. More widespread adoption of remote work will make it easier for them to run their business successfully.
- Alter the business model: While planning for recovery, women entrepreneurs must be quick to respond by altering their business models and cost structures to include new products or services, digital sales and delivery channels, and revamping marketing functions. Acquiring new skills can also accelerate recovery.
- Enable financial inclusion: Governments will play a vital role in recognising and elevating women’s entrepreneurship. Funding is a critical enabler for women entrepreneurs to start their recovery process. Quick, easy, and efficient access to funds through loans tailored specifically for women-led businesses can help them successfully realign and scale back up.
COVID-19 brought about some cataclysmic changes, such as an acceptance of remote working and acknowledgement of women-led businesses’ profound contribution to the economy. This may have the potential to level the playing field for women. The challenge is to get through the fracturing short-term impact and, at the same time, devise measures that will enable women to take advantage of these transformative changes.
Despite the disruptive impact of the global pandemic, the combined efforts of women entrepreneurs, industry participants, and favourable government policies can serve to convert these challenges into opportunities. Do you know these government schemes that can help women entrepreneurs in India grow their small businesses.