How women entrepreneurs are coming through pandemic

While the COVID-19 pandemic has had a disproportionately negative impact on women in the general workforce, women entrepreneurs bolstered their workforces, sharpened their strategy and strengthened their companies, according to the Women Entrepreneur Business Outlook Survey 2021 conducted by EY Global Limited and the Women Presidents’ Organization (WPO), a peer advisory group for multimillion-dollar, women-led companies.

“The findings of this year’s Business Outlook Survey underscore what we hear from our members every day; they are ready to move forward,” said Camille Burns, CEO of the WPO. “While there has been a distressing amount of loss over the past year, and some geographies and industries were more heavily impacted than others.” 

The annual joint survey, now in its fourth year, was conducted between April 16, 2021 and May 9, 2021.,It included responses from 374 women entrepreneurs, including members of the WPO and alumna of the EY Entrepreneurial Winning Women™ program. The survey centered on their experiences running their businesses during the pandemic. Insights include a look into revenue performance, employee impact, shifting business priorities, community engagement, and forward-looking goals and strategies. Respondents were mainly based in North America (80%) and their companies generated annual sales between $1 million and more than $500 million.

Team adaptability was critical to survival

The survey found that women entrepreneurs who achieved revenue gains (51%), mainly attributed that to their team’s ability to adapt to change (66%) and increased demand for their products and services (63%). While revenue losses were still common, respondents noted they were largely attributed to factors beyond their control, including sector-specific performance being severely impacted by the pandemic (45%) and the inability to replace business and customers lost in the downturn (17%).

Top-line revenue more than quadrupled for Houston, Texas-based Spectrum Uniforms, which sells medical apparel and accessories. Respondent Chandani Radia, Managing Director of Spectrum Uniforms, attributed the company’s success to operating in an industry essential to supplying products for combating the pandemic. However, she also attributed gains to pivoting their supply chain strategy, operating according to overarching values and bringing in the right resources at the right time. “We had to scale quickly, and there is no case study for what happens when you grow 3,000% from one month to the next … . We brought in talent where we needed it and consulted experts to make sure we were moving in the right direction because we did not have room to make mistakes.”

Employees of women-owned businesses weathered little to positive job or salary impact

Even though the pandemic caused a dramatic spike in US unemployment peaking at 14.8% in April 2020¹, only about one-third (34%) of the survey respondents reported a reduction in their workforces, with 48% reporting no direct impact and 18% increasing their headcount during this time. In terms of compensation, 45% reported no impact on employee salaries during the economic downturn, while 34% of women founders increased their staff’s salaries during 2020.

Growth Acceleration Partners, a technology solutions company located in Austin, Texas, generated revenue gains during the pandemic and was able to avoid layoffs. “The executive team was willing to forego salary if needed, borrow money if needed, and the rest of the team responded,” said CEO and Co-Founder Joyce Durst. “The entire team became singularly focused on doing everything they could to help each other, each other’s families, and our clients get through this challenging time.”

Women entrepreneurs are optimistic post pandemic, seeking capital to expand or sell their business

As the US reaches critical levels of mass vaccination and the economy reopens, women entrepreneurs reported a level of optimism attributed to having rethought their business strategies (68%) and strengthened their leadership teams (63%). An overwhelming majority (79%) of respondents have a positive outlook about their company’s ability to grow in 2021 compared with 2020, with 76% of respondents expecting to hire in 2021. 

With more than half of the respondents reporting a strengthened ability to compete in their industry (61%), 34% are looking to the future and are interested in raising capital to expand their business. Women entrepreneurs are mainly seeking to raise funds using a bank line of credit (42%), a government loan or grant (32%), or from private equity (28%). Forty-two percent of respondents have a defined exit strategy, with 38% planning to sell to a strategic buyer.

“As another source of expansion capital, private equity shouldn’t be overlooked by women founders,” said EY Americas Solutions Leader Cheryl Grise, who also serves as the Entrepreneurial Winning Women North America Executive Sponsor. “Depending on how you structure the deal, there can be many advantages to working with a PE firm, including large amounts of funding and an experienced team who helps you re-evaluate your business to maximize its value.” 

Innovation, talent retention and DEI are top of mind moving forward

Women entrepreneurs expressed how the pandemic crystallized and shifted their business priorities. Nearly three-fourths (71%) of respondents noted that the pandemic changed how they measure the success of their business through an increased focus on employees. Additionally, 73% put a special emphasis on diversity, equity and inclusion (DEI) as a priority within their business, with 70% having leadership teams comprising 50% to over 90% women, people of color, people with disabilities and members of the LGBTQ community. An overwhelming majority (81%) also seek to lift other women up by mentoring women through various organizations.

When looking ahead to the post-pandemic future, participants wanting to scale their business in the near or medium term are planning to strengthen their innovation (51%), implement lean or agile practices (49%), undertake strategic transactions (42%) and further digitalize their operations (38%).

Much like other business leaders, over half (54%) see finding and retaining quality employees as the greatest threat to their bottom line in 2021, with 66% naming talent as a key factor in increasing their company’s agility and ability to respond quickly to a changing operating environment.

“We always knew that women entrepreneurs were resilient, but this pandemic revealed their strength and adaptability more than ever before,” said Maranda Bruckner, Entrepreneurial Winning Women North America Program Lead. “These impressive founders believed in themselves, their businesses and their vision and are forging ahead with courage and optimism.”