Special report: Access to funding remains a challenge for women-owned businesses
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Originally Posted On: https://quickbooks.intuit.com/r/small-business-data/nawbo-survey-2022/
Easier access to funding is where women-owned small businesses need the most help right now according to a new survey* commissioned by the National Association of Women Business Owners (NAWBO) in partnership with Intuit QuickBooks.
Almost half (49%) of the 1,036 NAWBO members who completed the survey say extra funding would have the greatest impact on their business today, if they could get it. In order of preference, they want expanded access to government grants, tax breaks, and business loans.
Smallest businesses need the most help
The smaller the business, the greater the funding challenge. Overall, just one in six respondents (15%) say they have ever received a private loan. For businesses with less than $50,000 in annual revenue, this drops to just 3%.
Access to funding is important for all small businesses, but another survey commissioned by QuickBooks—published in April 2021—has found that it can be a particular challenge for those owned by women.
Hiring challenges persist despite efforts to attract and retain talent
As the first chart (above) shows, “help with hiring” is second on the list of NAWBO members’ priorities. Excluding respondents without employees, one in five (20%) say this would have the biggest impact on their business.
More than a third (36%) have posted new job openings over the past month. Of these, more than two-thirds (67%) say hiring is harder than before the COVID-19 pandemic. Only 5% say it’s easier.
This is not a new trend, of course. Hiring challenges have been widely reported since last fall, when another NAWBO survey found 40% of respondents struggled to fill recent job openings.
Could pandemic changes ease hiring challenges?
Hiring is important to the majority of NAWBO members—even those without current job openings. More than three in five respondents (62%) currently have employees while more than seven out of ten (72%) have contractors. Among those who say hiring is getting harder, a lack of candidates or candidates’ lack of skills are considered the main causes.
To attract and retain talent, two-thirds (66%) are offering new benefits, while roughly a third (38%) provide health coverage. One in six (16%) have introduced paid sick leave during the pandemic. One in ten (11%) now offer paid family leave.
As we’ll discover, below, these are just some of the changes made during the pandemic. For many, it’s permanently changed the way they run their business.
Remote work and digital technology are here to stay
As the chart above shows, more than half of the respondents (52%) expanded remote work during the pandemic. Almost all (97%) of those who introduced these new policies say they’re here to stay. And this makes sense, because the majority operate in industries where remote work works well. More than half (52%), for example, specialize in advertising, marketing, finance, or professional services.
The shift to remote work was part of a much larger COVID trend: the rapid adoption of digital technology. Overall, 7 out of 10 (70%) respondents invested in new technology during the pandemic. The most popular were ecommerce, customer relationship management tools, and technology which connects remote teams.
Has the investment in technology paid off?
Women-owned businesses are innovating. New technology is widely embraced. According to the survey data, those with low annual revenue are just as likely to invest as those with high annual revenue. Whatever their budget, they know they need to make it a priority for growth.
Are these investments paying off? Without question, they are. As the chart below shows, fully 100% of the businesses that introduced new technology during the pandemic say it’s benefiting them. More than a third (38%) report faster growth as a result. More than nine out of ten (94%) say the innovations are now a permanent part of their business.
What’s the most effective digital technology to invest in?
The most valuable digital technologies, according to the respondents, are those that connect essential parts of their business: from demand generation to financial management.
For example, more than two in five (45%) say better use of social media will contribute to faster growth over the next year. More than one in five (21%) say growth will come from financial technology—also known as fintech—that offers access to funding. Overall, almost eight out of ten (79%) say better use of digital technology will boost growth.
Fast, easy access to technology is essential
The growing reliance on digital tools may explain why one in ten respondents (10%) say better “technology literacy” would have an ever greater impact on their business than more funding. Sole proprietors and businesses with lower annual revenues are the most likely to need this.
Underpinning all of this, of course, is the internet. But roughly 1 in 12 respondents (8%) say they don’t have affordable access to a reliable, high speed connection. Again, it’s lower revenue businesses that struggle most here. They are least likely to report having fast internet access—another significant barrier to small business success.
* Sample and methodology
Online survey of 1,036 members of the National Association of Women Business Owners (NAWBO) in May 2022, jointly commissioned by NAWBO and Intuit QuickBooks. Respondents’ businesses are located in 47 states and Washington, D.C., with roughly $500,000 in annual revenue, on average. Almost two in five (38%) are sole proprietors. More than half (52%) have up to 25 employees. More than a third (35%) are in the professional services industry, 9% are in advertising and marketing, and 8% are in financial services. More than a third of the respondents’ businesses (34%) are 20+ years old, while 11% are less than 2 years old.
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