Caroline Fairchild (Host, LinkedIn News Live & Editor At Large, LinkedIn News302 articles)
By March, Sneh Kadakia knew she had a big problem. She had been planning to launch her startup — a platform that connected professionals with work spaces in boutique hotels — the following month.
Conversations with her husband — a doctor who was working for hospitals in New Jersey and Pennsylvania — gave her an early glimpse into how the pandemic would impact her business and the global economy as well.
“I realized it was the end of the company,” said 34-year-old Kadakia, who invested $85,000 of her own money into the business. “The beauty of what we were doing was using public open spaces. In today’s world, that is a little cringe-worthy.”
While women across corporate America continue to bear the brunt of the COVID-19 crisis, female business owners face a unique set of challenges. Women-owned businesses — which are more likely to be in sectors like retail, hospitality and marketing — have been hit hardest by the pandemic and have suffered a closure rate that’s 25% higher than male-owned businesses, according to the National Bureau of Economic Research. And the setbacks are shaking their confidence: 36% of male-owned businesses plan to increase staffing in the coming year, compared to just 24% of woman-owned businesses, according to an August study by the U.S. Chamber of Commerce.
Sery Kim, the assistant administrator for the Office of Women’s Business Ownership at The Small Business Administration, has had a front row seat to these issues throughout the pandemic. Kim supports 117 Women’s Business Centers across the country, and she is working to open even more. And while her office was given a one-time cash infusion of $48 million through the CARES Act to help women-led businesses stay afloat, she is hearing from thousands of female business owners that capital alone isn’t going to ensure more female-led businesses survive the crisis.
“It’s a misnomer that the No. 1 barrier to women becoming entrepreneurs is access to capital,” she said. “The No. 1 barrier to women becoming entrepreneurs is access to childcare. Period. Full stop. That has been exacerbated because of the coronavirus.”
Cate Luzio, the founder and CEO of female collaboration space and network Luminary and a former Wall Street executive, agrees money can only go so far. While a sizable portion of Luminary’s more than 1,000 members asked for guidance on how to access capital during the crisis, a greater share wanted access to business and financial advice. Luzio began to team up with companies like Unilever and UBS to give out free Luminary memberships — which comes with access to the network as well as weekly trainings and seminars — to 450 additional female business owners by the end of the year.
“A check really only pays a few bills,” she said. “Money doesn’t solve everything. It is what you are doing with it and then how do you recover and rebuild what you have.”
The setbacks that female business owners are facing during the pandemic may be keeping aspiring entrepreneurs on the sidelines. Carolyn Childers and Lindsay Kaplan are the founders of Chief, a private networking group of 3,000 female senior leaders across 1,700 companies. Prior to the pandemic, many Chief members aspired to become business owners themselves. But that entrepreneurial spirit has waned among senior executives as this crisis continues, they said.
“You are barely keeping your head above water, holding down the job that you have and managing childcare, that it is nearly impossible to start your own thing,” said Childers. “I don’t think that desire to start a business has gone away, but it’s postponed.”
While at home in Robbinsville, N.J. taking care of her three-year-old son, Kadakia said there were many months during the pandemic where she too considered going back to a traditional role in corporate America. With her husband suffering a 50% pay cut during the pandemic, Kadakia applied to several jobs and received a full-time offer.
She opted for a riskier path. She adapted her business model to provide safe co-working spaces for remote workers in the Greater New York area. The first location of her new company — From Here — will open in February in Plainfield, N.J. and she is $75,000 short from raising enough capital to open a second location, in Princeton Junction, N.J., in April.
Still, the childcare responsibilities that have weighed on millions of women throughout the pandemic continue to put doubts in Kadakia’s head.
“Every time I get a note or a call from my son’s daycare, I fear they are closing again,” she said. “That is the biggest challenge here.”
Despite the obstacles, many other female entrepreneurs share Kadakia’s entrepreneurial persistence. In a recent survey conducted by Luminary, 72% of women thinking about starting their own business are more determined as a result of the pandemic. This gives Luzio and other leaders in the space hope.
“Women are resilient,” she said. “We are normally the caregivers of our households and we are problem solvers. If the problem is that I don’t have a job or my husband is out of work, we are going to figure it out.”
What’s Working
“It’s my country, too.” A 96-year-old World War II veteran is encouraging female veterans to wear hats with their military branch — like their male counterparts do — to drive awareness of their importance in our armed forces. “Women veterans are invisible,” she said. [NJMonthly]