The year 2020 hasn’t been kind to a lot of us, and perhaps even that is an understatement. Reeling from the devastating impact of COVID-19, the world is trying hard to make a recovery. From a business standpoint, the effect of the pandemic has been somewhat varied. Different industries/groups have had to endure different types and levels of crises.
However, one group has had to bear the brunt of the economic catastrophe unleashed by the novel coronavirus. Female entrepreneurs (and working women in general) have been hit especially hard by the recession that gripped the world following Covid-19. Several women-owned businesses both at home and abroad couldn’t survive and needed to be shut.
Getting the Short End of the Stick
As per a recent US Chamber of Commerce survey, the ratio of female business leaders who ranked the overall health of their enterprise as “somewhat or very good” was 60% in January 2020. By July, this number had declined to 47%. During the same period, the percentage of male entrepreneurs who reported business health to be “good” only witnessed a milder impact from 67% to 62%.
Moreover, women are now less optimistic about their ventures attaining any significant success in the near future. Less than half of the female entrepreneurs surveyed by the Chamber of Commerce in July expect revenues to increase in 2021. In contrast, 57% of men are hopeful of that happening to their companies. Similar tendencies were witnessed with regard to staffing and investment decisions.
These numbers could be an indication that female entrepreneurs are likely to find it harder to recover than their male counterparts.
Preparing a Fallback Plan As a Priority
“Crisis breeds opportunity” and while the challenge is big, there are opportunities to tap into. Here’s how you can get started if you want to make your business crisis-proof.
As a business leader, you need to be able to trust the people around you at all times. This becomes even more important during tough situations. Besides, research shows that a crisis is better managed by a team. So, have a trusted group of associates in place at all times even if it consists of a few people with core competencies to run your business.
In general, your crisis management team should be made up of department heads and other key personnel within the organization. Getting an external advisor or two onboard is a good idea as well, especially for areas that aren’t your expertise.
Creating such a team can have multiple benefits such as greater accountability and a focus on possible solutions rather than problems. The members of this group should also be open to learning new things and undergoing training when needed. This will enable them to expertly handle unfamiliar situations in the future.
This is a needs-based list whereby you classify the immediate, secondary, future, and “if only” needs of your business. The idea is to keep the venture running as smoothly as possible in the present moment.
Think long and hard about every aspect. Factors like employees, products/services, customers, facility, work hours, health insurance plan; consider all of these. Jot down all your ideas and then narrow down the list to a top three or top six.
These are the things that must be taken care of immediately to keep the wheels of your company turning. Allocate your resources for this bunch and the other not-so-urgent items accordingly.
Small businesses can struggle to keep their financial statements healthy. However, the value of a contingency fund can’t ever be overestimated, especially in the current post-crisis scenario. No one knows how long this pandemic will be around, but we do know that it will be a while before it goes away.
So, why not maintain a contingency fund that lasts you at least a few months before you can start to recover your losses and do business profitably again. This rainy day coffer should ideally contain enough money to keep your business running for some months in case of revenues suddenly dry up.
Irrespective of a global crisis, markets tend to be volatile even in regular times. This is when you might be tempted to borrow from the contingency fund to keep things going. It’s best to do this only when you are threatened to close down. Otherwise, it’s best to keep that piggy bank safe and wait to see what’s around the corner.
For one thing, governmental support for female-led businesses can have a positive effect on the wider economic revival. Entrepreneurs often drive comeback efforts and help communities rebuild themselves after a disaster. As so many of them are now women, it’s crucial that they’re able to pull themselves up again and resultantly support their communities.
Relief initiatives like the CARES (Coronavirus Aid, Relief, and Economic Security) Act have certainly proved helpful. Reach out to the state for programs like the Women-Owned Small Businesses (WOSB) Federal Contracting program. There are several small business grants reserved for women that you can explore and apply for.
Hope Is Still Alive
It may seem daunting to have to pull through times like this, and you may be close to a meltdown yourself. But, thousands of people are finding ways to prepare fallback plans for their business and to bring their passions back to life. It’s doable and we’re a huge part of it!
Reach out for a personal consultation today and let us help you get started with a contingency plan that suits you perfectly.
The number of female business leaders has grown steadily in the last few decades. The 2019 State of Women-Owned Businesses Report states that the share of businesses run by women increased from 4.6% in 1972 to 42% in 2019. So businesswomen need to work on improving their own financial health to save the economy as a whole!
Of course, newer projections based on what 2020 has unleashed upon us all would be different. But, there’s infinite potential in there for all to see and a massive opportunity in supporting the recovery of women-led businesses. Let’s make it happen!
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