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August 28, 2020

Female-owned businesses struggling to recover post-lockdown

By Zoya Malik

Nearly a quarter of UK female business owners have revealed they are still not trading post-lockdown compared with only 14% of male business owners, according to a recent survey by small business lender, IWOCA. Isabella Colletta reports

The survey of over 400 small business owners also revealed that female owned businesses were finding it more difficult to recover profits, with only 14% of women reporting business was back to pre-COVID levels compared with 21% of men.

The reduced business activity of female-owned companies will impact the economy, as the Department for Business, Energy and Industrial Strategy revealed in July that female-owned SME’s contribute £85 bn ($111.7 bn) of UK output.

Samantha Guilfoye, founder of S G Accountancy, commented on the difficulties her own firm is facing following the effects of the pandemic. She said: “I’ve wound myself up worrying about how other people are keeping and I've done an awful lot of free work for people I've worked with before. Unfortunately, there’s been minimal invoice work, so whilst I’ve just been trying to do the best for the community, my income has taken a hit. I've also missed my own salary payments, but I don't pay myself much anyway.”

The survey also revealed that female-owned firms are more likely to make sacrifices with regards to their personal income. Half of all female respondents to the survey stated that they had not taken a salary since the beginning of lockdown, compared with 47% of men. A further 42% of business owners do not intend to take a salary within the next 12 months, whereas only 38% of men don’t.

Small businesses have overall had to make sacrifices, the IWOCA survey reported, with 53% of all respondents stating that the biggest sacrifice they have made during the crisis was not going on holiday with family. This was followed by business owners having to fund their business with their own savings (51%).

Seema Desai, Chief Operating Officer of IWOCA, said: “The pandemic has fundamentally changed the way business owners operate and many will be making sacrifices they have never had to consider before.

“It is clear that the last few months have been extremely challenging for all businesses. Women-owned businesses make a huge contribution to the economy, so it is incumbent on everyone working within the small business community to ensure we’re doing enough to support them.” 

Spokesperson from IWOCA, Mark Di-Toro, also commented on why the survey’s findings positions female-owned businesses in a more vulnerable position compared with male-owned companies. He said:  "Our survey found that a large proportion of the women business owners who responded work in the leisure, retail, arts and beauty industries – industries which have been hit-hard by the Covid-19 crisis.

“The hospitality and beauty industries in particular were the last to be permitted to open by the government, which could be attributed to why we have seen differences for men and women in our survey.

“Small business owners are used to making sacrifices for their businesses, which includes not taking leave. Given the toll that the lockdown will have had on many businesses, this is likely to have forced many owners to go even further to ensure their businesses can recoup any losses.”

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