Women entrepreneurs are confident and prepared
In honor of International Women’s Day on March 8, we’re taking the pulse of women who own small businesses to uncover how they found success and learn about the challenges they still face. To better understand the mindset of female entrepreneurs, we asked 500 women how confident they are about the future of their business, the risks they face, and how they plan to protect themselves.
Women business owners are optimistic today
Women who own small businesses are feeling optimistic about the current state of their businesses, the economy, and government support. Here’s what they had to say:
- Nine in ten (90%) of female small business owners say their business is profitable.
- Nearly half (49%) of women small business owners feel that the state of the country’s economy is better than it was a year ago, and another third (36%) think it is the same as a year ago.
Their future looks bright – for good reason
Among the 99% of women small business owners who expect to still be in business a year from now, 92% are optimistic about the year ahead. They cited many reasons for their optimism; chief among them are new customers (55%), steady or improved demand (43%), new products (32%), and the ability to increase prices and/or margin (28%).
Among the small number of respondents who said they are not optimistic about the year ahead, the most common reasons were increasing costs (39%), weaker demand (39%), and loss of customers (20%).
Nearly all (94%) of female small business owners expect their profits to stay consistent or increase over the next 12 months.
Investing in and growing the business
Female small business owners recognize that it takes money to make money, and nearly three-quarters (74%) have sought funding for their businesses in the past 12 months. The most common ways they funded their business were with credit cards (36%), personal savings (31%), and bank loans (23%).
Two-thirds of respondents (67%) said they intend to seek funding in the next 12 months, primarily from the same sources: credit cards (29%), personal savings (23%), and bank loans (23%).
There are big plans for this money, and for areas of focus on the business in general. In the next 12 months, nearly half (48%) of women entrepreneurs plan to focus on growing or retaining their customer base, almost as many (46%) will work on increasing productivity, and 35% plan to improve customer service.
Women are taking steps to protect themselves against risk
Even though the overwhelming majority of female small business owners are optimistic, they still recognize that they face risks, and they are taking steps to mitigate them.
The most common risks cited were maintaining profitability (34%), not attracting new clients (30%), passing cost increases on to customers (19%), late or partial payments from customers (16%) and paying down debt (16%).
Sixty-five percent of respondents said they are prepared in the event of an economic downturn, with more than one in five (22%) saying they’re ‘very prepared.’ The steps that they’ve taken to prepare include reducing expenses (41%), having an emergency savings fund (37%), and increasing their marketing efforts (31%). Seventeen percent of women small business owners have started a new business or side hustle in addition to their primary business.
Two-thirds of women (67%) have thought about what will happen to their business when they no longer can or want to run it. The most popular plan is to sell or leave the business to family members (31%) or to sell it to an outside buyer or company (16%).
To protect their business from risks they can’t see coming, nearly two-thirds (65%) of women small business owners have insurance for their companies, and another 21% plan to buy business insurance in the next 12 months.
The survey was conducted by Wakefield Research among 500 female small business owners in the US, between November 20 and December 4, 2019, using an email invitation and an online survey. Results of any sample are subject to sampling variation. The magnitude of the variation is measurable and is affected by the number of interviews and the level of the percentages expressing the results. For the interviews conducted in this particular study, the chances are 95 in 100 that a survey result does not vary, plus or minus, by more than 4.4 percentage points from the results that would be obtained if interviews had been conducted with all persons in the universe represented by the sample.
2020 Hiscox Small Business Owner Risk Study
In addition to this survey of female small business owners, we also surveyed a national sample of 1,000 small business owners and asked them about the future of their business over the next 12 months. To learn more, download the 2020 Small Business Owner Risk Study.