Starting a business during covid-19

By accepting unique challenges, female entrepreneurs pursue success

Many women are eager to make their dreams of starting a business a reality, and the results of a new AARP study aren’t stopping them from the Covid-19 pandemic. Still, some say they face barriers based on their gender and are unaware of resources that could help them.

In the year AARP’s national survey, conducted in the summer of 2022, included a national sample of women over 40 who had started a business as of January 2020. The enterprises run the gamut from restaurants to healthcare companies, with the most popular category including retail marketing or ecommerce. businesses.

Entrepreneurship drivers and barriers

The results show that “want” rather than “need” often drives women’s decisions to become entrepreneurs. About a quarter (26%) of women said they always wanted to start a business, and 19% did it to follow their passion; Another 15% are looking for additional income, and 15% are looking for flexible work options.

For many, the COVID-19 pandemic was a motivating factor for setting up their own business – 43% said it had a major impact and 24% said it had a minor impact. Respondents who said their role was minimal at the time of the outbreak were financially better off.

Age, and perhaps the accumulated wealth that comes with it, has become an advantage in business ownership. Women entrepreneurs over 60 were less likely to experience financial difficulties since starting their business, with a strong majority (62%) avoiding such challenges compared to 29% of women entrepreneurs in their 40s.

Two-thirds of the women surveyed (69%) invested their personal savings, while a smaller number of women took loans from national banks (2%) and regional or community banks (4%). Getting credit was difficult for 35% of respondents and another 35% had problems getting financing. In fact, the challenges women face in setting up their businesses are financing, cash flow and attracting customers.

Women recognize that the gender gap in the marketplace is real. Regarding the supply of capital, the research shows that 70% of women face special problems that are different from men.

Awareness and availability of resources

Only 42% of respondents said they were aware of organizations offering funding to women-owned businesses – and of those, only 13% had applied for a grant. Most of the respondents passed up the opportunity due to lack of knowledge or familiarity with specialized organizations that provide such assistance.

Similarly, female entrepreneurs were eager to improve their businesses, but many said they had difficulty finding information on how to reach customers (42%), marketing (39%) and finance (37%).

Despite these challenges, most women were optimistic about their entrepreneurial path. AARP found that most women (98%) agreed they made the right decision to start their business, and 39% said their business was doing better or somewhat better than expected.

AARP research reflects that women entrepreneurs need more support and training to grow their businesses. Respondents said they are looking for resources in marketing (24%), recruiting and hiring (11%) and finance (10%), and these are areas where women are more likely to receive training.

method

The AARP survey included 608 women over 40 who started businesses with up to 100 employees between January 2020 and June 2022 and were employed in all 50 states and the District of Columbia. Respondents were contacted by telephone and online from June 6 to July 19, 2022.

For more information about this survey, please contact Lona Choi-Alum at lallum@aarp.org. For media inquiries, contact External Relations at media@aarp.org.

Suggested quote:

Choi-alum, lona. Women Entrepreneurs: Starting a Business During the Covid-19 Pandemic. Washington, DC: AARP Research, October 2022. https://doi.org/10.26419/res.00520.001