Businesses Started by Women Boomed During the Pandemic, AARP Finds

Funding can be difficult for women to secure

Forty-six percent of start-up respondents agreed with the statement that gender-based challenges affect their business growth. The top financial barriers cited include lacking available credit, securing funding and purchasing inventory.

In general, women-owned ventures remain underfunded, with iFundWomen reporting that female founders receive just 2.8 percent of venture-capital investments. For women of color, who represent 89 percent of new ventures among women-owned businesses, less than 1 percent receive venture-capital funding.

Most female founders aren’t waiting on investors. The research shows 7 in 10 female entrepreneurs are self-funded. Such is the case with Latina founder Cindy Mason, who bootstrapped her way to a multimillion-dollar tech firm, Cynergy Professional Systems. She operated her business as a side gig for four years while working full-time before she could afford to take the leap into entrepreneurship, similar to 30 percent of survey respondents. Today, Cynergy Professional Systems has more than 30 employees and five small-business certifications, and was voted the Northrop Grumman 2019 supplier of the year.

Even though her business’ pathway to profitability was paved through minority certifications, Mason told AARP that a minority certification isn’t a magic wand that opens every door. She advises aspiring entrepreneurs to make the most of networking opportunities and training programs to build relationships with potential partners and clients. Even more importantly, she recommends freshman founders know where to find these networks.

The information gap can hurt women entrepreneurs

Mason’s advice reflects another barrier female entrepreneurs face: the information gap. Roughly 52 percent of survey respondents said they had not applied for funding due to a lack of awareness that opportunities exist in the first place. Additionally, 37 percent did not know where to look or the names of specific organizations that offer funding.

The data confirms that many small-business owners struggle deciding which key activity areas to prioritize. Female founders 40-plus cited acquiring customers, marketing, financing and navigating the appropriate licensures as the top areas of difficulty in finding information. A lack of trust also is also a contributing factor to the information gap.

Surprisingly, state and local small-business resources are not top of mind for the majority of start-ups. The first stop? Friends and family. Sixty-one percent of respondents trust friends and family for business advice, while 58 percent said they turn to the federal Small Business Administration. Industry networking groups fall in third place as a trusted resource at 38 percent.

Building new skills can help

Barb Taylor agrees with Mason on the importance of training. Originally a self-taught wood sculptor, her second act began with a shoulder injury. Taylor always loved to draw and work with her hands, but she was forced to take precautions while her shoulder healed. It was then that she turned to an animation class at 40 years of age. She quickly fell in love with 3D, gaming, digital and TV animation.

Today, Coyle Films is an award-winning animation studio creating equitable pathways for female and LGBT artists who are underrepresented in the field. For Taylor, education is ageless. She credits reskilling from wood sculpting to animation for her success. However, she emphasizes the importance of being coachable. Her experience is reflected in the data. Fifty-six percent of respondents said they use online training to close the skills gap in their businesses. The most popular areas of study include marketing, building a business plan and managing business operations.