Despite a more positive outlook on hiring, women-owned small businesses report they are still seeing sales volumes lower than before the recession.
The women owners also said they were more likely (45%) to cut costs than seek to add to sales (31%).
A new study by Chase Card Services, a division of JPMorgan Chase & Co. the National Federation of Independent Business (NFIB) and the Center for Women’s Business Research, looked at how women small-business owners fared during the recession.
Small Business: Lessons of the Recession, is an in-depth look at how women-owned businesses responded to and weathered the recent economic fallout. Regardless of which strategy they chose, women business owners indicate that their real volume sales remain lower than when the recession started, in 2007.
“During the recession, women-owned small businesses did the best they could with the few choices they had available to remain open…and they’re stronger today for it,” said Patricia Greene, chairwoman of the Center for Women’s Business Research. “The real silver lining is that their resiliency provides valuable lessons on how today’s business owners can adapt to challenges.”
Many of today’s women-owned businesses (WOB) are now led by recession-tested entrepreneurs whose experiences provide valuable insight into the challenges that may await aspiring small-business owners.
Help Wanted: Women Business Owners Are Looking to Hire Again
According to the survey, the resiliency of these women business owners should provide help for the economy. The study shows that while many women reduced headcount to cut costs during the recession, they are now starting to hire again. Compared to their worst quarters during the recession, nearly half of WOBs are now increasing headcount (45%) and only 9% report that they are decreasing staff.
This is a significant improvement, given that 36% of women small-business owners reduced their payrolls during the recession. Women-owned businesses that have more than 10 employees were more likely to reduce staff than those with fewer than 10 employees.
Forty percent of those surveyed reduced the number of hours worked by employees.
The study included these insights about how women-owned businesses (WOBs) are dealing with the recession:
- Focus on cost control. Forty-five percent of WOBs focused on controlling costs in response to economic challenges, while 31% concentrated on increasing sales. In retrospect, nearly 60% of women are confident in their business decision.
- Targeting the right customers. Although more than half of WOBs (54%) focused on new business among their existing customer base, about one in four (23%) say they are marketing to a customer base today that is different from their pre-recession targets.
- Social media as a business tool. Half of WOBs owners now use social media compared with 4% before the recession. Of those surveyed, 56% said social media are “very important” or “important” to their business.
- Finding outside help. The sales record of those who invested in outside help to control costs and/or increase sales (23%) proved somewhat better than those who didn’t.
- Promoting the business through community activities. Thirty-nine percent of WOBs increased their involvement in civic, social or school activities to raise their exposure during the recession and create value for their communities.
- Working harder. Women business owners say they are working harder than they were during the height of the recession (41%).
“The data [indicate] that many of women-owned businesses adjusted to the new, volatile circumstances, by making changes to their businesses,” said William Dennis, senior research fellow at the NFIB. “What is encouraging is that many of these adjustments appear to have been institutionalized.”
“Small businesses are the engine of our economy, and one of the key steps toward greater economic recovery is equipping our entrepreneurs with the resources and expertise they need to succeed,” said Mike Nagle, general manager of Chase Card Services. “As a leading partner of small businesses across the country, Chase is committed to helping these businesses move our country forward.”
About the Survey
The Small Business: Lessons of the Recession study was a telephone and online survey conducted between March 28 and April 11, 2012. The survey polled a total of 760 business owners--559 women and 201 men. Learn more about the study at www.nfib.com/wobstudy.
Watch a video of Patricia Greene and Mike Nagle discussing the results of the survey by clicking here.