Gusto and the National Association of Women Business Owners (NAWBO) have partnered to produce a series of quarterly surveys, gathering data on the health and the needs of women-owned businesses. In the first quarter of 2021, this survey centered on the economic impact of the childcare crisis, the surge in business creation among female entrepreneurs, and the vital role breadwinning women business owners play in the economy. In this second survey, we collected responses from 1,341 NAWBO members between May 3 and 14, 2021, asking questions across three main themes: the re-opening and the “new normal” of the American economy,  the economic challenges that remain and tools business owners need to grow, and public policies to support women-owned businesses. Responses have been weighted to match the overall industry distribution of women-owned businesses using the 2018 Census Annual Business Survey.

Key Findings

  • Adaptations to the pandemic economy are here to stay. One quarter of businesses plan to continue spending money on PPE for more than twelve months — a continued expense for cash-strapped small businesses that policymakers should look to ease. Nearly all owners also indicated that technology adaptations and workplace flexibility will also remain.
  • Hiring is difficult right now, and most businesses still need financial support. Business owners are ready to expand, with 41% of employers having posted a job opening in April or May. But many are struggling: 64% of those businesses with open positions have had a more-difficult-than-normal time filling positions. Owners having trouble attribute this difficulty to three reasons: current temporary unemployment insurance supplements (62%), a mismatch in skills between open positions and applicants (29%), and ongoing child care concerns (23%). Yet hiring workers is not the biggest need among women business owners: 43% of all owners responded that the greatest help to their business would be additional government grants or tax breaks. 
  • The accelerated shift to technology has highlighted the need for broadband. When asked to identify technology tools that would help their business grow and expand,  the top tool, with 50% of business owners selecting it: “more reliable and affordable internet.”
  • The SBA vastly expanded its role in the small business economy this past year. 15% of women-owned businesses reported ever receiving a standard SBA loan, but 65% have received a PPP loan through the SBA in the past year. This year is a crucial time for policymakers to seize the opportunity to rethink small business support – and create a more equitable system. 48% of minority business owners reported interest in standard SBA loans but being blocked at some point in the process, double the rate for white business owners.
  • Women business owners are largely supportive of current legislative proposals. 70% of women business owners support president Biden’s infrastructure proposal (including investments in broadband), and 86% support efforts to expand access to small businesses financing.

The Re-Opening and New Normal

As the U.S. economy re-opens, business owners are facing uncertainty over whether and how to shift practices adapted during the pandemic – both health-related measures such as the use of personal protective equipment and technological shifts including remote work and e-commerce. In the first section of this survey, we explored the extent to which these practices will become part of the “new normal” in the economy that emerges post-pandemic. 

First, we asked owners from which source(s) they primarily receive their guidance when making decisions about re-opening, the use of personal protective equipment, and other health and safety practices. As laid out in Table 1, 60% of owners indicated they primarily look to the Centers for Disease Control (CDC) for guidance. Many owners also look to their state and local officials (42% and 24%) for information, as these policymakers are often responsible for business capacity restrictions and mask ordinances. Finally, news publications (40%) and industry groups (12%) are a primary source of information for many business owners when it comes to health and safety practices. 

This data is particularly instructive in thinking about when business owners are likely to alter their current behaviors and requirements. Given that 60% of owners look to the CDC for guidance, we should expect business owners to change practices as the CDC updates its guidance around pandemic-related activities and as state and local authorities alter restrictions.

The above data also informs how business owners have formed expectations over the short- and long-term use of personal protective equipment. When asked how much longer they expect to spend money on PPE, 35% of all owners indicated less than three months, but a significant portion, 25% of owners, expect to continue spending funds on PPE for more than a year.

First, the continued usage of PPE is the first sign of a “new normal” in this economy, in which many businesses, and especially personal services businesses, see PPE as a long-term fixture of their operations. Second, PPE has become, for many small businesses, an added source of long-term overhead at a time when small businesses are cash-strapped and still climbing out of the hole this pandemic has put them in. Given this new expense, national and local policymakers should be mindful of ways to ease this cost burden in the form of continued publicly-provided PPE or tax breaks for small businesses spending money on PPE.

Beyond the health practices that will remain, we also asked business owners about the adoption and expected continued use of technological tools during and after the pandemic. Table 2 presents results from a question asking owners which technologies they have adopted since the pandemic began. When thinking about the use of these tools among small businesses, these numbers can thus be thought of as a lower bound, because they do not include owners who already had adopted these tools.
The most commonly adopted tool was cloud-based technology that allows employees to work remotely, such as Zoom and other software, added by 62% of all business owners since the pandemic began. Second, many businesses adopted new technology to sell and deliver goods without needing a physical location. Among all businesses, 28% of owners indicated they adopted an online sales/e-commerce tool and 9% adopted a delivery service. Among small businesses in the personal services sectors, over half of businesses (54%) adopted e-commerce technology and 19% adopted a delivery service since the pandemic began.

These technology tools have become a lifeline for many small businesses during the pandemic, allowing workers to collaborate while away from the workplace and opening new lines of sales while physical locations were closed or capacity-restricted. As the pandemic wanes, these adaptations are likely to become a permanent part of our economy. When asked if the technological tools they adopted will remain after the pandemic 94% of business owners indicated they would remain. To be sure, the prevalence of technological tools was increasing well before the pandemic, but the shift to remote work and the limiting of in-person economic activity greatly accelerated these trends – and will be one effect felt for years to come.

Remaining Challenges and Tools For Growth

As the re-opening of the economy continues – as vaccinations become more widely available and indoor capacity restrictions are lifted – there is reason for optimism about the pace of the recovery. But there are also significant challenges facing business owners as they climb out of the hole this pandemic has put them in. In the second section of the survey, we asked business owners about some of the challenges they are facing – and the tools they need to overcome these obstacles. 

First, although many women business owners are eager to expand their business right now, many are facing hurdles to hiring employees for these positions. 41% of respondents indicated that they posted a job opening in the last month since the survey was taken (April 2021), and 64% – nearly two-thirds – of owners who posted a job opening reported having a harder time filling open positions than before the pandemic. 

These survey results mirror a host of additional economic indicators showing that there are many more open positions than workers willing or able to re-enter the workforce at this point. The Bureau of Labor Statistics estimates that there were 9.3 million job openings in April 2021 – the highest number of openings on record, surpassing the previous record of 8.8 million just set in March 2021. 

We then asked business owners who had trouble hiring what causes they attributed this difficulty to. The most common response, selected among 62% of owners who had trouble hiring, was that potential employees were currently making more on unemployment insurance. 43% of owners indicated that no employees are applying for these open positions. Large portions of owners also attributed this difficulty to skills mismatch among applicants (29%) and childcare concerns (23%).

First, it is important to note that many of these reasons are related. For instance, a business may not have received any applications either because potential employees are receiving unemployment benefits or because workers with children remain out of the labor force because childcare options remain limited. This data does suggest that much of the imbalance between open positions and workers returning to the workforce is likely to be resolved in the next few months as (1) summer camps re-open in the summer months and schools likely return to in-person instruction in August and September; and (2) the federally-funded UI weekly supplement expires in September (and earlier than that in at least 25 states). 

This survey also suggests, however, that many owners are seeing a mismatch between the skills that applicants have and the requirements of these open positions. 29% of owners indicated that the workforce skills do not match business needs and 19% attributed the difficulty hiring to an “unskilled workforce.” These barriers to growth will require longer-term fixes, mainly in the form of large investments by policymakers in workforce development. As noted above, this pandemic accelerated the shift to technology tools among small businesses, and with that comes increased demand among owners for workers with the skills to navigate these tools. Public investments in helping workers to gain the skills required by businesses today, in the form of increased funding in education and skills training, will not only increase the earnings of these workers, but strengthen the small business economy.

As indicated above, the pandemic-induced closures of schools and childcare centers over the past year exposed the extent to which the American economy relies on these childcare services to operate. Nearly one quarter of women business owners attribute their difficulty hiring now to the fact that childcare needs have not yet been fully restored for working parents. Given these trends, we asked owners which “family friendly” policies they adopted during the past year to help workers navigate the childcare crisis – and which policies they foresee keeping permanently. 

We considered as family-friendly policies a flexible work schedule, remote work, paid sick leave, and paid family leave (leave for needs other than a personal or family illness). 74% of women business owners indicated they adopted some form of family-friendly policies over the course of the pandemic. 60% adopted a flexible work schedule and/or remote work, and smaller though still significant portions adopted paid sick leave (22%) and paid family leave (14%).

We then asked the owners who adopted each policy whether they planned to continue it after the pandemic, and they overwhelmingly indicated these adoptions were here to stay. 94% of owners who adopted remote work planned to continue offering this option in some form after the pandemic ends, and 93% of owners who adopted paid sick leave plan to continue offering this benefit. In the beginning of this pandemic, Congress adopted the Families First Coronavirus Response Act, which provided paid tax credits for small business owners to fund paid leave for employees who needed to take time off for coronavirus-related reasons. Policymakers can help small businesses afford these family-friendly policies by extending these FFCRA tax credits and expanding them to apply toward sick leave and family leave unrelated to COVID-19.

Finally, in this section we ask two questions directly polling women business owners about the tools they need to grow and expand. First, given the strong evidence that this pandemic has accelerated small businesses’ adoption of technology, we focused on the tech tools that women business owners most need. Notably, half of owners said that better broadband/internet service will allow them to grow their business in the future. These responses are particularly important because they come at a time when Congress is debating legislation that would increase the federal government’s investment in infrastructure; including broadband investments in this legislation is crucial for the continued growth of women-owned businesses, who now depend critically on internet tools to operate their business.

Policies to Support Women-Owned Businesses

In this last section of the survey, we focused on policy measures that would help women-owned businesses grow and expand – both by asking directly which policies would help and by polling women business owners about policies that are currently under consideration by legislators or President Biden’s Administration. 
Women business owners overwhelmingly indicated that the greatest support they could receive right now would be financial support in the form of additional government grants and tax breaks. When asked which single form of support would be of greatest help to their business, 43% indicated additional grants and tax breaks. Beyond help with hiring, or even access to technology tools, women owned businesses are still recovering from the hole that this pandemic has put them in, and government support is still crucially needed even as optimism for the post-pandemic future grows.

Next, we asked women entrepreneurs about their sources of financing over the course of business ownership. When asked which sources of financing these owners have used to date to fund their business, 68% indicated that they had put personal savings into their business, by far the greatest single source of business financing. Beyond savings, 23% indicated they had taken out a private business loan, and just 15% had taken out a standard SBA-backed loan. Just 3% of women business owners have financed their firm with private capital investment.

Although just 15% of business owners have received a standard SBA-backed loan, 65% reported receiving a SBA-backed Paycheck Protection Program loan and 38% reported receiving an Emergency Injury Disaster Loan. The pandemic response has dramatically expanded the reach of the SBA, and we are now at a crucial time for policymakers to rethink small business support – both how support is delivered and who receives it. 

Specifically, there is a great potential for the SBA to increase the equity of the small business financing system. We asked owners who did not receive an SBA loan whether they were not interested or if they were interested but did not receive a loan because they were rejected, got stuck gathering paperwork, or did not know where to turn for an application. While the percent of white and minority business owners who reported receiving a standard SBA loan was similar, 23% of white business owners did not apply because they faced difficulty navigating the process, while 48% of minority business owners did not apply for an SBA loan for that reason. That is – more than twice as many minority owners report being interested in an SBA loan, but not receiving one due to the complicated application process. There is great potential for the SBA to increase the racial equity of the small business financing system if it can only simplify the application process and ensure women business owners in need of such financing are aware of where to turn.

Finally we polled women business owners about their awareness and favorability of three public policies: President Biden’s infrastructure bill, the Providing Real Opportunities for Growth to Rising Entrepreneurs for Sustained Success (PROGRESS) Act, and the Work Opportunity Tax Credit (WOTC). Overall, 70% of women business owners viewed President Biden’s infrastructure proposal favorably. This proposal was likely viewed favorably in part because it included a commitment to reaching 100% broadband coverage across the country, an aspect of infrastructure that should certainly be maintained as the legislation is formed.

Second, the PROGRESS Act is a bill introduced into the Senate that provides tax credits to small businesses owned by women and people of color, including a tax credit for new employees and angel investors. 86% of women business owners viewed this legislation favorably, and 80% indicated that they would take advantage of the provisions of this bill if it were enacted into law.
Third, the Work Opportunity Tax Credit (WOTC), is an existing federal tax credit available to employers for hiring individuals from certain targeted groups who have consistently faced significant barriers to employment. When asked, 42% of business owners were familiar with this tax credit, but only 4% have claimed it. However, 64% of those owners unfamiliar with WOTC indicated they were interested in taking advantage of this tax credit now that they are aware.


This pandemic has dramatically altered the landscape of this economy, changing the way owners operate and their relationship to the federal government. Here we have highlighted three key themes that emerged among women business owners. First, many adaptations businesses have undertaken are here for good, as part of the “new normal” of this post-pandemic economy. For instance, PPE will remain an expense for one quarter of businesses and nearly one-third of businesses in the personal services sector. Also, nearly all owners who adapted technology tools and family friendly policies indicate these changes will remain even as the pandemic wanes.

Second, even as the economy enters a recovery period, hiring is difficult right now, and most businesses still need financial support. 64% of women-owned businesses hiring have had a more difficult than normal time filling positions. Owners attribute this difficulty largely to generous unemployment insurance supplements, the continued closure of childcare centers, and a skills mismatch between workers and business needs. While unemployment insurance supplements will soon expire, the remaining two obstacles deserve significant policy action. This pandemic has highlighted the importance of childcare in our economy, and tax credits to help small business owners provide childcare benefits to their workers will make sure parents – and particularly working mothers — are included in future economic growth. The past year has also accelerated this economy’s reliance on technology tools, and the federal government should invest in workers’ futures by ensuring their skills match those demanded in this new economy.

Finally, while women business owners are broadly supportive of current legislative proposals, there is enormous room to ensure these policies have the greatest impact they can. The shift to technology has highlighted small businesses’ need for broadband, and 50% of business owners indicate this is the tool that would help them expand. Investments in American infrastructure should include an expansion in the quality and affordability of broadband throughout the country. Furthermore, as women business owners seek to grow their businesses, efforts to expand access to forms of financing received high favorability ratings.

Right now there is a huge opportunity for policymakers to rethink small business support, by providing technology tools that are necessary and access to the forms of financing owners need to expand their businesses. Women entrepreneurs are resourceful and resilient, they have emerged from this pandemic ready to drive the economy forward, but need support from policymakers to provide the tools they need to unleash their full potential.

Luke Pardue Luke Pardue was an Economist at Gusto, researching how public policies help small businesses and their workers thrive. He received his Ph.D. from the University of Maryland, where he studied the effects of government programs on disadvantaged populations’ housing and labor market outcomes.
Back to top