Small is big for women across the globe who are now thriving on their own terms. When we say this, we refer to millions of women who own and run micro-businesses. In fact, it is women, not men, who often dominate the micro-business world.
In business terms, micro-businesses are enterprises with only up to nine employees, and often just run by one person. Nevertheless, they are certainly making a big global impact, contributing to world economies.
An International Labour Organization (ILO) report states that in high-income countries 58 percent of total employment is in small businesses. In emerging and developing economies, over two-thirds of total employment is from small businesses. According to Forbes, in the European Union, micro-businesses make up about half of the small businesses. It is a trend that could keep growing – thanks to the changing workplace landscape and new technologies.
It is also worth noting that considering the exodus of women from the workforce during the pandemic and thereafter, roughly 25% of micro-businesses are run by people who would otherwise be out of the workforce, for instance, homemakers, retired or disabled people, or those who’ve been laid off. In the United States, women are responsible for more than 50% of online micro-businesses started since the onset of the pandemic.
Black men and women have launched more of these microbusinesses during the Covid-19 pandemic compared to the times before the pandemic GoDaddy’s Venture Forward initiative, which polled 4,000 online micro-business owners in July found that 9 out of 10 of these entrepreneurs have fewer than 10 employees.
According to rough estimates, about 17% of all micro-businesses were launched between March and July 2020. Women-owned micro-businesses comprise 57% of new startups – a 48% increase from before March 2020. Interestingly, 26% of these very small businesses are owned by Black people. As per data released by Venture Forward this year, many of these micro-businesses were started in areas with large Black populations.
More than 60% of people polled started their businesses with less than $5,000, and most of them funded their ventures with personal savings. Twenty-five percent of these businesses earn at least $4,000 in gross income every month.
During the Covid-19 pandemic, most new business growth was driven by Black and other women of color. They were more likely to start a small business owing to financial need. Following the widespread racial justice protests and conversations in 2020, consumers too endeavored to support businesses owned by people of color. Even large companies have committed to investing in Black-owned businesses.
There are several reasons why women are more successful in starting micro-businesses. Various studies have pointed to the fact that compared to men; women are better at understanding entrepreneurial opportunities. A study by the British Chamber of Commerce concluded that women are better at seeing gaps in the market than men, creating pioneering products, and using technology in their businesses.
Moreover, with increasing awareness regarding the importance of balanced mental and physical health, more and more women are realizing the damaging impacts of some workplace environments, such as late hours, long commutes, and spending long hours in the office. These days, women are keen to find new ways to work as well as lead healthy and happy life. Owning microbusinesses helps them to achieve this, besides giving them financial independence. It also gives them the much-needed flexibility and also helps to decide when, where, and how often they work.
The conventional 9 to 5 jobs can prove to be hard for women to find time for friends and family. With the flexibility of microbusinesses, female entrepreneurs can now make their loved ones a priority – a great boost for wellbeing and overall happiness. This is a major reason why many women are starting their own businesses, especially mothers who want to stay at home to raise a family. Thanks to the internet, and the rising success of microbusinesses, all this is now possible, and it is creating a more gender-equal world where women don’t have to choose between personal and professional aspirations.
Owning a microbusiness also offers a creative approach to work. Women who are innovators and think of the big-picture might often find it difficult to concede to higher management. With a micro-business, they have the freedom to follow their own ideas – and enjoy the successes and rewards first-hand when their ideas work. In fact, women are most likely to have a creative and innovative approach to business.
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