2024 State of Women’s Small Business Report by Block Advisors Reveals Strength Despite Facing Obstacles.

Over 6,000 subscribers of the Educate His Future the small business grant program shows great confidence but mentions the main obstacles for women looking to start a business

KANSAS CITY, Mo., Oct. 08, 2024 (GLOBE NEWSWIRE) — Today, Block Advisors and H&R Block announced 2024 State of Women’s Small Business Reportwhich reveals that women entrepreneurs continue to face major problems in obtaining funding and support, these problems are even worse for BIPOC women. These systemic barriers create a trust gap between the owners themselves. Despite these obstacles, many existing business owners feel that the future prospects for their businesses are bright.

While nearly all respondents (94%) feel ‘somewhat’ to ‘very’ positive about 2025, respondents also show financial prudence given today’s economic climate. More than half of the respondents (56%) say that inflation has affected their prices this year; and in the next six months to a year, some respondents believe they will likely be forced to cut costs (44%) and raise prices again due to rising costs (39%). Despite the cautious outlook, the report highlights significant challenges in women’s business travel. The problems found are even more pronounced for respondents of different ethnicities.

“Starting a business has its share of stress – sustaining it brings more challenges,” said Jamil Khan, Chief Small Business Officer at H&R Block. “This report sheds light on the barriers that exist, helping us to better understand the resources, guidance, and tools that women entrepreneurs of all kinds need access to.” It is often known that 50% of businesses close within five years of opening – this statement helps us understand how we can use women startups to overcome the odds. “

The 2024 State of Women’s Small Business Report by Block Advisors provides information from 6,333 Fund Her Future grant applicants. This study highlights the nature, attitudes, and behaviors of these applicants, particularly in relation to the motivations, challenges, and needs of today’s women entrepreneurs. Block Advisors’ analysis of survey responses shows confidence in the future of female founders fueled by a spirit of perseverance. Most of the respondents said they faced huge financial and support gaps when starting their business. These obstacles can contribute to the lack of trust that was observed in more than half of the respondents.

Block Advisors believes these findings reinforce the need for programs like the Fund Her Future grant. “It is clear that women entrepreneurs are determined to find success in their business journey. For these underprivileged business owners, the right support and guidance in the tough early years can make all the difference in navigating the tough road ahead,” said Khan.

Female Applicants Skew Younger, Different, and Seek Independence

The grant application pool reflects young, educated, and diverse female entrepreneurs who are just beginning their small business journey. Specifically, nearly half of respondents to the Fund Her Future grant survey were black women (50%), college educated or more (63%), millennials (53%), and had two or fewer years of business ownership (49%).

The responses showed that these women founders value being busy leaders. Improving the environment and the general need for independence were among the motivations for starting their businesses. Almost all (98%) of the respondents mentioned improving the environment as a motivation. This is supported by the industries represented by the applicants: almost one in four (23%) women have a business in consulting, education, training, or business consulting.

The choice of business independence and job flexibility also led to the creation of a business: 92% of those surveyed said they wanted to be their own boss and 89% said they wanted to set their own schedule. One in five women (21%) said they started a business to escape the traditional 9-to-5 work environment so they could engage in the childcare convenience of staying at home with their children. Not all aspiring entrepreneurs leave traditional workplaces immediately, however. Actually half of all respondents started their business as a side gig. A slow transition can allow for greater stability during the first-scary years of starting a business, while still lending the founder some sense of independence and a sense of self-direction.

Funding & Financial Support Remain Biggest Barriers to Entrepreneurship

The report found four of the top five barriers to starting a business both related to funding and support gaps, emphasizing the need to close these gaps through programs like Block Advisors and H&R Block’s Fund Her Future grant. In fact, ‘lack of start-up capital’ (80%), ‘needs stable, reliable funding’ (76%), and ‘needs a solid business plan’ (56%) round out the top three barriers, with ‘need help to get started’ (50% ) placing fifth.

Interestingly, 54% of respondents cited ‘fear of failure,’ making it the fourth most common obstacle. This highlights a little-to-no confidence gap for more than half of women entrepreneurs. One respondent said, “Starting a new business can be challenging, especially as a first-time entrepreneur. The fear of failure, along with the challenges of getting financing, can be overwhelming.”

Digging deeper into the support hole, the lack of general instruction was a common theme. This points to a major barrier that prevents women from taking the initiative to start their own business. In addition, a quarter (27%) of female business owners said they hesitated to start a business due to a lack of training at the time.

Financial gaps and the problems of finding money are increasing: one in three respondents applied for a bank loan, but 42% of those who applied were never approved. When viewed through a racial lens, the image becomes one of BIPOC and black women. Among those who applied for a bank loan, 45% of BIPOC applicants were never approved, compared to 36% of their white peers. Black women who applied for bank loans reported being denied bank loans more often. 47% of Black women who first applied for loans were turned down and unable to get this type of financing.

What Women Entrepreneurs Need: Funding, Marketing Support, and General Assistance with Tax Prep

When asked what are the top things they need to achieve business success, women entrepreneurs confirmed that their business would be successful if they had initial capital (66%) and marketing and advertising support (45%).

Furthermore, while starting a business can seem fun and exciting, respondents say that owning a business comes with unexpected challenges. While they may have started their own business to pursue their passion, there is a lot of management involved in the less exciting side of their business. Overall, tax preparation (53%) and bookkeeping (40%) rank as the most popular jobs for applicants, followed by website development and social media management (25%), and marketing & advertising (22%).

On a similar note, among the list of eight business activities, applicants are not confident in their ability to get all available tax credits and deductions: more than two-thirds of women say they only have ‘some confidence’ to ‘not very confident.’ Because of this – and coupled with the fact that tax preparation and bookkeeping rank as two less popular tasks – today’s woman small business owner may be at risk of leaving tax deductions on the table.

“For the next generation of business women, building a supportive network of trusted professionals and advisors will be key to overcoming these challenges and achieving long-term success. Block Advisors is proud to help its small business clients outsource business tasks – such as tax preparation, bookkeeping, payroll, business formation, and helpful owner reporting – to follow their will,” said Khan.

Download the 2024 State of Women’s Small Business Report by Block Advisors.

To learn more about Block Advisors and the Fund Her Future grant, visit www.BlockAdvisors.com and www.BlockAdvisors.com/FundHerFutureGrant.

About H&R Block
H&R Block, Inc. (NYSE: HRB) provides support and inspires confidence in its clients and communities everywhere through global tax preparation services, financial products, and small-business solutions. The company combines digital technology with people skills and care as it helps people get the best results at tax time and also be better with money using its mobile banking app, Spruce. Through Block Advisors and Wave, the company helps small business owners succeed with year-round bookkeeping, payroll, consulting, and payment processing solutions. For more information, visit H&R Block News.