Ann Marie Wallace and Derek Miller: Women-owned businesses are critical for Utah’s economic recovery

At a recent listening session for women, hosted by Utah’s Women in the Economy Commission, several participants shared examples of being denied government funding because their home-based business was viewed inaccurately as a “hobby business.” Such a determination discounts the vital role women play in the economy as leaders, producers, and small business entrepreneurs.

Erroneous labeling that leads to dismissing requests for capital presents another challenge we must overcome to advance equity and inclusion in opportunity for women. The IRS defines a business as one that people engage in an attempt to make a profit. There are also factors that demonstrate what a hobby is and what a business venture seeks to do, such as maintaining books, seeking profitability and changing methods to improve a product.

Many successful businesses get their start when entrepreneurs turn interests into enterprises. As a society, we should encourage people to follow their passion while earning a living. Women entrepreneurs are taking a risk, filling a market need and accounting for profit/loss and we should support them as they grow the economy from home. Especially during a pandemic, we should not make the mistake of undervaluing home-based businesses that could become the next unicorn that started in a basement or garage.

Helping women entrepreneurs and business owners achieve their dreams is the mission of the The Women’s Business Center of Utah, housed in the Salt Lake Chamber. We see first-hand how women start and grow businesses, create jobs, provide financially for families and contribute to the local and statewide economy. We know the effort that goes into starting a venture and the grit to keep it going. These are some of the brightest and hardworking startup minds in the state.

Some statistics that do not always make the headlines are that women make up over one-third of small business owners in Utah and the U.S., they are the majority of newly self-employed, and female-founded businesses tend to be more stable investments.

This story also reveals that women face greater scrutiny when it comes to accessing capital and thus seek investment less than male counterparts. When you consider that women in the workplace have been more negatively impacted by the pandemic, the need to overcome cognitive bias and provide support to women business leaders is elevated.

The changing nature of work with the pandemic shifting much to the home should enlighten everyone to the critical role that home-based businesses and remote operations play in our economy going forward. This structural change will have some permanence to it but we must also adapt our operations and understanding to include more fully our women home-based business owners.

Let us work collectively to remove roadblocks to success and support women to with the opportunity to provide for themselves and their families, and be an agent of change in their community:

  • Denial of capital from investors,

  • Not taken seriously because their business is home-based,

  • Given less-favorable terms with vendors or venues, and

  • Misunderstanding reason for starting the business, i.e. thinking it is a hobby

When we support women who run businesses from their homes we encourage growth, seed communities with opportunity, expand the middle class and point our compass to the true north — standing with any person attempting to engage in the economy no matter the place, person, or title. Supporting our female entrepreneurs will create a win-win for our state and economy.

Ann Marie Wallace

Ann Marie Wallace is state director of the Women’s Business Center of Utah.

Derek Miller

Derek Miller is president and CEO of the Salt Lake Chamber.