IMA is celebrating International Women's Day on March 8th to commemorate the cultural, political, and socioeconomic achievements of women.  In this special Count Me In podcast Yvonne Barber, CFO, HR Knowledge Source, discusses how the pandemic affected female small business owners and how some used management accounting strategies to help them become more  resilient.

Connect with Yvonne: https://www.linkedin.com/in/yvonnebarber/

Episode Transcript:

Margaret:       Hello, and welcome to Count Me In. I'm your host, Margaret Michaels. Every March, IMA celebrates International Women's Day. A day recognizing the unique contributions and accomplishments of women. 

 

Embracing equity is the theme of this year's celebration. Questions of equity are prevalent when speaking about women and the workplace. Nowhere is equity defined as the promotion of justice, impartiality, and fairness. Within the procedures, processes, and distribution of resources, according to IMA's Diversifying U.S. Accounting Talent Report.

 

More important than in the realm of small business. Where female, small business owners account for 21.4% or 1.24 million of all small businesses in the U.S., according to the Census Bureau. 

 

Today, I am here with Yvonne Barber, CFO of HR Knowledge Source and IMA's Small Business Committee Chair. To discuss how the pandemic affected female small business owners. And how some used management accounting strategies to help them become more resilient. 

 

We will consider the challenges these owners face in a competitive, post-pandemic business environment. And the ways strong management accounting principles, can help them operate their businesses more efficiently and profitably. Thank you for being here today, Yvonne.

 

Yvonne:          Thank you for having me.

 

Margaret:       So I guess we'll start with looking back at the pandemic. Which really did bring a lot of attention to small business owners and their challenges. At the height of the pandemic, you worked for Blue Abacus Solutions. An accounting services firm specializing in small businesses. Small businesses took a huge hit during the pandemic. With quarantines, social distancing rules, and employee turnover affecting their ability to operate and stay profitable. 

 

According to the World Economic Forum's Global Entrepreneurship Monitor, female small business owners were hit harder than men. With women 20% more likely than men to report business closures, due to the pandemic. Can you offer some perspective on why female-owned businesses were especially at risk?

 

Yvonne:          Sure, in addition to the resource that you mentioned. I've researched this topic to develop a better understanding of the challenges faced by small businesses. So that the IMA's Small Business Committee, where I serve, can offer the support needed to the small business community. 

 

And I found that the biggest factor to be the lack of access to funding and capital. A majority of female entrepreneurs self-fund their business. And this can limit the ability to scale their business or invest in the needed resources, to improve operations. 

 

One of the things that small businesses, in general, struggle with is looking forward at what's coming, as opposed to reacting to what's currently on their plate. And I think that is where a lot of small businesses found themselves. 

 

They just weren't in a position to handle what the pandemic served out to them, and that is one of the biggest factors. But among that, bias among customers was also listed as another factor. 

 

Now, this may not be a great obstacle for some women. Especially, here in the United States, I think we've made a lot of progress in that area. But I found several studies, throughout the world, that found customers are less likely to purchase goods or services from women-owned businesses. 

 

So there's a variety of reasons that women were impacted as they were. And I think it's difficult to offer a one-size-fits-all approach to this. I think, instead, it's good to look at each individual item. And address as it pertains to your business, as a female-owned business or a small business owner in general.

 

Margaret:       Yes, those are great points and I think the funding issue is very top of mind. And that's really interesting, the bias, I never thought about that. But women experience bias in a lot of realms. So it shouldn't be surprising that it's also prevalent in small business ownership and customer choices. Those are great points.

 

Yvonne:          Yes, that surprised me as well. Just because my perspective here, being in the United States, I think that we've learned to navigate that a little better. But in that The Small Business Committee, we serve a global membership. I am interested in what the challenges are for our membership. All over the world, not just here in the United States. So that was surprising to me. But it was helpful to see the information, so that I'm in a better position to offer what's needed for our members.

 

Margaret:       And the IMA's Small Business Committee does a great job, with helping members who are struggling with these issues. In fact, IMA's Small Business Committee published two important reports, to help guide small businesses through the COVID crisis, and to help them stay resilient post pandemic. 

 

I wonder what differentiated the businesses, who managed through the crisis versus the ones who failed? And from your perspective, why is it difficult, when you are a small business owner, to address both short-term crises and long-term strategy?

 

Yvonne:          I think the businesses who survived focused on sustainability and leveraged strong relationships, and a diverse network of sources to meet their needs. Those who prioritized relationships were just better positioned to survive the storm. The relationships include the customers, suppliers, as well as employees. And it can be tough to think about tomorrow when you're just trying to survive another week. 

 

I know a lot of small business owners. I know they're just trying to make payroll. But making short-term decisions that impact the long-term sustainability of a company, they may seem to help the short-term, but ultimately they do end up hurting the company.

 

Margaret:       I think that's something that even mid and large-sized businesses grapple with, is that balance between the short-term and the long-term. And not having those short-term decisions affect your ability to operate in the long-term. So that's absolutely on point. 

 

And now, as the immediate crisis of COVID passes, new risks are also emerging for small businesses. These include worker shortages, failure to embrace digitization, inflation, and supply chain disruptions. And without the resources that larger size companies enjoy. How can small businesses mitigate these risks?

 

Yvonne:          A good sustainability plan can help with this. Many small business owners think of sustainability as something that impacts large businesses. With little to no impact on what they do on a day-to-day basis. But sustainability is all about efficiently using resources, and developing a strong and a diverse network of resources. And that may seem like a very pragmatic way to describe this. But buzzwords may not always be relatable to small business owners, but they understand the bottom line and how planning can impact it. 

 

So by developing and implementing a sustainability strategy. A company can plan for a diverse network of suppliers that minimize the impact of supply chain disruptions. They can also lead, perhaps, with a competitive edge for those who may have the opportunity to bid for government contracts, or provide goods or services to larger companies. Who may be required to provide reporting on the sustainability practices of the suppliers they use. 

Technology can be used to streamline processes to avoid the need for additional employees. Which in a small business, that's particularly important because they don't, necessarily, have the budget for a large staff. And it's difficult to make a decision to increase headcount. And they can also avoid overloading existing employees who could otherwise burn out.

 

When there's a labor shortage, retention can be the most economical means to address the shortage. So it's important to find ways to get the job done without burning out your existing employees.

 

Margaret:       Absolutely, and I know that sustainability is an area of focus for IMA. We have courses, research papers. We really have looked, in depth, at how we can help businesses implement sustainability strategies. Which, to your point, can help mitigate all of these risks that this volatile global environment is now generating. 

 

So I wonder if we can shift to your personal professional experience in accounting and finance. You're currently working as a Fractional CFO for HR Knowledge Services. What do you see as the strengths of working for your own small business, as a CFO for hire? And in working for many small businesses, both male and female-owned, do you see differences in company culture based on gender?

 

Yvonne:          Working as a Fractional CFO, it's allowed me to create a little more balanced lifestyle. That reflects the priorities that I have in my own life. I can choose who I work for and how much I want to work. And, for me, that's something that's particularly important at this stage in my career. I think that I do see a difference in companies that are led by male or female owners, or CEOs, in my limited experience. And, again, I can speak only from those companies that I've worked with, specifically. 

 

The female entrepreneurs that I've worked with tend to be more focused on balance, which is my own priority. Whereas some of the male-led companies tend to be more focused on results that do not necessarily take balance into consideration.

 

Margaret:       That's very interesting because that's exactly what The U.S. Small Business Bureau has found. In terms of the motivations for owning a small business, when you look at women versus men. And the U.S. Small Business Bureau says that women have different motivations for being business owners. 

 

For men, the motivation stemmed from wanting to be their own boss and earning a greater income. But for women, the top reason for becoming an owner was work and family balance. In total, 59% of the women felt that this was a very important reason to own their own business. So that finding seems to align exactly with your own motivations. 

That balance that you can strike when you're a small business owner. Did you have any additional thoughts on what the U.S. Small Business Bureau found?

 

Yvonne:          As I said, it aligns with my own priorities as well. I think that men have done a great job, by the way. In the last few decades of making things a little more equitable, as far as the responsibilities in the household and balancing in the household. But I think we, as women, put more pressure on ourselves. I know, I personally grew up watching this, it's a perfume commercial of a woman in a silver dress. Where she sings about bringing home the bacon, frying it up in a pan, and basically doing it all. 

 

And I think that sometimes we, as women, put more pressure on ourselves to do it all and be good at it all. And we can, but I think sometimes it's difficult to do everything well, at the same time. And finding that balance, where we can honor those things that are the greatest priority to us is the biggest challenge. And I think that that's one of the reasons why women, in general, look to open their own businesses and work for themselves. So that they can do better with that balancing act.

 

Margaret:       That's very well said. And IMA is a resource that, hopefully, some female small business owners will take advantage of as a result of this podcast. Because, like you just said, we put a lot of pressure on ourselves to do it all. But sometimes you do need support and you do need to ask for help. And, so, surrounding yourself with people that have committed to doing that can be a good strategy. 

 

This was a fantastic conversation and I really appreciate you, spending the time with us here today to discuss this topic. And thank you for all the work you're doing on The Small Business Committee. And for those listeners who are small business owners be sure to check out all the great resources, that The IMA's Small Business Committee has to offer. 

 

Margaret:       Thank you and have a great International Women's Day.

 

Yvonne:          Thank you.

 

Announcer:    This has been Count Me In, IMA's podcast, providing you with the latest perspectives of thought leaders from the accounting and finance profession. If you like what you heard, and you'd like to be counted in for more relevant accounting and finance education, visit IMA's website at www.ima.org.