Angela Muhwezi-Hall and Deborah Gladney founded QuickHire, a recruitment platform, during the pandemic.
When the coronavirus pandemic closed stores across the country, sisters Angela Muhwezi-Hall and Deborah Gladney decided it was the perfect time to start a new business.
It was an idea they’d pondered for years: a hiring platform called QuickHire to help the service industry and skilled workers find work. They had seen what they called the outdated hiring process used by small operators and they had also understood the importance of this type of work.
“Covid was definitely the catalyst when we saw millions of people lose their jobs [and] People had to re-qualify, “said Muhwezi-Hall, 31, who quit her job as a university advisor at a university in California to start the company in her hometown of Wichita, Kansas.
The sisters pooled $ 50,000 from their savings and 401 (k) plans to get underway in September and recently received a $ 350,000 investment from an angel investor.
More from Invest in You:
Guy Fieri’s mission is to save restaurants affected by a pandemic
This is how these small businesses turned to survive during Covid
According to the venture capitalist, women entrepreneurs expect “enormous” opportunities
“We believe this is the perfect time,” said Gladney, citing the labor shortage many companies face when trying to get back up.
Muhwezi-Hall and 34-year-old Gladney, who had given up their PR consultant jobs, were part of the surge in startups in the US last year. According to the US Census Bureau, around 4.3 million new business applications were submitted in 2020, nearly 1 million more than in 2019.
“We almost never see such a boom in a recession,” said Luke Pardue, an economist at the payroll service provider Gusto.
Most of the new companies were founded by women and people of color, according to the company’s latest survey. In 2020, 11% of new business owners were Black or African American, compared with 3% in recent years, and 49% were women, compared with 27% in recent years, according to Gusto. From April 4 to April 16, 1,568 new business owners were surveyed who had been affected by the pandemic.
“This is no accident,” said Pardue, who pointed out that 51% of owners started their business for economic reasons and a third said they did because they lost their jobs.
“Women and people of color were the ones who bore the brunt of the recession last year,” he added. “They were resilient and turned obstacles into opportunities.”
From speech pathologists to making smoothies
Source: Ashley Walker
When Ashley Walker, 34, opened her Smoothie Me Please business in Riviera Beach, Florida in January, she had something many other entrepreneurs didn’t: giving her city financial support.
The single mother received a grant from the city’s Community Redevelopment Agency two years ago. The site, an empty building, was then renovated by the city. She’s been working rent-free there for six months now, and the remainder of her three-year contract includes very affordable rent, Walker said.
“It was the perfect time to risk everything because I had the support,” said Walker, who worked as a speech pathologist before opening her smoothie shop, which also sells sandwiches and popsicles.
Still, it wasn’t all smooth sailing. Construction was delayed due to Covid and it was difficult for her to get a business loan. One potential investor also failed. Ultimately, she took out a personal loan of $ 15,000 to pay for marketing and equipment.
Still, Walker is already making a profit thanks to the lack of rental payments. She’s not the type to worry, she said when asked when these payments will start.
“Everything I need fits together,” said Walker. “I am confident that things will work out and that we will make the necessary adjustments as the market changes.”
A question of survival
Justin Sullivan | Getty Images News | Getty Images
The support Walker has received is an example of help new business owners should have access to, believes Gusto’s Pardue. This help could be critical to their survival.
About 20% of small businesses fail in the first year. Still, 51% of owners in Gusto’s survey believe they will fail within the next 12 months without additional support. Meanwhile, 73% of black owners and 71% of Asian Americans / Pacific Islanders say the same thing.
“Ultimately, this could actually widen the gender-racial gap as these business owners could experience business failures a year later,” Pardue said.
He advocates replenishing the paycheck protection program that gave small businesses unsuccessful loans and allowing these new owners. He also wants the Small Business Administration to rethink the ways in which aid is being given and who it is reaching, such as women and minorities.
“The conversation can’t end with ‘This is an inspirational trend’,” he said.
“We need to think about ways to support these new businesses as new, young businesses are the engine of job growth in the economy.”
SIGN IN: Money 101 is an 8-week financial freedom learning course delivered to your inbox weekly.
CHECK OUT: I’m a mother of three whose part-time job is now a full-time job that brings in $ 5,000 a month: Here’s my best advice about Grow with acorns + CNBC
Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.