Challenges Women Business Owners Face revealed in Block Advisors’ 2024 Report

Insights from over 6,300 Fund Her Future grant applicants were the basis of the 2024 State of Women’s Small Business Report, recently published by Block Advisors by H&R Block. The Report covered topics ranging from businesswomen’s views on the economy to the greatest common challenges faced by a woman-owned business.

The report highlights significant challenges occurring in women’s entrepreneurial journeys. Noteworthy responses revealed that minority women respondents had different experiences than white women business owners, revealing they experienced far greater challenges.

Key Areas Covered in the State of Women’s Small Business Report

The Economy

Ninety-four percent of respondents felt ‘somewhat’ to ‘very’ positive about 2025 but expressed caution about finances given the current economy. Over half of respondents (56%) say inflation affected their prices this year. In the coming six months to a year 44% said they may be forced to cut expenses, while 39% would consider raising prices again due to inflation.

Top Motivations

Almost all (98%) respondents mentioned improving a community as a motivator to start their own business. This is reflected in the industries of the grant fund applicants with nearly one in four (23%) women owning a business in counseling, education, tutoring, or business consulting.

A preference for business autonomy and work flexibility was another top priority with 92% of those surveyed citing a desire to be their own boss and 89% citing wanting to set their own schedule. One in five (21%) women wanted to escape the 9-to-5 work schedule by pursuing work-life-balance with childcare flexibility, staying home to raise their children and creating a strong family life. ?

“Starting a business has its fair share of struggles – sustaining it brings additional challenges,” said Jamil Khan , Chief Small Business Officer at H&R Block. “This report sheds light on the ongoing obstacles, helping us better understand the resources, guidance, and tools to which women entrepreneurs of all backgrounds need access. It’s commonly known that 50% of businesses close within five years of opening – this report helps us understand how we can work with women founders to beat those odds.”

Funding and Support

The report found four of the top five barriers to starting a business dealt with funding and support gaps, affirming the value of programs like Block Advisors by H&R Block’s Fund Her Future grant.?Nearly 80% noted a ‘lack of start-up capital’, ‘needing steady, reliable income’ (76%), and ‘needing a solid business plan’ (56%) rounding out the top three barriers.?

The fourth most common barrier to women small business owners was ‘fear of failure’, cited by 54% of respondents. It revealed a rarely discussed confidence gap that over half of female business owners have, while a lack of mentorship was also a common theme. One in four (27%) women business owners said they hesitated to start a business due to the lack of mentorship during the process, making it a major barrier to women taking on the challenges of business ownership.

Most noteworthy, the lack of access to credit topped their list of challenges. One in three respondents applied for a bank loan of which 42% were never approved. For black, Indigenous, and people of color, 45% were never approved, compared to 36% of their white peers.?47% of black women business owners who applied for loans were ultimately denied and unable to access this type of funding, reflecting the financial challenges they face and gender disparities.

Outside this report women entrepreneurs receive less than 3% of venture capital funds, indicating another challenge area: access to capital necessary for business growth.?This is being addressed by the growing number of venture capital firms led by women.

Women Grant Applicants: Younger, Diverse, and Seeking Autonomy

Today’s female entrepreneurs seeking funding are younger, educated, and racially diverse according to the grant applicant pool.

Specifically, approximately half of respondents to the Fund Her Future grant survey were women who were Black (50%), college-educated or higher (63%), millennial (53%), and with two years or less of owning a business (49%).

Women Entrepreneurs Voice Their Needs

When queried about what help would lead them to be successful women entrepreneurs, respondents indicated that help with start-up capital (66%) and marketing and advertising (45%) were top.

Conclusions

Access to credit remains a top challenge for most women-owned businesses, but more so by those of minorities who experience rejection for business loans more often.

The Report confirmed the need for programs offering business grants like Fund Her Future that address the gender gap of unequal access, so important for women to have successful businesses.

It also revealed the motivations, challenges, and needs of today’s women in business who showed their perseverance in their survey responses. Yet, the lack of funding was viewed as contributing to a confidence gap noted by more than half of respondents.

?“It is clear that women entrepreneurs are determined to find success on their business journey. For these underserved business owners, the right support and guidance in those critical early years can make all the difference in navigating the challenging road ahead,” said Khan.