4 Post-Pandemic Lessons From LGBTQ+ Small Business Owners

What does your favorite small business mean to you? At their best, small businesses have the power to create jobs, foster community, and change the lives of everyone they touch.

I was reminded of this fact when I came across the Lesbian Bar Project, a national fundraising effort with a mission to save the United States’ roughly two dozen remaining women’s bars. As someone who loves bars, I am in full support. But after more than a year of the pandemic, these businesses are on the brink of closing forever, eliminating one of the few places where members of the LGBTQ+ community can go to feel safe, accepted, and free to be their true selves.

The pandemic is not their only issue, however. My company Hello Alice spent Pride Month listening to LGBTQ+ entrepreneurs, who told us of lending barriers, personal prejudice, and other factors that complicate their ability to recover from the last year and grow into the future.

In partnership with StartOut, the National LGBT Chamber of Commerce, and the Global Entrepreneurship Network, our team set out to gather the numbers and testimonials to better understand who LGBTQ+ owners are and what challenges they face. This latest impact report analyzes data from more than 14,500 LGBTQ+  small business owners.

During an adjacent town hall featuring Sabrina Kent of NGLCC, Sarah Burgaud of StartOut, and Donnya ‘Zi’ Piggott, co-founder and CEO of LGBTQ+ travel platform Pink Coconuts, we discussed the following key takeaways.

As with all small business owners, the pandemic was hard for LGBTQ+ entrepreneurs. Hello Alice found that these owners predominately operate in industries most affected by public health restrictions, such as the arts, retail, and health and wellness, and businesses in every industry were forced to pivot in some way. Interestingly, an NGLCC partner survey found that although roughly one-third of LGBTQ+ small business owners lost 50 percent of their business due to Covid-19, nearly 80 percent expect to make a full recovery.

Panelists said that these figures speak to the inherent resilience of the queer community and a predictor of a strong recovery.

“As LGBTQ people overall, we always learned to be resilient — even in our personal lives, dealing with family or coworkers or people in general who are not accepting,” said Piggott of Pink Coconuts. “Because of that, it has taught us to use these same tools to persevere.”

There are many social and professional barriers limiting the success of LGBTQ+ founders that long predate the pandemic. Because of the lack of visible role models and abundant success stories for queer founders, many LGBTQ+ entrepreneurs feel uncomfortable in meetings and at events. Additionally, the larger business community has a long way to go to educate themselves on LGBTQ+ issues and deprogramming basic biases and prejudices.

“A lot of entrepreneurs share the fact that they cannot really be either out or their authentic self in business meetings with a lot of non-LGBTQ folks,” said StartOut’s Sarah Burgaud. “Especially for transgender and gender nonconforming founders, they say that if they do not show the right gender identity or traditional gender identity, they are losing business and losing deals.”

Crucially, the panel pointed out that these same issues manifest within the LGBTQ+ community, too.

“We have a lot of work to do within our own LGBT community when it comes to gender inclusion,” said Kent of the NGLCC. “Just because we’re L or G or B doesn’t mean that we’re well-versed on these things. We have even more work to do when it comes to breaking down silos within our community.”

As Kent also reminded us, sexual orientation and gender identity are not protected classes under the 1964 Civil Rights Act like race, color, religion, and national origin. Without this protection, LGBTQ+ entrepreneurs can face discrimination from lenders, mentors, and others essential to starting a successful business. Congress is currently considering a bill called the Equality Act to change this.

“We need the Equality Act because, in over half of the states in the country, you can be denied access to credit for a business loan just because of the fact that you’re LGBT,” Kent said.

A version of the Equality Act passed the House of Representatives in February, but the bill has recently stalled in the closely divided Senate. While there are no immediate plans to vote on the bill, we must all urge our senators to negotiate a version that will become law and protect all members of this vulnerable community.

Changing laws takes time, but in the meantime, businesses big and small can make meaningful changes to improve the lives of the LGBTQ+ community. For instance, Burgaud of StartOut recommended offering trans-inclusive health plans to employees to receive the necessary medical care denied by many insurers.

Companies like Dell Technologies have supplier diversity programs and events encouraging business connections with LGBTQ+ owners.

Elsewhere, Kent said that if you work with LGBTQ+ suppliers — or any small business, really — and consider revising your payment terms to ensure a 20-day turnaround versus the standard 90- or 120-day cycle. Why? Hello Alice data show that LGBTQ+ owners report annual revenue of less than $100,000; short payment cycles ensure these small businesses with limited cash flow can participate in and benefit from supplier diversity initiatives.