Insureon's Small Business Outlook 2017 gives you plenty of data to chew on, but one stat has been kind of hard to swallow. According to our data, women-owned businesses tend to earn less than their men-owned counterparts. Here's a sample of what the survey shows:
- Women are three times more likely to earn less than $25,000.
- Men are twice as likely to earn $150,000 or more.
It's well known that women earn less than men when they are employees. But why would that be true when they're running the show? And what can women business owners do to boost their revenue? We talked to a few business coaches and consultants to find out.
Why Do Women Business Owners Earn Less Than Men?
"Men typically charge their value," she says. "Women are much more likely to charge what the person can afford or to swap services with colleagues."
Some say the tendency for women to undervalue their work may be a result of socialization.
"Guys from the beginning are thinking about their value in terms of work," says business coach Amy Applebaum (@amyapplebaum). "They're having conversations about the value of a product or a service so those conversations are more comfortable for them."
It's possible some women haven't learned to do this. Applebaum says that might be because women have spent less time in the business world. They haven't had as much practice putting a value on their work.
But when women rise above their discomfort and set fees that are appropriate for their experience, they often find the business world accepts it.
The bottom line: "Women have to ask for what they want," says Applebaum. "And if someone's not willing to give it to you, you have to be willing to move on."
Figuring out your ask is tricky. Check out "Consultants: Super Easy Ways to Set Your Prices Right" for some advice.
Small-Business Revenue Builder #1: Hire a Mentor
For many women, earning more revenue is not a matter of improving their business skills. The bigger issue is getting past the mindset that makes it hard for them to ask for what they're worth. That's why business coach Patty Lennon (@PattyLennon33) says it makes sense to invest in mentorship.
Lennon says hiring a mentor is "an investment that is going to create huge returns down the road" because it helps you make smarter decisions. Unfortunately, the same socialization that makes many women struggle with pricing also makes them hesitate to spend money on a business coach.
"We don't think we're worth it," says Lennon. "Women have to learn the value of investing and how that is different from spending."
Women who do pay for a mentor get help with setting their price point and developing a wealth mindset, which eventually takes their business to the next level, says Florence.
The bottom line: A business coach can help you bridge the gap between where your business is and where you want to take it.
Small-Business Revenue Builder #2: Outsource Manual Tasks
"Even though I liked doing my Quickens and reconciling my bank accounts, I realized that time should be spent on either delivering a project or getting a project," she says. "So I outsourced that from very early on in my career, and not a lot of people do that."
More people probably should. Offloading lower level tasks gives you time to focus on what truly creates earnings for your business, says Lennon. And even further down the road, she says you can "step up and take on the CEO role of visioning and strategy."
The bottom line: Berkley Jackson says women business owners really have to ask themselves, "What is the unique thing that I bring to the project?" Focus on that and contract out the other jobs. Take a look at "The Freelancer's 6 Question Guide to Knowing When to Outsource" for more ideas.
Small-Business Revenue Builder #3: Get Involved
Never does the phrase "time is money" have more meaning than when you're first starting out. But Berkley Jackson recommends spending some of that time with a group that can help you build your business. She describes her work with Women in Consulting as "the most fruitful investment" she made in her company because it brought her great relationships and referrals.
"I didn't realize how strategic it was going to be when I joined the group," says Berkley Jackson. "But it turned into more – like cross referrals type of things, subcontracting opportunities. I'd guess 95 percent of my business leads back to being active and visible with the organization."
The bottom line: Relationships are critical to your business success, so invest time and energy with business organizations you believe in. Find some options in "The 7 Best Small Business Groups for Networking."
About the Contributors
Business coach for women, author, speaker, and mother, Amy Applebaum, has helped hundreds of thousands of women entrepreneurs around the world achieve success through the Ambitious Women Success Club, the first ever, on-demand business coaching platform. Applebaum is a frequent television guest and has been featured in the NY Times, the Herald Tribune, Cosmopolitan, Teen, Woman’s World, and Shape. She is a certified hypnotherapist with a collection of over 100 meditation downloads & apps that you can find on her website amyapplebaum.com.
Jen Berkley Jackson is the owner of The Insight Advantage, a full-service research firm that helps organizations use customer insight to grow profits and market share. The three research areas she focuses on are product research, win/loss research, and customer satisfaction. She has experience managing research projects in a multitude of industries, including high tech (software and hardware), consulting services, medical equipment, pharmaceuticals, utilities, and more.
Emily Florence is a veteran business coach and PR and publicity consultant helping entrepreneurs create successful businesses they truly love. She’s the founder of Savvy Miss, a Forbes Top-100 Website for Women and specializes in helping women experience more joy and ease in their business and life and less struggle and overwhelm. Florence believes we all have unique gifts to share with the world and deserve to make a living doing what we love. Learn more and sign up for her newsletter at: http://www.EmFlorence.com.
Patty Lennon is an expert business coach, speaker and best-selling author who partners with individuals and groups that want to build a business plan that works, learn how to balance dreaming with action to achieve true success, and produce transformational events that create real sales. She believes the first step to this is mastering time. You can access Patty's Time Management System at no cost here.