One explanation could be that women are more risk-averse in business than men – at least in the way risk is traditionally defined, according to Harvard Business Review. This also supports our earlier findings in our Small Business Outlook 2017: 25 percent of women business owners have no growth plans for 2017, compared to only 11 percent of men business owners. So if women are less likely to take on risk like growth, new debt, or employees, it makes sense that they experience fewer incidents.
Another consideration: 48.3 percent of women run home-based businesses, according to a study by Experian, compared to 44.8 percent of men. That could contribute to why they would be less likely to have, say, a customer injury.
In addition, women are more likely to run solo businesses because they choose not to add employees. If women business owners tend to work alone, this eliminates another one of the biggest incidents reported in 2016: employee injuries.
"In my experience of researching and coaching women at all stages of business, I've found that very often women do have different business goals," says Christy Wright (@ChristyBWright), the creator of Business Boutique, a certified business coach. "For example, 90 percent of women-owned businesses do not have team members, not because they can't have them, but because they don't want them. Their definition of success is not necessarily measured in traditional growth metrics such as team members, revenue, or expansion."
Point of Interest 3: Client Complaints / Contract Disputes Are the Most Frequently Reported Incident
Of all the incidents our survey respondents experienced in 2016, the most common was a client complaint or contract dispute. More than 22 percent of business owners report having this issue. Given that the median cost of a contract lawsuit is $91,000, according to the Court Statistics Project, small-business owners may be better off working with customers to resolve issues rather than risk squaring off in court.
For example, in his practice, Andrew Thompson frequently has clients whose customers refuse to pay full price for a product or service that didn't meet their expectations. Thompson says if both sides are willing to work with a mediator, they can often avoid a lawsuit and subsequent insurance claim.
Mediator Nancy Gabriel of Mediation Around the Table (@mediationtable) offers some advice on how business owners can smooth things over with an angry customer.
"I suggest that you invite the disgruntled customer and the appropriate company representative to meet with a neutral third party," says Gabriel. "In the invitation, list three objectives: to understand, to be understood, and to brainstorm a solution."
Peri Berger, an attorney at Harris Beach PLLC (@harrisbeach) adds, "At the end of the day, resolving complaints has a lot to do with the motivation of the customer and the flexibility of the business. Every situation is different, but we recommend that clients have a good policy in place for handling customer complaints. That does not necessarily end a problem, but it is a good starting point for resolving an issue, especially if your policy has been vetted by legal counsel."
Even if a customer appears to be making an unreasonable demand, it's generally best to find some middle ground rather than face a professional liability lawsuit. Enough bad feelings over a soured business deal can prompt customers to seek out legal solutions, even if they don't have a particularly strong case.
Client Complaint Resolution Tips from Small-Business Owners
Really, no one's more of an "expert" than the people actually dealing with client disputes. So we asked some small-business owners how they handle these misunderstandings.
To resolve a customer complaint, the small-business owners we interviewed say to keep these five points in mind:
- Get everything in writing, from initial contracts to requests for changes.
- When a customer complains, take the time to really listen to what they have to say.
- Acknowledge their frustration.
- Propose options for a solution – but not necessarily a refund.
- If you can master complaint resolution, these customers can end up being some of your greatest cheerleaders.
Here's a closer look at each.
"Back everything up with written confirmation, including conversations," says Marie Hale, cofounder of @revenue (@revenuechicago), a boutique sales and marketing collaborative. "When you have the uncomfortable conversation about ending a contract, be very specific without being accusatory in your review of the discrepancies and where things went off the road."
If a client is upset with your work, try to remain as calm as possible when discussing the issue.
"The first thing I do when dealing with an angry client is take a deep breath," says Christiana Datubo-Brown, an entrepreneur with a master's degree in marriage and family therapy whose practice focuses on human behavior and relationships. "When someone is complaining about a product or service that you lovingly created, it's easy to take it personally and get defensive. But it isn't personal. The second thing I do is listen."
Datubo-Brown says she first acknowledges the customer's frustration, and then offers them the choice of two solutions – neither is a refund.
"Refunds, especially with clients and customers I want to keep, are always the last resort," says Datubo-Brown. "This way I maintain control of the situation and empower my client at a time when they may be feeling less than powerful. This simple process has turned angry clients into happy and loyal clients who go on to give me rave reviews and tell others about my products / services."
Steve Benson (@SteveBenson), founder and CEO of Badger Maps (@BadgerMaps), agrees.
"When a customer has firsthand experience with you listening to their pain, recognizing that there is a problem, and then solving the problem for them, they become satisfied customers and brand ambassadors," he says. "There is no greater way you can prove your competence to a customer and no greater way to win their trust."
Small-business owners are generally adaptable and good at solving problems – they have to be. These traits help many business owners resolve matters themselves and avoid filing claims, but that doesn't mean they won't face incidents that could hurt their business. The best way to protect your business is through a combination of risk management and the appropriate insurance coverage.
To learn more about the topics mentioned in this report, be sure to read the Insureon blog in March, which will cover why commercial leases require General Liability Insurance, insight from business lawyers on why insurance is often a contract requirement, and when to report a claim.