More than 10 million women own businesses in the U.S. today. In fact, the ratio of women to men starting small businesses is 2-to-1. According to the Center for Women’s Business Research, the fastest-growing segment of women business owners is baby-boomer women 50 and older. Yet too many women business owners are broke. And it’s all because of how we “do” business.
So why are so many women business owners broke?
1. Charging too little. Women need to stand up and demand their worth. Too often, a chronic lack of confidence holds us back. Many women fear they’ll lose their values or become someone they don’t care for if they have more money. Ladies, snap out of it! When someone asks your fee; make eye contact, say the price and wait for an answer. If you get a reaction that your fee is too high, you know you’re not speaking with your ideal customer. Set your pricing so that you earn a profit, otherwise you could find yourself with an expensive hobby and not a real business.
2. Emotional decision-making. As women, we sometimes take things personally that we shouldn’t. It’s just business. Neither your customers nor your employees should know your personal feelings. Use data to make critical business decisions. Focus on what’s in the best interest of your business. I’m not a big fan of women “acting like men,” but in the case of decision-making, it’s appropriate. Don’t complicate your business with a bunch of personal relationships, either. I believe you should never hire someone you can’t fire, so avoid hiring friends and family.
3. A noncompetitive attitude. Profit is how we keep score in business. However, we are now in a value-added economy, where people often over-deliver on service to attract and keep customers. This is a good strategy, but everything has limits. If you give everything away, there’s nothing left to take home. Go after business competitively. And never hesitate to make collection calls for payment. Do not finance your customers.
4. Not asking for the business. Generally, women excel at communicating and building relationships. But sometimes we spend so much time doing so that we forget to directly ask for the business. We’ll go to a capabilities presentation and not close with follow-up steps. Customers have no problem wasting your time. People will never hesitate to ask to pick your brain. Always be willing to schedule a 30-minute call or coffee appointment, but do not solve the customer’s problem during the meeting. Ask clarifying questions, validate that you’re more than qualified to solve their problem, and let them know how much it costs to work with you. You should close by asking them, “When do you want to get started?”
5. Superwoman syndrome. Superwoman can do anything. She can leap a tall building in a single bound, have dinner on the table by 6 p.m. and be the head PTA mom, too. Let’s get real, ladies: Superwoman does not exist. One of the deadliest things you can do to your small business is to refuse to delegate or ask for help.
Early on, get yourself a cabinet of advisors. These are four or five people already invested in your success. The group should include an existing entrepreneur, a potential customer, a mentor, an accountant and a lawyer. Often these people are already around you, but they’re not aware of each other. They could be more effective if you got them together occasionally, and best of all, they will typically work (or at least advise) for food.
If you’re married–especially if you have kids–you might need a mother’s helper or au pair who can help with household stuff, personal errands and drop-off and pick-up for kids’ activities.
As women, we are more likely to listen to our inner voices; just make sure that you keep your self-talk positive. Do not start your day in a race. Try meditation or prayer. Cut yourself a break. Remember to be patient with yourself and your customers, and you’ll never go wrong.
This article was originally published at Open Forum. ©2012 FedEx
What are your tips for helping women develop stronger business skills?
For more tips on how start or grow your small business subscribe to Melinda Emerson’s blog http://www.succeedasyourownboss.com.
Melinda F. Emerson, known to many as SmallBizLady is America’s #1 small business experts. As CEO of Quintessence Multimedia, Melinda educates entrepreneurs and Fortune 500 companies on subjects including small business start-up, business development and social media marketing to fulfill her mission to end small business failure. She writes a weekly column on social media for The New York Times. Forbes Magazine named her #1 woman for entrepreneurs to follow on Twitter. She hosts #SmallBizChat Wednesdays on Twitter 8-9pm ET for emerging entrepreneurs. She also publishes a resource blog http://www.succeedasyourownboss.com Melinda is also the bestselling author of Become Your Own Boss in 12 months; A Month-by-Month Guide to a Business That Works.
Hey Melinda –
Terrific and insightful post here – you really hit the nail on the head. In fact, not one of these issues is exclusive to women – well, except for the gender adjustment for Reason #5. -=]
The first reason really sticks out to me as well – as a marketing coach I’m always advising price increases as well as all the necessary changes to facilitate and justify increasing price. Changes that aren’t necessarily expensive, difficult, or time-consuming to make, but that always result in you working with friendlier, more appreciative, more patient clients.
Realistically, the more you charge, the fewer people you have to work with (and who therefore can get more of your personal attention and best work, as warranted) – leads to happier clients AND a happier you. Who wouldn’t want that?
Not to mention, with the increased profit – you can AFFORD to invest more to reach these ideal clients!
Thanks for the great post – I’m sharing it right now. -=]
I agree with all of these reasons. I myself have struggled with overcoming these myself.
WOW!! Thank you for this article! I totally agree and I will be making changes starting today!!
I have worked as a relationship consultant with families in business for over 30 years. I agree with most of your points except the one about working with family members.
In many types of businesses working as a spousal team, hiring children and siblings working together in a partnership can make a dynamic and successful business. While issues arise as the business grows and changes most can be resolved.
Characteristics that often are at the root of the success are common goals and values, similar work ethics, high trust and a keen desire to succeed.
There are lots of examples where working with family members doesn’t work out so well but I believe there are many more that work very well. The ones that work usually have good contract agreements, clear expectations and are set up as a serious business.
Great article Melinda. I agree completely. Working with my spouse has radically affected our business in a good way since he calls me out when I am making these typical types of mistakes. When I took business development classes, they gave me similar advice, coaching or having an advisor as you recommend could be invaluable if you are a sole female owner. I also recommend yoga. (-;
Thanks so much for this much-needed article. There’s really nothing in here that women entrepreneurs haven’t heard before, but for some reason we constantly need reminding. Exhibit A: myself. I just terminated a partnership agreement I should never have gotten into in the first place, but because I made the original decision to enter into it from an emotional standpoint rather than a business one, I am quite a bit in the hole as a painful consequence of that mistake.
If women entrepreneurs have a difficult time separating the emotional from the professional/financial, I would strongly recommend having a team that includes at least an accountant and a lawyer on her side whenever she enters into negotiations regarding her business. You mention having an advisory board that includes these two critical people, but they should also be representing you in serious matters concerning, say, ownership of your business. It may cost you at first, but trust me – it will cost you even more (WAY more) if you choose to go it alone without that kind of support.
Marjorie—
Thank you for your comment. Some business lessons are more expensive than others. I agree with you about getting a lawyer and accountant in place first and using them a business advisors too. I hope the blog post will help you and other women business owners stay focused.
To your business success,
Melinda
This is awesome, I must share
… and Melinda does it again. Great article!
Aradia–
Thank you for your comment. I want you to know that I am committed to help small business owners get out of there own way.
Continued Success–
Melinda F. Emerson
I’m so glad you’re discussing this, Melinda. You know you had me at ‘Charges too little’. While I agree that all entrepreneurs struggle with the pricing question, women are more challenged by it.
One of the biggest issues I see in my clients that they worry a lot that they’ll charge too much. That clients will balk and walk away, especially now. They want to find that sweet spot between earning what they deserve and client’s feeling like they got a great deal.
Personally, I say make your own sweet spot. I’m talking about how to make price a non-issue by creating a pricing conversation, not throwing out a naked number and saying take it or leave it in my August webinar.
I feel a rant coming on so I’ll take it over to my blog… Thanks!
Melinda, I could give you a big huge hug for this one. After I stopped listening to people and charging what I thought people could afford, things changed.
My book, 62 Posts to Overcome Blogger’s Block, will be launched next month. I am charging $99 because I’m selling it as a text book. My friend called me today telling me that it cost too much. I told him that he was not my target market. He said, “What about those people who want to support you?” I’m going to offer a friends and family discount, but if they really want to support me, they can direct me to groups of people who want to learn about blogging and will prepay for my books. I’m done with questioning myself and undervaluing my services.
Great information wrapped up pointedly! I have bookmarked it and have vowed to read daily for a month, to remind myself of the importance of each factor (especially keeping the emotions out of business). Also sent it to a couple of colleagues who would benefit, as well. Thanks!
WOW! You’re so much right on point! And I honestly saw myself in some of these steps / tips of being that BROKE woman business owner…
I can honestly say, after reading this I am totally guilty AND totally confident that I need to:
1) STOP IT and;
2) STEP IT UP!
Because Melinda, at the end of the day I cannot let them control my destiny. By doing some of these things (the wrong way) this is now telling me “they had the control of mt wallet” and not me!
thanks so much for sharing this. Truly an eye opener all the way!
Janelle M
Melinda,
I would also like to add that business people including women don’t understand the power of branding. As you know, branding sets your product or service apart from the others. Without branding , entrepreneurs are just ‘swimming in the sea of sameness’. The product with the best brand will be the one that people flock to to do business.
Melinda,
Great analysis! I would also like to add that business people including women don’t understand the power of branding. As you know, branding sets your product or service apart from the others. Without branding , entrepreneurs are just ‘swimming in the sea of sameness’. The product with the best brand will be the one that people flock to to do business.
I needed to see this. Thank you for writing such a brilliant yet very honest article.