The Savvy Entrepreneur

The Globe and Mail came out with an interesting article last week, entitled Are women shortchanging themselves?

Here are quotes I found most interesting:

It seems that women, who have fought hard for pay equity, shortchange themselves when they launch their own businesses. Compared with men, they typically charge less and their businesses generate less revenue.[...]

“I always like to offer services to people I think can really benefit from them, and that isn’t always the people who can pay top dollar,” said Ms. Morris.[...]

“Generally, I think women may start off charging about the same as men these days. But from the conversations I have had with women, their pricing is more flexible than men’s,”[...]

In addition, women, unlike men, said they would be better off financially if they were working as employees rather than as business owners. When asked whether they were making more money than they would if they worked for someone else, female entrepreneurs were much less likely to agree (38 per cent) than their male peers (55 per cent), the survey found.[...]

When it comes to setting rates, women charge less than men do for the same work or similar work “because many women tend to confuse business issues with personal issues.”[...]

“For example, [women] tend to act on feelings more than on rational thinking. . . . If the client says ‘it’s too expensive’ they might hear ‘you are not worth that much’ and decide to lower the price.”[...]

Among the factors that influence revenue are formal business training and the number of years a person has been in business, he said. It can take three to five years for a business to show real growth, and women, who are starting their own businesses in increasing numbers, have entered the small business game later than men have, he said.

I have to say that I am ‘guilty’ of negotiating my fee and I know I charge less than most coaches. However, I don’t believe it’s because I’m a woman… I do it because:

1. Market research tells me so. I have to agree with Ms. Morris’ statement (quoted above). My target market (self-employed service-based entrepreneurs, usually starting their business) can’t afford the ‘typical’ coaching rate. So either I: (a) lower my fee, (b) select a new target market, or (c) charge more, keep the same target and get little to no business.
2. I get something out of it too. When negotiating my fee, it’s because we’ve created a win-win situation for all involved (including myself).

This is an interesting topic, and I’d love to hear what others have to say on the subject.

Is this really a gender issue? Whether you’re a man or woman entrepreneur, do you tend to be flexible with your rate? If so, what does someone have to say to make you lower your price? Is your standard fee lower than your competition? Why? Does this hurt your business? Would you be better off as an employee? What’s your reply to someone who says your fee is too high?