Skills for Women Business Owners to Win More Money — With Far Less Anxiety
It is common knowledge that there is a wage disparity between men and women in business. It is even more obvious that women hold far fewer executive positions than their equivalent ratio in the workforce. But what is less common knowledge is that women make far less than men when they are the actual business owners.
According to an annual study by American Express OPEN, women-owned businesses start up at the rate of 1.5 times of those owned by men, which has been a trend throughout the economic recession. But women-owned businesses average $155,000 in annual revenues, while those owned by men average just over $630,000 in annual revenues. That means that women-owned businesses make just one quarter of what men-owned businesses make. And U.S. Census data confirms these findings: women own 36% of all U.S. businesses, but produce only 4.82% of all revenues.
The opportunity? Per the U.S. Women’s Chamber of Commerce reports, the failure of woman-owned firms to deliver their forecasted revenue potential, “produces an annual opportunity shortfall of over $10 trillion dollars.”
Women Must Negotiate for More
So, why are women earning so much less as entrepreneurs? As business owners, they are the boss and responsible for their own fortunes. So what is holding women entrepreneurs back? As Sheryl Sandberg, COO of Facebook, suggests in her book, Lean In, women need to improve their business negotiation skills. But, women do not need to act against their personalities, instead they need to learn the skills to appropriately ask and negotiate for what they want.
There are many negotiation techniques. The first step is to learn to ask for what you want.
Learn to Ask For What You Want
Let’s start by looking at some common female traits. Some women have a life-long habit of people pleasing. Others want to avoid rejection. And still others put themselves last out of both empathy and the desire to avoid creating negative feelings in another person.
All of these behaviors are pro-social habits that help women succeed in groups and elevate the well being of their communities. But the downside is that women may struggle with asking for what they truly desire from other people, and the chronic practice of not asking directly for what they want holds many women back in business. Fortunately, women can overcome their hesitation to ask directly for what they want with simple practice.
Do this by flexing your “ask” muscle: speak up more often, and start in non-threatening situations first, like at a restaurant or when out shopping. And hone this skill while looking another person in the eye, even if this is much harder than asking for something in an email. On the other hand, it is harder for people to reject you in person because they have to look you in the eye!
After a while of doing this, you will begin to notice that people say yes far more often than they say no. Interestingly, however, never hearing the word “no” means that you are not asking for enough, and should stretch yourself further. Let me explain.
Learn to Laugh Off Scary (and Unrealistic!) Business Scenarios
If “stretching yourself further” and asking for something is causing you anxiety, imagine the worst-case scenario. For example, pretend that a customer has a big contract to award; you know that your business could handle the work, but your customer has not thought to ask you to bid. So you need to ask the customer for the work, but you become paralyzed at the thought.
Stop for a minute and address the fear by acknowledging it. Then shed light onto it as ridiculous and unfounded by visualizing what you are afraid of, and following through to its most dramatic conclusion. You could consider asking yourself, “What is the fear?” That the customer will fire you for having the audacity to ask for work, proclaiming, ‘How dare you ask to bid on a project we have! We will immediately terminate our relationship with you forever! And we think you’re ugly! You will die alone because no one will ever want you!’ Sounds ridiculous, doesn’t it? The fear may be so dramatic that putting it into words may make you laugh. And if you are laughing at your fears, they will be minimized, and you will feel emboldened to ask for what you want.
If that does not work, another trick is to think about the consequences of a worst-case scenario so that they do not seem overwhelming. What will happen as a result of you asking and hearing no? Will you be homeless, penniless and publicly disgraced in front of millions? No. So whatever the fall-out of a “no” answer, you will likely see that it can be easily addressed. And you will still be alive, your cat will still love you, and the earth will not swallow you if you hear the word “no.” Breathe.
The gist of all of this is that getting comfortable with asking and risking rejection will go a long way towards getting more of what you want in your business and career.