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The challenges faced by women-owned businesses are myriad, well-known and documented. Things
like access to capital, lack of resources and a lack of mentors — just to name a few. But what no one talks about is the resistance women-owned businesses face when we simply ask to get paid for our products and services.
As a women-owned business, an ecommerce accelerator program and an online sales channel developed to support other women-owned businesses, the first question I am asked in 95% of conversations with potential investors, customers and partners is: “Are you a non-profit?”
When I answer with a definitive “NO,” the responses are predictable: First, “That’s a shame because we are always looking for non-profit organizations that support women with investing, technical support, etc.” The second most common response is: “Great! But we don’t have any budget. We love your work and would like to support you in other ways.”
The final type of response may be the worst of all. It goes something like this: “Wonderful! We are excited about your service or product and would love to use it. But we will need you to provide the first order at no cost.”
Related: 4 Strategies to Empower Women in the Workplace
It is a mystery to me that savvy businesspeople continue to believe, or assume, that women-owned businesses are either charities or that we don’t incur costs in developing or delivering our products or services.
There are basic costs built into any business, but there seems to be a lack of recognition that, like any other business, women-owned businesses must charge for their services and products to cover their costs, grow their businesses and even (gasp) make a profit.
I have been an entrepreneur for several years and have had the opportunity to work with both men-owned and women-owned businesses. In my experience, the conversations I just described are a rare
occurrence for those businesses owned and run by men.
Related: What Do We Tell Young Women Considering Entrepreneurship? Here are 6 Key Messages to Share
They are virtually never asked if their businesses are not for profit; they are most often paid for trial programs or products, and there is little expectation that they would lose business if they don’t add on products or services for free. This is not a new issue, and I’m sure this is often self-inflicted by women business owners.
When challenged on price, it is not uncommon for us to apologize or change the terms of the offer. We are often plagued with self-doubt and assume our products or services must not be worth it. I also want to recognize that women doing business with one another can be the largest source of this inequity.
Many times, women don’t want to pay other women and devalue their businesses. I attribute this to the sense of scarcity that women in business have come to expect and the competitive environment that mindset fosters. When you are fighting over a tiny slice of the pie, it’s hard to value the feast.
Women-owned businesses need to be paid equally for the products and services they provide. Economic development happens when businesses sell products, invest in buying additional materials, hire employees and spend in their communities. Not paying these businesses the full value of their products or services is just as impactful as a lack of access to capital.
Related: 3 Ways Women Founders Can Leverage Their Value on Women’s Equality Day — and Beyond
How much growth could we unleash in our economy if women-owned businesses, who, despite these headwinds, still manage to outperform most of the market, weren’t met with this price resistance? How many women-owned businesses have closed down in response to pressures to underprice and over-deliver? How many employees were not hired? How many new businesses were never able to get off the ground?
The next time you are negotiating with a woman-owned business, please be aware of your own potential bias and assumptions. The data has shown for years that women-owned businesses positively impact the overall economy and often outperform the market. Women, like men, are in business for many reasons, but they won’t remain in business if their products or services are undervalued. Pay her for her products and services. You will be contributing to positive economic growth, gender equity, and simply playing fair.
It’s vital to recognize and address the subtle biases and assumptions that perpetuate the challenges faced by women-owned businesses. The resistance to paying women-owned businesses fairly for their products and services is a significant hurdle contributing to economic disparities.
By acknowledging the value women entrepreneurs bring to the market and compensating them appropriately, we can foster economic growth, empower women in business and work towards achieving a more equitable business landscape. It’s time to challenge the status quo, break free from ingrained biases and build a business environment where women-owned businesses can thrive without being undervalued or underestimated.
Kate Isler
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