What is your business worth? What are you worth? Do you know?

For women business owners, the question of self-worth has a habit of working its way into business, thereby affecting pricing, profitability and sometimes even growth decisions. In addition, women often tend to be intimidated by numbers and money and are put off by having to negotiate and put a value on their services.

Numerous studies and statistics suggest that women-owned enterprises tend to be concentrated at the marginal end of the business sales and profitability scale. One explanation is that this is exactly where their owners prefer to be. Women’s definitions of success are complex and financial gain is not always a priority. On the other hand, is there any reason why women can’t have it all: the work/life balance, the creativity, the great relationships, and the strong financial performance?

Women often get into business because they’re good at something and that ‘something’ is as much a reflection of who they are as the clothes they wear. The business may have started out as a hobby but then became an opportunity to generate income. Moving from a sideline to a business may have been planned, or it may have ‘just happened’.

Commitment is the first step in moving your business forward. This requires acknowledging to yourself and others that you are in business to achieve certain goals, which should include meeting sales, profit, market share and customer satisfaction targets.

It is amazing how many businesses operate day-to-day without a strategy or plan. Take pricing, for example. Pricing decisions have far-reaching implications. Not just for profitability, but for sales volumes and consequently workload.

Consider that by selling your product or service with a considerable mark-up, you end up with a profitable business. The old adage: buy low, sell high applies. Why, then, do so many women undervalue their product or service and then try to make up for it by running themselves ragged? What are the thoughts and emotions that cause women to end up in this state?

The answer to this question is complex. See if you recognize yourself in any of the following scenarios:

1. Second-place Syndrome

Your business started out as a hobby or special interest. As it’s grown, you’ve continued to maintain the household and other prior responsibilities. Maybe you have a husband or partner with a ‘real job’ that takes priority over your business, because nobody really takes what you’re doing seriously. Your business always seems to come in second in the priority list, so it doesn’t get enough care and attention to thrive.

2. What if They Don’t Like Me?

Fear of rejection can greatly influence your business, as it is said to drive much of human behaviour. That fear can be particularly salient if your product or service is a reflection of your creativity, talent or taste. You set your prices based on your desire to sell and not your cost of doing business, the requirements of your target market or ‘what the market can bear’. Your fear of being rejected or ‘not liked’ can impede your profitability.

3. I Can’t Do That

Women don’t always feel comfortable in a rough-and-tumble competitive model of business. They tend to take a more cooperative approach. Nothing wrong with that. Where you get into trouble is in a) undervaluing your own needs or b) over-valuing the wants and needs of potential customers, especially if they aren’t really in your target market anyway. The ideal situation for a business is when you are able to offer what you do best and that is exactly what a well-defined customer group wants. That way, you can confidently ask for a price which not only covers your costs, but reflects your value. In order to get to that ideal situation, women often have to overcome the tendency to be overly modest, and stop playing the tapes from our childhood about not blowing our own horn.

4. There’s a Lot More than a Sale Riding on This

Sometimes businesses are started out of necessity. Problems arise when financial demands on the business are unrealistic and out of sync with progression. This can happen when a company is put together on a shoestring budget and there is no allowance for unexpected growth expenses.

5. Starting From Scratch

Traditionally, women have gone into business with less business background and connections than their male counterparts. As a result, they often have to negotiate in newly-formed relationships. Because we know that an established customer is our best customer, it can be hard to create those new relationships when your competitor is undercutting and, often, undermining your credibility.

6. What If I’m Over My Head

If you research your market, determine your costs, price right and set a strategy for the future, odds are your business will succeed. The question is: can you handle it? For some women, the idea of becoming the CEO of an enterprise that started in their kitchen is outside their comfort zone.

There are many complicated reasons for undervaluing a product or service. As the summer approaches, take a look at your business and think about the scenarios above. Know that many, many women business owners in BC deal with these scenarios. While we can’t help you address all of them, we hope that you’ll feel more comfortable facing them, knowing that you’re not alone.

Women’s Enterprise Centre is the leading business resource for BC women who are starting, growing or purchasing a business. Our team of professionals provides business loans, skills training, advice, mentors, resources and a supportive community to help women start, grow and succeed in their business.

Call us at 1.800.643.7014 or email inquiry@womensenterprise.ca from anywhere in BC

See all articles by Guest Author