How women can avoid a pay cut when they start their own business

by | May 13, 2015

PaycutHow not to be in that 68%

Recent research I conducted of 300 Corporate Crossovers® (women who leave their corporate jobs and start their own business) in the US and the UK, revealed an alarming trend.

68% of women who left their jobs to start their own business or go freelancing, are earning less in their new business than in their last job. Why would these women, enjoying financial success and stability in their corporate lives willingly take a pay cut when they start their own business?

These women didn’t intend to reduce their earnings, it just ended up that way. Digging deeper into the research 4 common themes emerged behind their pay cut.

  1. Lack of business planning
  2. Under charging
  3. Limited sales savvy
  4. Staying stuck in the detail

 The good news is, these issues are all solvable.

1. Business plan is a must

The foundation of every successful business is a plan to grow revenues and increase profitability and to avoid a pay cut. Business plans come in all shapes and sizes. Whether you are creating a free-lancing business to give you flexibility or a large multi-national enterprise, you need a plan.

I recommend the ‘wantrepreneur’  or wannabe freelancer  to create a business plan in such a way that is appealing to them, that they will enjoy creating and will then refer back to again and again as their business grows and they learn more.

Whether you write a 30 page document, or a five slide power point presentation - it doesn't matter.

[Tweet " Make sure you answer these 3 core questions:"]

  1. Will people buy it, at the right price for you to make a profit and live comfortably
  2. How will you get many people to buy it, once and then many times over
  3. When?

Answering the first question will define the pricing strategy and thus provide foundations to be confident avoiding being one of the 68% who earns less.

2. Price has to be right

No matter what type of business you are creating, it is essential to conduct market research on pricing. You need to feel confident you are pitching at the right level, to make a profit.

Researching pricing can be more difficult for freelancers, as often fees are closely guarded. Use your best investigative talents to ask your network, put a post on LinkedIn or ask prospective clients directly.

3. Marketing planning

Closely tied in with this will be the marketing plan that will emerge from the answers to the second question. Planning the approach to launch your new service or product onto the market place, plan promotional pushes to drive client acquisition and drive sales.

Having a well defined marketing plan will give you confidence about meeting your revenue targets. Without one, you are hoping for sales.

[Tweet "Hope is not a business strategy!"]

Stepping up and running the business like a business, and creating a plan to achieve your objectives, will give you a much greater chance to avoid taking a pay cut when you crossover and start your own business or become a freelancer.

4. Don't drown in detail

Many women are reluctant to outsource or delegate routine tasks because they see a potential salary bill. There are so  many ways to outsource low value work now without hiring a permanent employee. This will give you flexibility and free up your time to generate higher revenue and to do what you are good at.

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Special offer

If you want to know more about the Essential Considerations of starting your own business:

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  • An introductory evaluation call with Wendy Kerr
  • Free 3Plus Mini-Coaching recording, Essential Considerations for Starting a Business
  • Free download of business planning templates
  • AND a special offer of 40% gift voucher giving discount for 4 coaching sessions


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Wendy Kerr Contributor
With a 20-year career in multi-national blue chip organisations, Wendy has specialised in creating and launching new businesses around the world with companies such as Apple, FT and Intuit. A Corporate Crossover herself, Wendy left her corporate career to create a successful 6 figure coaching and consulting business running it from London and Tokyo. She works with leaders of high growth, global technology companies. Clients include; Expedia, IBM, and Betfair. Wanting to change the way work works, she has also mentored and fueled over 1,500 women to create a business that allows them to live the life they love. Her company, Corporate Crossovers®, enables women wherever they are in their journey of leaving their job to start their business successfully, providing them with workshops, tools, and mentoring. She is a best selling author of two books; ‘Corporate Crossovers; when it’s time to leave the office and start your own business’, and ‘My new business; a busy women’s guide to start up success’.
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