How women can avoid a pay cut when they start their own business
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.
- Lack of business planning
- Under charging
- Limited sales savvy
- 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:"]
- Will people buy it, at the right price for you to make a profit and live comfortably
- How will you get many people to buy it, once and then many times over
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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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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