Are you a female business owner or solopreneur? Chances are you're earning less than male entrepreneurs in your same field.
That's the result of new research by the online accounting company FreshBooks, which surveyed more than 2,700 working people in the United States, both those who worked for employers and those who were self-employed. The survey found that, on average, female entrepreneurs earn (or pay themselves) 28 percent less than their male counterparts do. And while it may be true that women often start companies in lower paid professions, such as housecleaning, catering, or child care, the earnings gap persists even when comparing male and female business owners in the same industries.
What makes these findings especially depressing is that the vast majority of women entrepreneurs--70 percent--say they went out on their own at least partly because they faced gender discrimination and the glass ceiling in their previous jobs. Almost two-thirds believe they can reach their career goals faster by working for themselves than they can as employees. And 52 percent say that reaching their full potential is just not possible if they keep working for somebody else.
In other words, most women who become entrepreneurs are well aware that persistent gender bias was holding them back as employees. But they still can't pay themselves as well as their male counterparts are.
Why not? In large part because the same gender discrimination that leads employers to pay women less and give them fewer promotions also affects women entrepreneurs' dealings with customers. One-fifth of respondents reported that they had to charge less than their male counterparts in order to attract customers. Thirty percent said they aren't taken as seriously as their male peers, and 20 percent said they have to work harder than the men in their industries. And while some might assume that women entrepreneurs earn less because they're focusing on their families, only 25 percent of respondents said this was the case.
So there's a gender pay gap in the world of entrepreneurs, just as there is in the world of employment. That really shouldn't surprise anyone, given the unequal treatment women entrepreneurs encounter in the world of venture capital. Not to mention recent research that shows unequal pay for women goes all the way back to childhood.
Although unequal pay may be an even worse problem for women entrepreneurs than it is for women employees, 78 percent of women entrepreneurs say they are happier working for themselves than they were as employees. More than 90 percent of them say they became or are becoming entrepreneurs out of choice rather than necessity. And 96 percent say they have no intention of ever working for an employer again.
Which means that women entrepreneurs should be particularly motivated to address the pay gap and gain parity with male entrepreneurs. And maybe they can. While it's surely true that customers expect self-employed women to charge less, it's also true that we perpetuate that expectation when we do so.
If you're a woman entrepreneur, you don't have to ask your boss for a raise. You're the boss and you can give it to yourself. And, though it may not be easy, you can even tell customers that you expect to be paid what you're worth. It all begins with knowing what that is.