Business Tip for Culture Makers 611: Stop Charging Extra for Payment Plans and Do This Instead
Fact: most women entrepreneurs are significantly undercapitalized. Only 16% of small business loans go to women entrepreneurs and less than 2.2% of Venture Capital goes to women founders. The inequity experienced by women entrepreneurs who are black and brown is even more pronounced. Only 0.32% of all venture capital raised since 2009 went to Latinx women entrepreneurs and only 0.06% of it venture capital went to black women entrepreneurs.
Because women founders and entrepreneurs with non-dominant identities don’t have access to capital or credit they need to grow their companies, they’re usually bootstrapping their business growth out of cash flow.
I believe that’s one of the reasons women entrepreneurs often charge extra for accessing payment plans.
Basically, they’re trying to incentivize their clients to pay in full, **because the undercapitalized women entrepreneurs often urgently need cash infusions to cover their pre-launch costs**.
That’s a systemic gender issue, and a real one.
IN ADDITION, we’re taught to do this. Many women’s business coaches and online business academies teach women entrepreneurs to automatically charge a 25% or more as a fee for accessing payment plans so that it becomes an additional profit centre in their businesses.
It’s become a norm in online spaces to see SIGNIFICANT markups for payment plans.
In other words: Got less money than some of your counterparts? PAY MORE.
Although part of this is being framed up for us by an unjust system, it’s still a bullshit predatory tactic. It’s reproducing and downloading our own oppression onto our clients — other women!!! — instead of dismantling it.
But it doesn’t have to be this way. We can create a new norm in our industries using our own business practices.
Here’s one alternative way to navigate the tension between being undercapitalized and needing full-payment cash infusions without reproducing oppression and being predatory:
On your sales page, tell your clients the truth.
And trust them.
[SWIPE COPY] Tell them something like:
As a woman entrepreneur I am undercapitalized. That means I’m self-financing and bootstrapping my program startup expenses out of cashflow…so if you can afford to pay in full, I’d really appreciate it if you did that. SOLIDARITY.
Those of your culture-making, community-minded clients who can afford to support you with a full payment WILL show up for you.
Because it’s an investment in you and our shared community.
It’s also an investment in ethical launch norms.
And it’s a way we can collectively start to dismantle the bullshit predatory norm of charging 25% or more for accessing payment plans to the people least able to bear that cost.