“Risk-averse.” “Mompreneur.” “Lipstick entrepreneur.” These are some of the labels many entrepreneurial women have had to shake before being taken seriously as investors.
Financial advisors would be wise to cast aside these assumptions if they expect to gain female entrepreneurs as clients. Female business owners control about 47% of Canada’s 1.6 million small- and medium-sized businesses, according to Industry Canada.
Women entrepreneurs may perceive risk differently from men, but don’t presume they’re risk-averse, says Sherri Munro, president of Munro Consulting Services Inc. in Toronto. They are actually risk-aware. And their appetite for risk is tied to how confident they feel about making financial decisions, she adds.
“As their confidence builds, where the role of advisor would come,” Munro says, “is to help increase that level of confidence to make appropriate decisions,”
Here are five ways you can successfully work with female entrepreneurs:
1. Take a relationship-based approach
Generally, it takes time to earn a client’s trust. And women particularly value the relationship side of the business equation.
“Women want to build that personal relationship,” Munro says. “They want to start earlier in the process. They’re not separating the two.”
And don’t expect to convert female business owners based on just one meeting. They need to be convinced that you have their best interests in mind.
“The industry is built on financial advisors hunting for business,” says Judy Paradi, consultant with Strategy Marketing in Toronto. “With women, it’s far more like the analogy of gardening. You need to nurture that relationship.”
2. Listen before advising
One major source of frustration for women, say Paradi and her business partner, Paulette Filion, is advisors who are tone deaf about what matters to them.
“You’d be surprised at all the horror stories where they’re basically ignored in the conversation,” Filion says.
This problem can be avoided simply by hearing what’s important to your prospective client and how the business fits into her life.
3. Pick a slice of the market
While you don’t want to limit the pool of prospects, setting your sights on specific industries will help bolster your credibility. The niche you choose must to be one that you can relate to on a personal level, Filion says.
For example, you might decide to focus solely on female restaurateurs, perhaps because your family owns a restaurant. Personal history can give you much-needed insights to win over clients.
“When you meet these women in that market,” Filion says, “you can actually show you understand the challenges and the issues they face as business owners.”
4. Help build her support network
Referrals shouldn’t be a one-sided affair. Leverage your own professional network to help her grow her business and to connect her with like-minded individuals.
“Although there are a variety of ways to tap into capital, you need to understand what those options are for that business,” Filion says. “You can put her in touch with a banker, a lawyer or a venture capitalist — whatever options are available.”
5. Speak plainly
Avoid jargon. Rather than making you sound like a skilled communicator, arcane buzzwords make you seem less trustworthy, Filion says.
“[Women clients] don’t feel respected when you use jargon,” Paradi adds. “All it does is make them feel you have no sense of who they are.”
Use plain language that communicates how your financial advice relates to her business and her work/life balance.
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