Thank the heavens, Richard Florida has just released an update to his foundational book, The Rise of the Creative Class.
Not so thankfully, Florida’s research shows that women earn about 40% less than men do in creative class employment.
In my own research, 32.6% of men surveyed earned more than $75,000 per year in their small businesses compared to only 10.6% of women.
I’m sure that many of the cliche reasons for the gender wage gap apply to creative class employment – possibly better than they do for employment as a whole. Women choose creative class employment because it’s flexible, they can work from home, they can work for themselves. They can take a break for children and they can support their partners.
Yawn.
While these may be reasons that women have traditionally earned less than men over time, they are not the reason you are earning less.
You are earning less because your business model is not set up to earn more.
Here’s what men know that women don’t know:
It’s easier to earn the second $50,000 than it is to earn the first $50,000.
In other words, once you’ve earned $50,000, there’s no reason you shouldn’t be earning 6-figures. The difference is that earning 6-figures generally requires leveraging your earning. It means no longer trading time for money. It means understanding what parts of your business can be duplicated over & over again with almost zero effort. It means finding a tipping point again, and again, and again.
Women don’t need to give up flexible hours or time with kids. They need to embrace better business models that are based on value & results, not time & energy.
Women seem to prefer relational transactions. Men seem to prefer transactional relationships.
Go figure.
Relational transactions happen most often in project-based or one-to-one client scenarios. The easy way to develop a relationship is with time, exchange, and getting-to-know-ya. You put your whole heart & soul into the process. Those relationships turn towards a transaction when you have something that fills a need for the other person.
It’s a feel good way to do business. But it’s a slow process. Each customer represents hours of time, loads of money (don’t think your social media use & Skype coffee dates aren’t costing you), and emotional stress waiting for those relationships to convert.
On the other hand, transactional relationships come fast & furious. They utilize scale to generate the revenue that’s needed in the business. Transactional relationships are built on acute needs & impulse purchases.
The difficulty with this model is that it’s difficult to achieve customer loyalty. Once a solution is purchased, there’s often no word from the customer to find out if it’s working or not. And this type of business might leave you scratching your head, wanting more.
You Economy businesses thrive when they find the sweet spot between transactional relationships & relational transactions.
In this sweet spot, customers are directed through an experience of a business that creates a personal investment. They understand that you are doing business with them in mind, that your business is geared to their success, and that you have a vision for how their lives can be better.
Customers are interested in the content you’ve created: articles, audios, videos, images. They devour it. They want more. They interact with you on social media, they hang out at your store, they talk about your products with their friends.
And you listen.
And listen.
And listen.
That’s the secret of a great relationship, right? It’s listening instead of talking. While you’re listening, it’s your job to discern what your new friends are saying. What is troubling them? What is confusing them? How are they feeling? What are they thinking?
Look for the patterns.
The money is in the patterns.
When more than a few people say the same thing over & over again, you’ve got a pattern and an opportunity.
A smart You Economy business will take that pattern and create a solution for it.
When that solution turns out to be the killer app for the pattern your friends are experiencing, they feel like you created it just for them. They feel heard, witnessed, nurtured.
But instead of selling it once, you’ve sold it 100 times.
Leveraged income isn’t outside the customer relationship cycle. It’s an integral part of it. You don’t develop leveraged income opportunities to generate money where before there was none. You develop leveraged income opportunities to solve problems for people you care about, over & over & over again.
If you’re making $10k, $20k, even $50k per year, you’re already solving problems for people one at a time. To make the jump to your dream income, your goal is to solve problems for people 10, 100, even 1000 people at a time.
As an example, I’ve created systems for listening to my new friends all over my business. One pattern that emerged was people asking for new ways to “get the word out” to potential customers. I could wait for these people to come to me as individual business strategy clients. I could have tweaked my services copy entice people based on this need.
Instead, I created a solution, called Marketing ReWired, that solves the problem for my friends over & over again. As a result, it costs less too. And they get the benefit of working through the program with their friends & colleagues.
I could have a business based exclusively on one-on-one business strategy clients. But it would be an average income at best. Instead, I have a business that’s based on creating leveraged solutions to problems that has already generated $100k in sales this year.
Don’t fight your desire to forge & foster relationships with your potential customers. Just realize that you can serve more than one person at a time. In fact, you owe it to your customers to do just that.
"wonderful blend of heart and soul
Kick Start Labs is a New Economy microbusiness community. 
Imagine your business at the next level of success. Insight Intensives are for coaches, authors, designers, and others. 
Startups: turn your big ideas into profitable business models & compelling outreach. Email us to learn more: general@taragentile.com.
"The
RT @taragentile: Women are earning 40% less than men in Creative Class jobs. Here’s my theory & a solution: http://t.co/gljjJ53p
What Men Get that Women Don’t: The Gender Wage Gap in the Creative Class: http://t.co/DvAOapyf
RT @skooloflife: What Men Get that Women Don’t: The Gender Wage Gap in the Creative Class http://t.co/9YYCbYDK (another brilliant article by @taragentile)
What a fantastic article Tara!
I’m going through this in my business as well. As a bookkeeper, I’m working on leveraging my skills to reach a broader audience, in addition to the tradtional one-on-one service model (which I do as my core business). It’s not very common in my industry, which is why I think alot of people in my business never get to the income they want.
You really painted that picture perfectly and reinforced that point.
Thank you!
Susan
It seems to me, and this is a very subjective impression, that most business coaching/counseling aimed at women assumes they are starting or growing small, locally-based service businesses. How and where can I find woman-oriented information on starting a scalable business from the get-go that is *not* a service business? Say I want to start a blog, create information products and build a platform/audience/email list. How do I do that without any one-on-one clients? How do I see “patterns” when I don’t have an audience yet? What type of business do you start when you don’t already have a business, and you don’t want to get locked into a non-scalable service business model?
Vicki that’s a great question! The short answer is that you need to be in business to be in business. You have to hang your shingle first, and if that means the only thing you can offer before you can create products is a service, that’s not a bad thing. It’s a bit of a bootstrapping process, but working with 1 on 1 clients is great to build up your skillset and fine tune your upcoming products to something people will actually want and need from you.
Hope that helps!
Well said Nathalie.
It’s also a lot easier to create a product for people when you know exactly what they want.
Tara, you are amazing! You read my mind and articulate what I can’t manage to say myself. This is exactly where I am in my business at the moment – not because I’ve hit the first $50,000, but because I’ve become unwell and need to turn away from the one-to-one single sale client based model I’ve built and go into a more leveraged way of earning. I have some ideas and some opportunities that I know I should pursue but I’ve been a little lax… so thanks for the realism, the kick in the butt and the encouragement
x Virginia
RT @taragentile: 40% — that’s how much LESS women are earning than men in the creative class. Here’s how to fix it: http://t.co/D7i24kc0
This was excellent. And tragic. It’s sad that men are missing out on the relationships & women are missing out on the money. With obvious exceptions of course. I like that you’re an advocate for the sweet spot. I see too many people take an all or nothing approach and it’s just not right! I’m all about sweet spots.
Tara, every word you put out into the world I literally devour but this is so on point for me. In the architecture and design world it is sooo relational (whether you’re a male or female designer). You spend so much time ‘courting’ clients and just waiting to hope they pick you. I turned away from my own industry long ago and stopped trying to find a business model there that would work for what I was looking for. I haven’t found my sweet spot yet, but I feel like I am getting closer to actually know what I am looking for, or at least knowing that I am heading in the right direction and most importantly that what I am looking for (flexibility, residual income, leveraged income, my own set of rules, my own way) is out there and attainable and that I’m not crazy. Thank you for sharing your brilliance!
I recently heard Richard Florida speak as the keynote speaker at the Society of the Arts in Healthcare annual meeting in Detroit. Captivating. As is what you wrote here. Hearing you speak at the UncommonGoods Branding Seminar last Tuesday changed my mindset. And each blog post makes me think about what I am doing a little differently. Thank you Tara!
Colleen
Whooooa, THANK YOU Tara! This is article is gold. You know when you have that realization that you’ve totally heard this before but suddenly you actually “get it”? Yeah, that’s what just happened to me – particularly around “creating systems to listen” to my audience, friends, clients, strangers… Perfect!
I totally agree Tara – the second $50K is much easier, and so is the second $100k too! I can also see the ways that I kept myself in the relational business models as opposed to transactional ones. One is not better than the other, because I love my 1 on 1 consulting clients. But if we can help more people without products, then all the better!
What Men Get that Women Don’t: The Gender Wage Gap in the Creative Class http://t.co/Uqx6xHqp
If the title pisses you off, good. The gender wage gap in the creative class pisses me off: http://t.co/D7i24kc0
RT @taragentile: If the title pisses you off, good. The gender wage gap in the creative class pisses me off: http://t.co/TZokDY3C
I really like how you’ve put this, Tara. I don’t have kids, but still one of the top reasons I wanted to work for myself was the flexibility (and the not having to wear shoes). And that was exactly why I rebelled against creating products for such a long time. I loved all of the newness in my business and the idea that I was working for so many different types of clients and the products I put together, though they’ve been successful and well-received, have always felt a little rote to me.
One way that I handled the money gap was to create a one-on-one consulting program. It’s high-end, easy to market, and really valuable to my clients, so it lets me keep the flexibility I crave and also means I was able to break thru that six figure barrier.
That said, it’s still a trading time for money proposition and I’ve been playing with a new group program so that I can add more leverage–I think I’ve gotten it right in the sweet spot of something I’ll enjoy offering again and again. Looking at the conversation as not having to be relationships vs transactions really helps me see where this program fits in to what I’m building in my business. Thanks!
What men know that women don’t: you’re earning less b/c your business model is not set up to earn more. RT@taragentile http://t.co/9D7KtuEo
What Men Get that Women Don’t: The Gender Wage Gap in the Creative Class http://t.co/widRkOet @taragentile <<Dead on
What Men Get that Women Don’t: The Gender Wage Gap in the Creative Class http://t.co/XG666StD
What Men Get that Women Don’t: The Gender Wage Gap in the Creative Class: http://t.co/TTNQDkrY
Women earn about 40% less than men do in creative class employment What a surprise! Read on: http://t.co/DihpjiOA #creativity #women #gender
Great post from @taragentile What Men Get that Women Don’t: The Gender Wage Gap in the Creative Class: http://t.co/6PE6Mzsu
An important post because it highlights this;
“Just realize that you can serve more than one person at a time. In fact, you owe it to your customers to do just that.”
Nice work Tara!
Tara’s insights, her desire to share topics that help ones growth “almost” spell bounds me.
Her content strategy “rocks”
This post IS spot on!
The one component that gets over looked the most (my opinion) is that no matter how many “how to’s” one knows, it’s the heart and soul that will breath life in a business AND is the only thing that will sustain it for the long haul. One must feel in their heart and soul to want what is best not just for themselves but for their customers.
RT @taragentile: Women are earning 40% less than men in Creative Class jobs. Here’s my theory & a solution: http://t.co/gljjJ53p
I declare independence from business models that don’t work! http://t.co/Zx8zhhIH #creativeclass
RT @taragentile: I declare independence from business models that don’t work! http://t.co/Zx8zhhIH #creativeclass
RT @taragentile: I declare independence from business models that don’t work! http://t.co/6ogqN5K7 #creativeclass
RT @taragentile: I declare independence from business models that don’t work! http://t.co/Zx8zhhIH #creativeclass
RT @taragentile: Declare independence from business models that don’t work! http://t.co/oAejiC0k #creativeclass
What Men Get that Women Don’t: The Gender Wage Gap in the Creative Class: http://t.co/kog9SPoT
Thanks to Celina for posting this… thought that I would share that link here too…
http://t.co/rb6bOWg8
[...] nearly two weeks, I’ve been writing in response to Tara Gentile’s post- The Creative Class Wage Gap, it talks about the difference in how men and women prefer to be in business, and how one model is [...]
What a great article, Tara! Sweetspot between transactional relationships and relational transactions…love it! I hope every woman entrepreneur reads this. Thank!