How to Get the Best Deal for Yourself

The James Beard Foundation is committed to supporting women in the food and beverage industry, from chefs and restaurateurs to entrepreneurs dreaming up new ways to make our food system more diverse, delicious, and sustainable. Our Women’s Leadership Programs (WLP) presented by Audi, provide training at multiple stages of an individual’s career, from pitching your brand to developing a perspective and policy on human resources. As part of the Foundation’s commitment to advancing women in the industry, we’re sharing stories from female James Beard Award winners, Women’s Leadership Program alumni, and thought leaders pushing for change. Lakshmi Balachandra, an assistant professor of entrepreneurship at Babson College, taught a negotiations workshop to our fellows during this year’s Women’s Entrepreneurial Leadership program. We asked professor Balachandra to outline some of the obstacles women face when asking for capital, raises, or even trying to buy a new car. Below, she digs into the impact of implicit bias on negotiations, and offers tips to level the playing field.

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As a professor of entrepreneurship, I have been teaching and researching how entrepreneurs manage the critical moments of building their ventures. The reality is that one of the hardest aspects of anyone’s work is negotiation, but research has shown that negotiations provide greater challenges for women more so than for men. Many of these difficulties have been framed as problems or deficiencies that are just natural to women. For example, it has been shown that women launch their careers with lower salaries than men, because “women don’t ask” for more when negotiating their job offers. This suggests the problem is with the women—that they lack the skills. Sound familiar?

Women often get blamed for the structural norms and biases they encounter, but never more so than in negotiations. Even though preliminary research has said women don’t ask, more recent research has found that when women do ask, they face backlash—the Lean In idea sounds good, but if you actually do it, you might have bigger problems. There are hidden biases that women cannot ignore, and these biases do matter. We know from Kahneman and Tversky, Nobel Prize winners that the first offer made in negotiations is important. It sets the entire stage for the outcome of the deal, as the final accepted offer does not veer too much from the initial, both numerically (e.g., the actual salary figure in a job offer), and even more so in terms of final compensation packages.

One structural challenge that women face is that we know men, in particular white males, do get cheaper prices or more favorable first offers in a large swath of contexts. When it matters, women get worse deals that impact their lives in far greater ways—salary, car purchases, housing—the “big ticket” items where gender bias hurts women financially. So what can a woman do about it?

The good news is that because there is so much research that shows when and how women are disadvantaged, there are simple techniques that can prevent women from getting bad deals. Here are some tips on how to get the best deals, regardless of bias:

• Plan and Prepare: we know there is implicit bias all around us, in particular against women in leadership roles. So my suggestion for women is to plan and prepare for what you may encounter. You know that certain industries and settings will offer better prices for the “white male,” so either conduct your business anonymously online (gender-anonymously!), or conduct a lot of research ahead of time on which deals are possible in order to incorporate well-positioned “anchors” (a.k.a. the first number in a negotiation that drives the final outcome value).
• State the Facts: we know that in certain settings, like meetings with contractors, bankers, and landlords, the “white male” typically gets the best price at the outset. When you don’t have access to a white male to act as your agent, prepare yourself with “white male information”—in other words, the counteroffer. Do your homework and find out what the market price is for what you are shopping for and have your “go-to” names ready as references. For example, in salary negotiations, you can lean on personal scenarios like “my classmate Steve from culinary school is earning XX in the same level position at So-and-So restaurant.” Or “I know from my friend Andy that Larry from Fancy Plates is currently offering Y and Z as part of the starting package.” That way it becomes less about what you’re asking for as a woman, because you have reframed your position in terms of the compensation other men are receiving within similar scenarios. This takes some research, and a demeanor where you calmly present the data with an “I’m merely stating facts” approach that may require practice. But in the end, practice will make for the perfect deal.
• Use Your Resources: think about how you can avoid the disadvantage of implicit bias towards women altogether. A great example of this is when a very successful and rich female CEO wanted to buy a Ferrari. Instead of going into the dealer to undoubtedly face bias, she simply called around. Work alternatives against each other so that you don’t get taken advantage of—either by wasting your time at the car dealership or by facing the emotional stress of getting a bad deal. My father, a business professor, was fuming when a car dealer offered him ridiculously expensive financing terms. He said, “do you think I’m stupid?!” and stormed out. Don’t try to re-educate—just get the best deal and move on.

The reality is that before women enter into negotiations, they need to step back and consider how bias may influence their outcomes and plan for them. Women may avoid negotiating because it is perceived as “masculine,” and could potentially result in retaliation for not being “true” to their gender role. But by not negotiating, women end up contributing to the wage gap: lower salaries over their careers relative to men. Taking seemingly small differences can lead to profound divergences over time. Opportunities to negotiate are plentiful, and it is worth it for you to “ask” and negotiate, in the right way. The next time you go to negotiate, remember these suggestions and get the best deal for yourself.

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Lakshmi Balachandra is an assistant professor of entrepreneurship at Babson College. In addition to way too many academic degrees, she has been an entrepreneur, a venture capitalist and a stand-up comedian. Follow her at @proflb.

The JBF Women’s Leadership Programs are presented by Audi.