The Confidence Tax: How Imposter Syndrome Costs Women Business Owners Money (And How to Stop Paying It)

June 9th 2025

Despite all you’ve accomplished, there are probably days when you’ve questioned whether you’re qualified to run your company; someone else could probably do a better job, you tell yourself. 

Imposter syndrome comes on strong. You begin to second-guess your decisions, become pessimistic about a new opportunity you’re considering pursuing, and feel anxious about your company’s long-term prospects.

Every time you allow these thoughts and feelings of self-doubt to surface, you’re costing yourself money. I’m talking real money.

You’ve just experienced the confidence tax, which is the calculated cost of declining opportunities, underpricing your services, and not pushing for all you should in negotiations, says a Psychology Today article. The authors explain, “This invisible tax on confidence erodes self-assurance, slows career progression, creates a scarcity mindset, and reinforces gender inequities in leadership and pay.”

As a woman business owner, you’re probably not even aware that you’re paying this tax. But it is time to stop it, with some specific strategies and tactics you can use to keep more of your hard-earned cash for yourself.

The Real Cost of Self-Doubt 

Self-doubt isn’t just something you experience in your head or your gut; your bank account feels it, too. The three biggest penalties you’re paying are:

Underpricing Services and Products

A FreshBooks study a few years ago reported that women entrepreneurs believe they need to price their services below other businesses in order to win the work. This strategy helps explain why male entrepreneurs outearn female entrepreneurs by 28%.

Women aren’t charging enough. They’re not charging what they’re worth.

Instead, they frequently charge less than market rates because they believe customers won’t pay more. That belief or assumption isn’t based on research, of course. In some cases, women add on free products and services to be helpful, thereby reducing their own profits.

Weak Negotiation Outcomes

Women have a tendency not to want to rock the boat for fear of having opportunities rescinded. This helps explain why 32% of women don’t attempt to negotiate their first job offer, according to Glassdoor Economic Research, when a majority of men do. So, they accept that first salary offer and end up on the lower end of the salary spectrum.

Due to self-doubt, women entrepreneurs also feel the need to over-deliver on services, to be sure their customer feels they got what they paid for. In going overboard to prove their worth, they reduce the amount their business can earn.

Missed Growth Opportunities

Lack of confidence can cause women business owners to hold back on applying for new opportunities. This can include everything from submitting business proposals, grant applications, or award nominations.

Where women are under the impression that they are unqualified if they don’t meet nearly every requirement, men are comfortable throwing their hat in the ring if they only meet 50%. Women need to stop holding themselves back.

Saying “no” to opportunities because they don’t think they’re ready or qualified prevents growth. After all, what’s the worst that can happen if you apply? You might hear a “no.”

On the other hand, hearing a “yes” could be transformative for your company. Not applying is costing you money.

Recognizing When You’re Paying the Confidence Tax 

Now that you know that you’re likely paying the Confidence Tax, here are some ways to spot when self-doubt is creeping in.

Red Flag Phrases and Thoughts:

When you hear your inner dialogue telling you things like these, you’re preventing yourself from pursuing new opportunities and charging what you should:

• “I don’t think I’m qualified yet for that.”
• “They probably won’t pay that much.”
• “I’ll start low and can raise my prices later.”
• “Maybe when I’m more qualified/have a few more years of experience.”

Try to stop those thoughts from emerging and talk back with reminders of your skills and abilities:

• “I can give it a try and see what happens.”
• “I’m worth at least that much.”
• “If they say no, I’ll just go on to the next prospect.”
• “There’s no hurt in trying.”

Behavioral Warning Signs:

Besides those conversations you have with yourself, watch for how you react to opportunities. Ways that you could be self-sabotaging include:

• Stating your fee and then immediately offering a discount or payment plan to fill the silence
• Procrastinating by over researching opportunities, often to the point that you miss an important deadline
• Constantly comparing yourself to colleagues or competitors and feeling less than
• Scheduling several follow up consultations with prospects in order to demonstrate your expertise; you can go overboard with free consulting this way

When you realize that you’re giving away too much of your time or expertise, practice scripts you can use to stop yourself from overpromising before the words leave your mouth.

Also consider creating a file of compliments you receive that you can refer back to when you’re questioning your skills. Putting those types of kudos in front of you on a bulletin board is an even better approach, for constant reminders.

And take time to check how your prices stand up. Are you at market rate, below it, or above? If you discover that you’re undercharging, push yourself to raise your rates and stick to them.

Regular self-assessments can help reframe your self-image and bolster your self-confidence. Your experience and talents have value that you deserve to be paid for.

Make that your mantra.

By charging what you’re worth, you’ll reduce that Confidence Tax and add dollars to your bank account.