The True Cost of Working for Free

Protecting Yourself and Your Business

“Working for free while they get to know you.”

Does this phrase ring a bell for you? Every time I hear it, something stirs inside me. When you go to a new store to buy gourmet seed bread, don’t you pay the vendor? Why do services start off free and products not?

Here, I would like to explain why I think you should always charge for your services and how to protect your business from going bankrupt.

1. Define your infrangible limits: “Working for free?”

If you don’t value yourself and don’t set certain limits, nobody will do it for you. Before accepting any job, give yourself time to evaluate it and decide if you want to pursue it. It is possible that you don’t feel comfortable with it because you don’t feel valued or you simply dislike the client.

Evaluate what the relationship with this client would be like in the near future if it didn’t go well first thing in the morning. Think about what would happen if your services meet their expectations and if they don’t:

  • What would be the impact on your company?
  • Would it affect negatively because the client is someone important in the business world and they can speak negatively about you?

Also, think about how this job would affect you?

  • Is it a project that will consume all your time and therefore you cannot work for others during its duration?
  • Would you have time for your family, time for yourself?

2. If you work for free, you may close soon

Even if you are working for someone else and in your free time you do freelance projects, they must pay you. Perhaps you may be interested in making offers initially for early payment (I reflect on that in point 4), but not working for free.

I have witnessed many entrepreneurs falling into despair after a few months of working for free while their business “took off.” Well, finally their business gets closed.

Don’t be one of them and value yourself from the beginning!

3. Provide support and guidance

If your job involves dealing directly with people, your business cannot progress if you offer your services for free. What you can offer at least initially is a free clarification or consultation. You decide how long it can be, for example, 10 minutes, 30 minutes, 1 hour of your time.

You decide if it is by videoconference, by phone or just by email. I recommend that you also determine in what period you will answer the queries if it is via email.

In this way, you empathize with your future clients and show yourself accessible. They have some contact with you beforehand and can decide whether to contract your paid services afterwards.

4. Develop a pricing strategy

As I mentioned, you should always charge, but there are also formulas so that the client “hurts” less to pay for your services. It’s a concept Dan Ariely explains in one of his books I’ve recently read.

I basically propose three that I have used in my business:

  • Payment in advance and a 10% or maximum 15% discount — you ensure the payment and work more relaxed. Here, be careful because it is a double-edged sword! The client believes, even if that is subconsciously, that since they have paid, you must deliver the work to him by yesterday. Set the delivery deadlines well in your contract and stick to them!
  • Payment of 50% before starting the project, and the other half when you are already at 50% compliance — you ensure the payment at the beginning, although it is more risky than in the first case. Include a clause in the contract about a 5% surcharge if the second payment isn’t met.
  • One hour of free consultation — here you are not paid in advance, but the client is more relaxed and less demanding. You have the opportunity to get to know them and decide if you want to work with them. I have used this last option when the doubt arises as to whether it is worth it. It has happened to me especially with large companies with which I would have more problems if the work was not executed as they require. In that case, many times the question of payment is almost not a problem, rather the consequences of working with this company.

5. Learn to say “No” at the right time

Suppose you have already started a project to which you have committed yourself. Of course you want to give a good image of a person who keeps his word. Then you have no other option but to comply.

It is better to be faithful to your principles and that the client doesn’t feel that at the first obstacle, you want to leave them with the excuse that “you work for free”.

In my opinion, it’s essential you treat your business affairs as an entrepreneur, not as a friend. In other words, when a friend is interested in what I do because they want to hire me, I tell them I don’t work with friends.

If it is a job that I can do and I see it is not something that will take up a lot of time, I will do it myself for free. But in these matters I never ask for money, because my personal experience is that money and friendships go badly.

I prefer to do something without getting paid for a friend, to getting paid and for them to keep that “pain” of the payment that Dan Ariely talks about in one of his books.

However, when a client impertinently asks me why I don’t give them a no-cost month, I also jokingly answer I have the bad habit of eating every day.

Working for free?

In short, perhaps I am very drastic in my criteria, I don’t know. I am eager to find out if your views coincide with mine. Please, leave me a comment if you have had doubts with a client or friend about what to do. This would allow me to broaden my point of view.

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