6 Reasons Why You Shouldn’t Work for Free
Many people when they first launch a service business are tempted to offer their services for free to gain experience and build a customer base. I believe this is a false economy and doesn’t help you do either. Here are six reasons why you should never work for free.
Your performance will not be the same if you are doing a ‘freebie’. There’s a certain pressure and expectation that you put on yourself to perform well when someone is paying you hard cash for your service. However much you try, you will not perform the same if you’re not being paid. You may also resent the fact you’re not being paid and subconsciously underperform, thus damaging your reputation and business.
Charge your clients what you are worth and perform to the standard required to earn your fee.
2. Client Attraction
As a small business you want to attract lots of loyal clients who are happy and willing to pay the fee for your service. If you begin your fledgling business by offering free services you will attract clients who are always looking for free deals or a cheaper service. These clients are bad for business, it will be difficult to turn a profit if your entire client base is focused on driving down your prices.
If you must, offer an introductory deal eg 25% off. This should be limited to the first experience of your service only. The introductory deal should entice good clients to give you a go, but crucially, not be cheap enough to make people thing you’re not confident at what you do or that you’re the cheap option.
An introductory deal should only be in place until your customer base is large enough to sustain your business.
An important part of starting your own business is gaining experience. If you offer your services free of charge then you’re missing out on the experience of invoicing, payment processing, chasing late payments etc. It’s important you charge people so that you gain this experience quickly while you have just a few clients. You want to develop your systems as quickly as possible and certainly before you have a larger client base.
4. Customer Value
It’s important as a small business wishing to turn a profit that you aren’t seen as the cheap option. If you offer your services for free your potential clients may draw many conclusions from this; they may think you lack skills, they may think you offer poor service and can only get clients by charging nothing. By offering your services for free you may well be turning away the exact type of clients you want, the ones who value someone who can do a job well.
You can’t run a business and sustain yourself with fresh air. Your business urgently needs cashflow, which is why it’s imperative you charge for your services from the beginning. By not charging you will be spending hours of your time working for free, you will have no money to re-invest and nothing to show for your efforts. You will quickly become despondent and probably give up – nobody wants to work for nothing. Charge for your services to ensure your future success.
6. The Market
As a new business you have become part of the market for that particular service. Every time someone offers the service for free or at a heavily discounted rate it drives the ‘going rate’ for that service down. You don’t want to become a part of a market where consumers expect rock bottom prices, nobody in your market can survive in this scenario. Charge reasonably for your services to support your market and your own future success.
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