How to deal with potential clients (and yourself!) when they ask you to work for free.
You will get asked to work for free (or with a heavy discount/doing it for cost price)! Especially when your work is time-based and you sell to businesses.
Giving a quick workshop for free at a conference. Playing music/DJ-ing/taking pictures at an event. Wanting to try your service for free before they can make a decision. Coming in for a meeting to brainstorm ideas.
Or, slightly more 'normal' business practices like the 'opportunity' to pitch a proposal. Or the competition (tenders, 99designs, Designcrowd) where 1 designer will get the job. When you think about it, these are not too different. All work where the meter doesn't start running after you get the job and will result in a lot of wasted time for everyone else.
The reason for the business is clear. It saves them money or reduces the risk that they make the wrong hire.
The freelancer/entrepreneur gets tempted to agree when his paid work is hard to come by. Especially freelancers that are just starting out can reason that they are just beginning and need to pay their dues. That pension is a problem for tomorrow. And that they don't need as much revenue to survive (since their personal costs haven't gone up yet and they don't really pay much in taxes).
But on a system's level, by playing this game, the sector you're in gets less and less valuable (Tragedy of the Commons). It creates a race to the bottom where all freelancers compete with each other on price. Companies get the perception that freelancers are cheap. And before you know it, it's the new norm. It's become ok.
So, it's clear there are problems with this phenomenon. What to do about it? In this piece I explain:
- When working for free is ok and when it's not,
- What arguments business will use to get you to work for free,
- And what arguments YOU will use to avoid asking for money.
When it's ok to work for free
The case for doing work for free is surprisingly simple.
Only work absolutely free when you want to give that person or organisation a gift.
For example to help a friend start up her business. Or because you want to contribute to a good cause. Or you're giving back to the system that's given you so much.
It's perfectly ok to give work away for free. And even before your "made it moment". It actually should start before. If you don't give then, you won't later (also because the "made it moment" doesn't exist).
With absolutely free, I don't just mean that your client doesn't pay you for your work. But that they also don't offer you any other compensation in return.
Because besides money, there are resources that can be valuable to you and can make for a valid exchange. They are: expertise, referrals, introductions, pr, attention and trust.
The first 4 are obvious. The last two - attention and trust - are resources that become scarcer and scarcer and more and more valuable in the connection economy. You are - as you're reading this - 'paying' me with your attention. And, hopefully, if you like this, 'pay' me with your trust.
All are, in one way or another, means to future revenue. So, the question you need to ask before accepting is: How can doing this gig bring down my cost of acquisition of future clients?
So, when doing work for free for a company that itself has the goal to make money, something has to come back to you that aligns with your goals. The deal that you agree to has to benefit you both.
And moreover, it's not unreasonable for you to make the deal contingent on your client helping you with getting new future clients. For example, that the deal includes recommending you and your product to 3 business associates.
Now, maybe this sound transactional and overly money-focused to you. The sole reason for working shouldn't be money, right? I agree. It's far from the only reason. You do, however, need to figure out the money-part of the game too.
Arguments you will be presented with to work for free
"It will great for your portfolio." Ah great, portfolio. We all need some proof for future clients so that they'll trust that you will deliver value.
The best portfolio is ánd real work ánd precisely what you want to be known for. So, when this is the proposal, will you get full creative freedom, so you can create the work you want to be known for? And will they help you share that work - with your name on it - with their network?
"We don't have money to pay for it." First of all, usually the one saying that himself is actually collecting a salary. So then, "no money" is not technically true. They lack to will to take a pay-cut themselves by redistributing the budget over all the involved parties.
Second of all, that's still no reason why you should do the work. So, go back to the list of resources and see what they could help you with.
"There is more work on the horizon." Ok, can we already include that soon-to-come-work in the contract? Or, can we figure out a way that we'll share the risk?
"When next time we'll have increased our budget, we'll pay you your full fee." Ah, next time. But when they do get the budget, don't you think they'll again try to maximise their value by again getting higher prices competitor to take a discount? Your $500 client won't be your $5000 client.
"It will lead to more clients." Ok great! How many people are they going to introduce, connect and recommend you to? What is it they could do to help you with? Do you need exposure? Recommendations? Introduction? If the reason you accept work without pay is more clients, agree on what their part in this effort will be and be very specific.
"It's a great learning opportunity." Practice and learning are important, so this could be a valid reason. It has to be helping you develop something that you want to develop in though. And, what is the client going to do to help you learn the most you can? Are you allowed to run experiments? Will they give you and help you collect feedback?
And, most likely, even when you practice, you'll deliver value. So, what can they do to balance the scale a bit more?
"It will be great working with me. I'll teach you so much." Great. Will one of the lessons be how to get people to do your work for free? I'm sure you know a lot, but creating a solid business case where you've figured out how to budget for all the costs properly isn't one of them.
Ok, super snark-alert. Seriously, when starting out, it can be extremely valuable to have these mentor relations. But, make sure you've got clear what it is you want to learn from the person.
Again, it can be great to do work for free, but be sure the be conscious about the fact that you're giving it away then.
Arguments you'll present to yourself to work for free.
"It's for a friend." I get it, you don't want to ask friends for money. But your friend will most likely love giving it to you. Or, she will love helping you out in other ways with what you need instead.
"But I get so much joy out of doing it." That's a great reason if it's your hobby and you don't do it professionally. And, it's not like you should pay a tax for doing work you love. The reason that lawyers get paid so much is not because they hate their work.
"I'm not doing anything that day anyway." Well, there is already so much wrong with that in itself. You should have a plan for what you need to be doing with your time. Whether it's doing work to get new clients or enjoy doing nothing. The question should be whether or not it's a better use of your time.
"I feel bad extracting money from them." But you are not extracting value. Your work is ADDING value! You must believe that what you offer is actually worth more to them than what you ask for it.
Not getting money is depriving your business of getting the life-blood it needs to exist. That means that not asking money is preventing you from helping someone else!
"Maybe the price is too high." A price is whatever your client agrees upon. 1 person agrees and it was the right price. There is no set price that something has to cost. There are no shoulds. There are simply conventions or anchored numbers/levels of price.
"Serendipity! It will come back to me." It may sound like I'm super business-like and transactional about this. But, I do believe that when you put good work out in the world, it will come back to you. However, that doesn't mean you can't still be smart about it and help serendipity along!
Thanks for reading!
I hope this helps you. If so, hitting that heart button or sharing really helps others find this piece too.
I'd love to hear how you've changed your proposal and what the outcome was! So please leave a comment!
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Want to really get to work on this with me? September 22nd I'll give a Private Masterclass Strategically Sound. Master your business model, your financial flows, your sales funnel, plan properly for your next quarters, and more. You and just 5 other freelancers/entrepreneurs will go on a deep dive with me to build up a sound strategy for your business.