When people start out in business or as a freelancer, they often find their initial clients are friends or family, or someone they know. This is a great way to build up an initial client base, confidence, and start word of mouth.
But, more often than not, those friends and family will expect you to work at mates rates.
This can pose some problems. It can blur the lines between business and pleasure and although they’ll spread the word, this will likely be done at your discount price.
I’ve experienced it myself – happily offering a cheaper rate to friends but then finding the people they recommend me to expecting me to work at the same price for them. Awkward to say the least and it really devalues your work.
If you’re worried this will happen to you, or you’re just struggling to price your services for your mates, here’s how to charge friends and family for your work:
1. Create a rate sheet (if you haven’t already)
Even if your work is bespoke and you have to price on a case by case basis, it’s still worth having a price sheet with rates from £xx. Outline your key services, typical rates and pop a disclosure at the bottom to let people know that additional services or bespoke quotes may vary in price.
2. Send them your rate sheet, with a clear discount for friends and family
When a friend or family member asks if you can help them out, send them the rate sheet as an aside the % discount you offer to immediate friends and family.
I would recommend between 10-20% is fair, but ensure you’re still making a profit and you’re not having to sacrifice higher paid work to take it on. If you’re fully booked and at capacity, it’s okay to say so, and that if they want to book you in quickly, that they’ll have to pay full rate.
Whatever you do, don’t turn a fully paying client down in favour of mates rates work. It’ll breed resentment.
3. Tell them this discount is only for immediate family and friends
If they recommend you to anyone, (and hopefully they will) ask them to send your rate sheet on and stress that you can only offer the discount to close friends and family, so to keep it to themselves. You’ve got to earn a living, and they should respect that.
If you do find a recommendation comes through asking for the same discount, you can politely let them know that it’s only available for immediate family and friends and re-send your current rate card to them.
4. Set up a contract and agree terms, just as you would with any other client
Just because you’re doing work for a friend or family, don’t let the boundaries slip. Agree terms up front and get them to sign a contract. This will cover you if they want something out of the scope of what you’ve agreed.
It also lets them know that although you’re giving them a discount, you’re treating them like you would any other client. It’s all about boundaries!
Finally, you may not actually want to give your friends and family a discount, and that’s understandable. Or, you might want to help them out for free. It ultimately comes down to personal choice. But do remember, a business is only a business if it’s turning a profit.
Over to you…
How would you approach charging mates rates? Have you had to deal with this in your own business or have you been on the receiving end of mates rates? Share your experience in the comments below.
Jen Smith coaches entrepreneurs in social media.