The Real Cost of ‘Free’

Have you ever gotten something for free and it fell apart and you thought, “I should have just paid for that stupid thing”?

If you’re a business owner you’ve probably fallen prey to this limiting mindset, the one that says, “Well, I should probably offer my services for free so people know what I have to offer before I actually charge them.”

Maybe you’re guilty of trying to piggyback on someone else’s success and want to help them for free because then you think that person is going to be the answer to your problems and send you all kinds of business. If it doesn’t turn out the way you thought it was going to, you feel resentful and jaded because you didn’t get anything back.

The truth is that it’s your responsibility to charge a fair price for the work that you do. While there are places for freebies such as a free white paper or free webinar on your website, when it comes to your time, free is too expensive. There is a cost to be paid when you do this.

The first cost is that you diminish the other person’s ability to invest in themselves, when you give it away for free.

The second thing is that you actually change the landscape for all of those other people out there trying to do a good job and make money. Why would they pay the other guy if you’re going to do the exact same work for free?

Without even realizing it, you’re impacting the economy and potentially impacting somebody else’s business because you’re not brave enough to ask for the money for that thing you do in your business.

I’ve seen this happen over and over again. When I first started my business, I used to have people come to me and ask if they could do things for me for “free” all the time. It always made me uncomfortable. I wanted some type of an arrangement or agreement so that they didn’t feel that they were being taken advantage of, because I certainly didn’t want to take advantage.

Here are two of my own experiences of what happens when small business owners give away their service for free:

A while ago I outsourced a small project to a new small business. I had been communicating with this individual on Twitter and I wanted to test out their services and support them.

The project ended up going sideways.

I decided to email the individual and asked them to send me an invoice for the work they had done. I politely let them know that I didn’t think I would be using them for that type of work again – no hard feelings.

A month later, I received a reply from them which included an apology. They let me know that they wouldn’t invoice me for that work.

Later when I learned that this person quit their job to focus on their business full time, I decided to help them out again and refer a couple of people to them, assuming that since the business owner was working full time the quality of the work would be higher.

Later I found out that the business told that person that I never paid them for the work they did. Yes, you read that right. They told this person that they did work for me, and that I never paid!

I had another similar scenario occur when I received a free service.

I approached a company about a project I needed done and they insisted on doing the project for free because they wanted the exposure that working with me would bring them.

When it came to deadlines… you got it, they told me they needed to prioritize paying clients. I had never asked them to do it for free. I was always more than happy to pay!

These two situations have served as big lessons to me and I share them with you so that you can learn too.

Free implies no value.

When you give away your service for free, you diminish your own power. You give your power away and allow someone to devalue what you are willing to contribute.

When you allow someone to offer their services to you for free, you do the same thing to them. You devalue what they are worth.

When your time is free the other person’s time will always be more important and more valuable than your time.

If you do offer something for free (and there is a time and place to do this), set up guidelines and boundaries regarding how you do it.

Recently I offered to help someone out and these were the conditions: I told them I would give them some of my time and they could pay me when they got their business up and running. I did NOT say I would do it for free. I also told them that I had expectations around how they needed to perform and that if they did not take our work seriously, and do what they needed to, that I would pull out of our agreement.

By setting up a structure like this, the individual took things seriously. There was a desire to do well and be successful because they wanted to be able to pay their debt. They also understood that I was taking their progress seriously and I was investing in them. This empowered them to be great.

When you are charging for your services, don’t sell yourself short. Charge what you’re worth and perform to the same standard by which you determine that worth.

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