In working with our Foundations1 students, the question of discounts or freebies for family and friends came up. People were feeling caught in a no-win game of either feeling like a jerk for not offering it, or feeling like they weren’t taking care of themselves if they did offer it.
What to do?
My answer has changed over the years, but before I tell you, let’s examine what’s going on a little more deeply.
Who are friends and family?
In the era of social media the word “friends” has gotten a little loose, but let’s tighten it up in this instance. Family I define as related by blood or marriage, or however you create family in this era of restrictive marriage laws.
Friends are pretty similar. Friends I consider to be folks close-in my social network, people who know me personally, and who I’ve introduced to my partner and my kids.
There is an woven tapestry of support with friends and family, often with a lot of giving and receiving without accounting for it. At least hopefully.
What is a discount?
I actually have strong opinions about discounts. A discount is usually given for one of the following reasons:
- To bring in new customers. Not the best tactic, and usually used to make up for imprecise or incomplete marketing.
- To thank people. Not the best tactic, because a thank you gift shouldn’t require the person to spend more money to receive it.
- To honor a relationship. I like this, it feels good to me.
We’ve given special pricing to members of our community to honor the relationship we have with them. So it seems like discounts or freebies would apply to your friends and family, to honor that relationship.
The Untold Part of the Story
Usually the reason that discounts to family and friends is even an issue is because the business is not doing that well yet. Every client, every payment, is needed, and so it becomes hard to justify spending unpaid, or underpaid, time.
When I was newer in business I did charge my friends, because, in the beginning, that’s who my clients were. That’s who I knew. I didn’t yet have much of a larger audience outside that circle.
As the business grew and became more stable, I saw fewer and fewer of my friends as clients, simply because the audience had grown. (And not, presumably, because my friends had gotten sick of me.)
What Changed for Me
When Heart of Business achieved stability and momentum, I mostly stopped charging friends and family, just because it felt right. I didn’t need it, and I wanted to honor the relationship.
However, that doesn’t mean I filled all of my client slots with friends. What I ended up doing instead was saying that I was happy to go to lunch or tea with a friend, or have a conversation, no charge.
When I hang out with friends I’m also comfortable if they have questions for me, if we take a little time to talk about their business. I enjoy what I do. It’s okay.
However, if a friend were to say that they wanted to work with me ongoing, I would be more likely to either charge them something, or to figure out a trade that works, such as for childcare.
You might have a different relationship with your friends, and especially with your family. Maybe you don’t feel particularly generous toward them. That’s okay. Honor your heart, honor where you feel like giving and where you don’t.
Let me say oh so tenderly and compassionately that if you are stuck on this question in a big way, then it might be a symptom that you need to grow your audience beyond your circle of friends. You might need to take on marketing in a real way.
I’m so curious how you handle discounts and freebies to friends and family. Let’s hear all about it!
Ready for individual help?
If you need to expand out beyond your circle of friends, maybe you could use some help getting there. In which case, I want you to consider working with one of my friends.
Jason and Yollana are our two practitioners and they are that someone who can get into your business with you, figure out exactly what you need and what it needs, and get you moving so much more quickly.
If you want to love your business, honor your heart and make more money, then check’em both out and see which one you think you resonate with more. Then schedule a conversation. They’ll help you discern if it’s the right step for you.
Check it out: One-on-one help with the Organic Business Development Program link
Thinking about working directly with me, Mark? If you want to see what it’s like to work with me and who I work best with, here you go:
8 Responses
Great post, as usual, Mark! And thanks for addressing this sometimes tricky question.
One thing I’ve found helpful on the question of friends and family discounts or pro bono work in general, is to develop a policy (doesn’t have to be made public). It might be “giving away one free seat for each class” or “speaking for no fee twice a year.” This way, I find that it allows me to honor my relationships, while still generating the income I want for my business, and with a lot less of the second-guessing.
Michael
Michael- absolutely. When you’re clear beforehand, it does remove the awkwardness and pressure of needing to decide both *if* you’re giving something away as well as *who* you’re giving it to.
Hi Mark,
Thank you for your post. I have been struggling with this and spending more time thinking about what is right to do then harnessing my focus into actually building my business as I am just starting out.
I really like the reason ~ “to honor a relationship”. When I put it in that context it just makes more sense.
Thank you for sharing.
kel
First I want to thank Mark because I am a recipient of a discount from him and I am not even a friend or family, he just had some compassion for me and my situation.
I think discounts are a good idea if you follow your heart, not because you feel an obligation. I recently had a client ask me for a discount on my quoted work. I really needed the work and told them I would think it over. Then they called back and offered me something an 80% downpayment before the end of the year (they needed a tax deduction) and a flexible completion schedule. It worked well for both of us. I recently realized that I needed to be tracking all my discounts. I called my accountant and yes, they are deductible! I now track them as a “signing bonus” in quickbooks.
Steven
Steven- you are so welcome. And I love what you said about needing to track them- they are deductible! Good for everyone to know.
Having a start-up is painful but im enjoying it. This article has helped me understand the importance of using freebies. Thanks
I just faced the same question towards new clients who aren’t my friends/family, but were referred to strong network connections. They both suggested to work on some form of trade basis, which I didn’t want to do. I decided to offer discounts with an explicit clarification attached:
client 1
– here is my normal fee
– here is my discount to honor the relationship with the XYZ community …. and because this project is inspiring to work on.
– here is my discount based on the volume of the project
client 2
– here is my normal fee
– here is a discount for you as a small-business owner
– here is an additional discount if I can produce your design in my signature style for a new series, so your design becomes part of my portfolio (this saves me a conversation with the client about the style + custom design + I feel comfortable to use their project for different forms of self-promotion- otherwise I always ask permission and don’t ask for it if the content seems somewhat personal or business-sensitive.
– this discount is valid for 14 days (afterwards I might book another project for the full price)
Thanks for the tax tip. Helpful for next year!
Susanne- I love the clarity you bring- great examples.