Real friends pay full price

Published by Nela Dunato on at 05:43 in Business, Tips for creatives, Mindset

Today, you and I are going to have a difficult conversation. It’s going to be uncomfortable and awkward (especially if you’re a personal friend of mine), but it’s necessary for us creatives to talk about this.

If you own a business or do creative work for a living, it’s very likely that some (or a lot) of your clients are friends and family. That’s great, right? However, some of your friends and family might think they’re entitled to a discount just because they know you. My stance on this is that friends and family should pay the full price like everyone else, and in this post I’ll explain why that is.

Real friends pay full price

When I say “full price”, I mean the price you’d charge someone you didn’t know personally. If you’re running a sale, then friends can get the same discount everyone else is getting.

When I started out, I thought that I must give friends and extended family a special deal because of our personal relationship. I thought it was the proper thing to do. But then a few of my friends have taught me that paying for someone’s services is a way to show your love and support.

Many of my friends have bought my services without asking for a special deal. When I offered some of them a deal or to do something for free, they’d say “No, I want to support your work.” It’s only when I heard it repeatedly from their mouths that I’ve realized, wow—that’s the way it’s supposed to be. When you’re a real friend, you don’t try to freeload: you support your friends by paying them.

What a concept!

Unfortunately, some people are not that lucky. One writer I know told me of multiple occasions when a friend or an acquaintance demanded his book for free. When he said they're welcome to buy the book, they called him greedy and brash, and some have even unfriended him on Facebook. He told me story after story after story, and I was facepalming and laughing in disbelief, not quite understanding how these people manage to be so out of touch.

Thankfully, my recent experience of self-publishing my first book was completely opposite: friends, acquaintances, clients, and folks I haven’t seen in years bought my book. Some bought it even after I’ve told them they’ll get a free copy. Some paid the full price on purpose, even though they could have bought it at a lower price while it was on sale. I was overwhelmed and positively shocked by their support.

As amazing as my personal experience is, unfortunately it’s not the norm in the larger creative ecosystem. I want to show you what’s possible when you maintain healthy boundaries around your professional life.

Asking for freebies (especially if it's a time consuming service or a physical item) is just poor form, but discounts are not much better either.

Paying for someone’s services is a way to show your love and support, and that’s what real friends do.

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“Support” means paying people fairly

The only way to truly support a new business is to pay the full price. There is a minimum amount of money you need to make in order for your business to be profitable. If you’re charging below this price, then your clients are not supporting you, you’re supporting them by giving them a portion of your work for free.

People have a bias that makes them think “something is better than nothing”. For example, out of the three options, which one would you rate the most favorable, least favorable, and somewhat favorable?

  1. Book a project at the full price.
  2. Book a project at a discounted price.
  3. Don’t book a project.

Many people would say #1 is the best option, number #2 is an acceptable option, and #3 is the worst option. What these people are missing is the concept of opportunity cost.

When you work for a discounted price, you’re paying an opportunity cost.

Opportunity cost means you’re losing the opportunity to do something better with your time. For example, you may book a project at a discounted price, and then a week later get an inquiry to do a project you’d be able to charge the full price for, but now you can’t because you’re too busy.

I can hear you say “I can do both!” but trust me, there’s only so much work you can do before heading straight to Burnout Town. Besides, you need some time off too. Working all the damn time is no way to live.

Out of the three options above, I’d say:
#1 is the best option.
#3 is the second best option, because you have availability for #1 type of project.
#2 is the worst option.

When you start looking at the opportunity cost of the projects you’re agreeing to, you’ll realize something is not always better than nothing. You need to charge what you need to charge, or reject the project.

You may need the money more than they do

Let’s say you’re a graphic designer working for a private practice doctor, lawyer, or a car repair shop. Do you know how much money these people make? Have you ever tried to hire one? Newsflash: they make more money now than you and I combined will make in our best year.

Sure, there are businesses that are far less profitable, but even then you need to be skeptical when they tell you a sob story. It’s likely that your expectations of how much you need to make have become so low, that you fully believe people who tell you they don’t earn so much. In reality they may be earning twice or three times as much as you, but their living standard is much higher than yours, so they perceive they need more.

If you’re struggling financially, you can’t afford to give out discounts.

You can’t. Period. There’s no way around this.

You may think “I’m only giving them my time, not money” but you’re giving away your earning potential. Remember the opportunity cost? You could be doing something else with your time. (If you need ideas on how to use your time, read my posts Design contests suck. Don’t do them. and Top 10 things you can do when your creative business is slow.)

I did a project for someone who was starting a new business, and at their request I gave them a deal to “support them”. At the time I was doing okay financially, but I was living a very frugal life.

A few weeks later, I heard this client went for a vacation to an exotic location. While I hadn’t travelled abroad for a vacation in over 5 years. I felt resentful because I thought it was unfair to bear the burden of someone’s startup, while they obviously had the means to pay. But perhaps that would require them to sacrifice their vacation, and this way I’ve had to sacrifice mine. Again.

Is it their fault? No, I gave them that discount. I could’ve said no. All the discounts I’ve given are 100% my own responsibility. And yet I’ve felt resentful and mad at myself because I wanted that vacation so bad, I even made plans for it, and then I simply didn’t have the means to pay because of my irresponsible financial decisions to give discounts that I couldn’t afford.

Charging the full price is a neat way of keeping your professional and personal relationships free of resentment.

Full price or free

If you want to work pro bono and can afford to do it, do it. But in that case the client knows you’re giving your work away for free. If you charge the client a fraction of the real value, the client will see the price you’ve charged them as the true value. (For more on this concept, I recommend the seanwes podcast episode 164: Full Price or Free.)

Be careful not to volunteer more hours than you can afford. Set a maximum yearly pro bono budget of hours that you can donate without putting yourself in financial jeopardy. Divide these hours by quarter, and stick to your quarterly budget like your life depends on it.

When you get a request from a non-profit organization or a friend you want to support, check out your quarterly pro bono budget. If you have time to donate, do the project enthusiastically. If you don’t, explain that you’ve hit your limit on pro bono projects and ask if you can postpone it for the next quarter. (The only way they could get it done sooner is to pay your full rate.)

The concept of the pro bono budget makes your decisions easier, and you have a bulletproof argument to use when you simply can’t do something you’re being asked to do.

You can still give gifts from the heart

I’m in no way saying you should never give anyone anything. You can give gifts, whether it’s birthday or holiday presents, or just because. With gifts, you’re in control of what and how much you’re giving.

Give only as much as you can without sacrificing your well-being. Your real friends will understand. Give from your own generosity, nor from pressure. If you give more than you were prepared to, you may start resenting your friends, and that’s not healthy for either of you.

Some people even go so far as to recommend to never work with your friends. I’m not a fan of strictly separating your professional and personal life, and I believe you absolutely can have friends as clients, and your clients can become your friends. But in order to have a healthy professional relationship with a friend, you need to set boundaries. This is challenging, but not impossible.

How to say no to freebie or discount requests

If someone is trying to talk you into giving a discount, politely disengage from the conversation and don’t agree to anything until you’ve had the time to thoroughly think about it. In-person and phone conversations put you on the spot, but you can say “I need to think about it” and then let them know later what you’ve decided.

Think about how much money you need to bring in in order to meet your financial goals. If the price they’re offering to pay is not enough, tell them you can’t afford to give a discount at the moment. You can say something like:

Hey Friend Name,

I’ve been thinking about your request and ran some numbers. Unfortunately I can’t give a discount for my services at this time without it seriously impacting my finances. I need to charge at least $XXXX for a project like this in order to keep up with all of my expenses.

Let me know if you’d still like me to work on your project.

Best,
Your Name

That’s it.

You’re not a bad friend for saying no. If you tell them you can’t afford to give a discount, and they still try to talk you into it, then it’s them who’s acting like an entitled jerk, not you. Folks, let me give it to you straight: people who don’t care about your well-being aren’t your real friends.

Real friends want you to be happy and healthy, and they know that regular income is a part of that.

Read friends will ask you what the actual cost of your thing is, put it in their budget, and try to get a grant or save up in order to pay you in full.

Real friends may ask you for a payment plan or an extension, and promise to pay back when they can.

Real friends may offer to barter for a portion of the project fee if they sell something you might need. You’re under no obligation to accept bartering if you don’t want what they offer, or you can’t afford to trade. But at least this person has shown some goodwill instead of just asking for freebies, because they know that your time is as valuable as theirs is.

Having a hard time saying no to freebie & discount requests from your friends? Here's a short script you can use:

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There are many things real friends can do other than ask you to discount your prices

Model this in your own life. Only charge what you can afford to charge, and never ask your own friends to give you discounts. If your friends start waffling when you ask how much it costs, stop them and say: “I’m happy to pay your regular rate.”

If you’re in a dire financial situation and you really need your friend’s services, ask for a payment plan or an extension, but give exact dates when you’ll pay them back. Asking friends who owe you money to pay you back is super uncomfortable, so please don’t put your friends in this situation because it may ruin your friendship.

There are situations when a friend has done so much for you that you want to reward them with free products or services—that’s great! Count it as a gift given from the heart.

Too many folks barely make ends meet because they’re trapped in the discount cycle.

The less you charge, the less safety and comfort you have. You’re stressed about money, so you end up accepting projects for a lower fee than you really need to charge. You can never get off the hamster wheel because you can’t catch a break financially.

The higher you charge, the more safe and comfortable you feel. When you’re not stressed about money, you can turn down projects you don’t want to work on.

You deserve to have healthy professional relationships, not those that always require discounting your services. You deserve to feel safe and comfortable, and to control which projects you want to work on.

If working with friends and family is making an impact on your finances, take a break from working with them for a while and practice only charging full price.

Once you get it in your bones how much you truly value your services, offering huge discounts will feel weird. The reason you’re playing along with it now is that you may not believe some people will actually pay your full prices. Once you start consistently selling your services at full price, you’ll have proof that you don’t have to worry, they really are worth that much.

Running a creative career has many perks so lots of people confuse it with a hobby. It’s hard to explain to those people why you need to charge for your work. Maybe it’s not your job to explain it to them—maybe your job is to just say no.

Stop trying to make everyone like you. Some people will think you’re “the bitchy one” because boo hoo, you’re not giving them what they want. Once you experience a comfortable life free of financial worry, and maybe even your own exotic vacation, their opinion will fade like an old dream.

Rest assured, your real friends will still be on your side.

Nela

Nela Dunato

About Nela Dunato

Artist, brand designer, teacher, and writer. Author of the book “The Human Centered Brand”. Owner of a boutique branding & design consultancy that helps small service-based businesses create exceptional client experiences.

On this blog I write about art, design, creativity, business, productivity and marketing, and share my creative process and tips. Read more about me...


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