When Should You Work for Free?

In our Small Business Management Course there is a module on determining and setting your prices, which includes factoring in things like travel expenses if you’re going to be visiting clients and so forth.

But what about things like, installation costs – should you bill your clients for this or work it into the price or just let it slide?

Some businesses work those sorts of prices into their final cost; others – think Foxtel, for example – charge installation fees; but a surprising number of businesses let it slide.

We don’t think this is necessarily a bad idea, though we don’t think you should leave this kind of added value go unnoticed by your clients, especially when you consider some companies charge you for everything – from customer support to installation of their product.

It’s not just big players like Foxtel, either. Consider any time you need some form of legal help, be it a letter sent on your behalf or a consultation, you’re billed for that lawyer’s time. The same goes for the medical profession.

Let Your Customers Know What You’re Adding

When you’re starting out, however, it can be hard to do this because usually you’re just hungry for that first customer. That’s why we think it’s a better idea to do some work for free, but notify your customers of this added value you’re providing at no additional cost.

This also enables you begin charging these clients for that additional work at a later date – so long as you give them notice beforehand, of course. By doing this, you’re not only establishing a way to later bill people for time that will eventually become precious as your business grows, but you’re also establishing yourself as a competitive player in the marketplace.

In this sense, doing work for free can be very good for business. By the same token, you can also use this approach when clients ask for discounts or price reductions on your products or services.

Rather than giving them a discount, think of ways that you can provide them with added value without discounting your prices, just as car dealers or some IT resellers do when you ask for discounts.

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Next time you’re thinking about your prices, consider outlining any potential added value that your customers and clients aren’t being billed instead of discounting or giving price reductions.