From Doctors to Architects, from Artists to Car Mechanics, everyone who provides services for a living has friends that ask for expensive favors and members of professional and personal networks that make saying “No” awkward.
If you find that business discussions in social situations routinely end up with you giving your services away free, the following advice will be useful.
You’ll find our suggestions particularly handy if you are just starting your business and many of your customers will necessarily come from your personal circle of friends and acquaintances.
Pricing Favors and Avoiding Freebies
There’s a rule salesmen often follow when closing sales . . . “He who names a price first loses”. Why? Because if you name too high a price a potential customer goes away offended. If you name too low a price you discredit the value of what you do and you cheat yourself out of a fair price.
Always Remember, What You Do Has Value
When people ask you for advice or help, whether at a social event or a business networking event, they are indicating that what you do has value to them. So, the next time you end up in a social chat which somehow turns into a solicitation for free advice or help, be friendly. Spend a few minutes talking about specific actions they can take to resolve the problem.
At some point they’ll either drop the topic or say “Can you help me?”
At this point you should say, “I don’t know. What’s your budget?”
Then wait without saying anything.
If the person you are talking to doesn’t say anything, or moves on to other topics, they don’t have a budget and you’ve just sidestepped offering your services for free.
If they say “I can’t afford to pay,” say “Well, after our discussion, I’m pretty sure you can find what you need online. There are so many good sites for free help this these days.” Then feel free to move on to other topics. Resist the urge to make their problem your problem just because you’ve shared a good discussion.
What Happens if They Want to Do Business?
If someone ask how much you charge. The only sensible reply is “It depends on what you want done”. If time permits, generate a list of deliverables then ask “How much can you afford?” or “How much will that save you?” or “How much revenue will that generate for you?” That sets some framework for a price.
If the person just refuses to participate in negotiation, try naming a high price for your services. Sometimes it helps to use the phrasing, “Well right now I’m doing that for a few clients who pay . . . ”
While this may not get you work, it will let you get back to the party.
Learning to Handle This Situation Well Makes Networking More Profitable & Social Events Less Trying
The truth is, most nice people won’t waste your time for long if they don’t have a budget to pay you for what you. Once you know they are interested in paying you, the only issue is price.
Some people will waste your time, either because they are naive and think you can afford to work for free or they have a different set of business ethics from most of us. When you run into those people, it’s best not to turn them into “customers” or people you owe services to. They can waste a great deal of your time, and when you sell services for a living . . . time really is money.