Why you should never work for free for a client – and how to set your boundaries

Business

It’s never easy firing a business client. But find out why having to do just this helped one small business learn how to set their boundaries when negotiating with future clients. 

I set up Marketing for Mums just over a year ago, and in that time I took a very difficult decision of ending a relationship with a client. “Are you mad,” I hear you ask? That was certainly how I felt at the time.

The decision was preceded by months of heartache and many self-sabotaging thoughts questioning my ability and values.

However, at this point of reflection, I have learnt that trusting my gut and not devaluing myself has meant this was absolutely the right decision to make. Not just for my personal self-worth but also for that of my business.

I worked virtually for free for several months

I had, for a number of months, worked almost for free for this client in order to get some experience, keep busy, learn and build my confidence while I set up my business properly. The work did all of those things which I will be eternally grateful for.

However, the sticking point came when I needed to work with multiple clients, and I asked to put in place a proper contract, agreed hours of work and charge market rates that I know were appropriate for the value offered.

Unfortunately, this client was unable to do that, and I was heartbroken. I had invested hours of my time and they were, in my head, my dream client and a huge part of my planned future. Alas, it wasn’t to be, so I chose to walk away.

How to set your boundaries when negotiating with clients

So what did I learn from that? I learnt working for free or at highly discounted rates is fraught with danger. Rather than gaining a grateful client who loves what you do and will reward you later, you risk working for someone who undervalues your offering and is unwilling to ever stump up money for it.

If you do decide to offer your services for free or cheap to a client, I recommend minimising the risk by setting these five boundaries when negotiating.

1) Set a timeline

Make very clear upfront how long you are prepared to do this for. Keep this time short; you can always review and increase this if it is mutually beneficial.

2) Set clear, realistic deliverables

Agree what you will deliver – and be clear with yourself about how much time and energy you can afford to devote to this client or project.

Remember that you will still need time to find and deliver work to other clients at your full rate in order to grow your business (and survive). Don’t compromise on this time.

3) Let them know your rates and contract terms upfront

Be clear what your rates are, so they know and can plan for working with you formally in the future. When you invoice them (even if you’re working for free, it’s good to get into the practice of invoicing clients), list the real value of your work at your full rate, then show them their discount.

4) Set your rates and stick to them

Before you decide to work for free, or at a reduced rate, remember both you and your client are have a choice. You don’t need to work for them, and they don’t have to work with you – there are plenty of other businesses or freelancers they can use.

So don’t feel compelled to work to terms or rates the client dictates. If you have done your pricing research and feel comfortable that your fees are appropriate for what you offer, stick to them. If you cut them you will be investing time with a low paying client. And this could be at the expense of another who would be willing and able to pay your full rates.

I also think there is a very important psychological point here too. You are worth your rates, and deserve to be paid them, so hold your head high and keep the faith.

And finally, there is a danger that your client will devalue the work you deliver if you undercharge for it. It’s also very difficult to increase your prices once your working relationship has been established.

5) Set out your agreement in writing in a contract

Set your agreement out in writing in the form of a contract. This way, expectations will be very clear, and you can always refer back to the contract if there’s any deviation or disagreement later on.

Clarity of contract can help remove emotion from discussions about your future together, which should ultimately be about making a sensible business decision for both of you.

I found a new client who valued (and paid!) me

Making the choice to walk away from a client was a hard one for me. I naturally invest passion and energy in what I do and, as a new business, I was terrified I wouldn’t find another client to replace them.

But do you know what? The most amazing thing happened. Within literally a few weeks I had secured another client. This client is a genuine partner who I love working with, values my support and I will hopefully continue to work with them for years to come.

So my advice is to face the fear; if for whatever reason it doesn’t make business sense, or even for your own feeling of self-worth, to continue working with a client then walk away. This is about you taking back control, focusing on the value of you and paving the way for a much happier future. Good luck!

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Jocasta Tribe is the founder of Marketing for Mums.

Photo by AO