Starting a Business? Don't Hire Your Friends.

‘Friends and Family’ Pricing Can Cost More Than Just Cash

The cost of discounting your services can pile up quickly, especially when you’re working for friends.
The cost of discounting your services can pile up quickly, especially when you’re working for friends.

When you’re a writer, one of the first things you learn is that everyone else thinks they’re a writer, too. Never mind that you went to school for this, or have a decade of experience in different kinds of writing. Never mind that you speak every industry’s secret language — finance, law, public relations, marketing, and medical. Never mind that your writing is, actually, the only indispensable part of any business. Don’t explain what you know: that the ability to type is not the same as being a writer.

There are other hazards, too. Call what you do content creation and there will always be someone younger than you who is better at it by virtue of their youth. Notice that you’re not offered a percentage of the $1 million investment your writing helped raise, when the whole fundraising team gets a pay increase and a celebratory weekend at the coast. Notice that, without good analytics, your work has no value to someone who only sees you as an SEO machine.

I know these things because I encountered them. They were part and parcel of the career path I chose — a kind of ritual hazing that I think all freelance creative people endure. As I slowly learned to navigate my business, there was one persistent, unforeseen problem. It wasn’t the work I was being paid to do. It was the work I wasn’t being paid to do.

Freelancing with a budget of zero

When I started to dip my toe into writing, I slowly entered a world of other freelancers. It was like a fantastic bazaar, populated with artists, designers, writers, financial planners, essential oil salesmen, massage therapists, astrologers, witches, housekeepers, hunters, back country guides, skydivers, taxi drivers, strippers, singers, and childcare professionals.

Everyone had a skill for sale. They had glossy websites, business cards, stock on hand, and good quality tools and electronics. Most of these people were one-man shows, with insanely low overhead. They worked out of their homes, didn’t hire any staff, and tried to do everything themselves.

That meant that they wrote their own copy, booked their own appointments, filed their own taxes, paid for their own travel, designed their own marketing and promotions, and cold-called their own prospects.

Some of my friends became successful, or at least stable, using this approach. What I didn’t realize, until I started to ask questions about their business models, was how much of their business was actually built on the assumption of free or severely discounted labor. They didn’t budget for marketing, administrative help, or other business support. They all knew someone who offered those things, and might be willing to do them for free.

“Can I pick your brain?”

The first time I encountered this, I was talking to a friend who was working on transforming his Pilates instruction-based company into a global brand. He had a solid foundation of individual clients, and a few group workshops that he was trying to sell to local gyms, yoga studios, and dance spaces. He had big dreams, and saw himself as a healthy disrupter in the often-toxic beauty and fitness industry.

“I just don’t know how to take the leap,” he told me. It was beyond adding new clients. He wanted to grow his revenue exponentially, book more group sessions, open a studio of his own, and start training specialized instructors to use a new, alternative Pilates method that he could patent himself. He envisioned writing a book, producing online videos, and sharing his message of self-love with the world.

I told him that it had been done before — by plenty of brands, including Nia and Barre3. “They have something you don’t,” I told him. “They have a marketing strategy.”

“How does that work?”

I picked up a pen. For the next hour, we talked through the working parts of his business, what he envisioned for the future, and what his immediate, tangible goals were. I designed a marketing strategy that would cost him almost nothing to execute, created a content calendar, and suggested three things that he could do that week to get started. He stared at the diagrams I had drawn, then nodded and smiled. It was simple, elegant, and achievable. And why shouldn’t it be? I was a professional. I did this all the time.

“This will take you where you want to go,” I said. I tapped the paper. “If you start with writing a few new blog posts and getting some content into your pipeline, that will get things moving. Let me know if you have questions about this, and I can explain anything that doesn’t make sense.”

He thanked me. And then we moved on to another topic.

A detailed, customized, scalable marketing plan that includes branding, corporate DNA, social media specific marketing, some writing, and PR materials costs up to $20,000. Many marketing firms will also sell you a package that includes upkeep on the social media platforms you think are the most important. That can be $3,000 or more.

Yep.

He didn’t offer any kind of payment, or even reciprocal trade. It was clear to me that I was offering a service that he absolutely needed if he was going to do more than one-on-one sessions with his existing clients. It was also clear to me that he didn’t have the capacity to provide a service that I valued enough to be used as payment. $20,000 is a lot of Pilates sessions.

When this same friend approached me later that month, he was asking for more help. He’d gotten some writing done, and set up the first phase of the strategy, but needed a hand actually getting his content in front of people.

This time, he said the magic words: “Can I hire you?”

The secret trap of Friends and Family Pricing

This is the hardest lesson I’ve learned about money: If you don’t ask for what you’re worth, your work will be devalued.

My friend asked me what my normal, hourly rate was. When I told him, he flinched. “That seems high,” he said. “People really pay you that?”

I looked at him in disbelief. “Of course they do,” I said. And then, even though my instincts were screaming at me to just move on, I offered him the Friends and Family Rate. He quickly agreed — it was a blue light special, compared to what I usually charge. And it worked. Shortly after implementing the changes I suggested, his company started to grow.

Working for my friend, albeit on a strategy I’d built myself, was in many ways more taxing than dealing with a high-profile client. Every piece of content needed to be explained to him and reviewed before it was posted. He texted me at odd hours, asking questions or sharing new, bright ideas. He was a very high-maintenance CEO, a one-man circus that demanded to be in the spotlight at all times. After the first week, I noticed that he started to delegate tasks to me and assume I’d make time to meet with him, without asking first. Suddenly, I realized that I wasn’t his friend — I was his employee, and his treatment of me was a direct reflection of what he thought my work was worth.

It came to a head when I went to New York in the spring, to visit my sister. I spent most of the trip with my head in my phone. Working. Writing. Wrangling content, and managing the responses to it. I tracked my hours, and when the end of the month came, I submitted my invoice as usual. I think it was something like $600. To my surprise, I got a phone call.

“This is way more than I expected to spend,” my friend said. “I thought you agreed to a lower rate than usual.”

“This is my lower rate,” I said.

He sighed. “Look, I just don’t think I can keep this up,” he said. “I mean, I don’t even know exactly what you’re doing. I will pay you, but I can probably handle it from here.”

The check came in the mail a couple of weeks later, in a plain envelope, by itself. No note, no thank you. Nothing. The friendship, if it ever was one, started to fade shortly after. I kept an eye on his business for the next year, noticing how he continued to use the plan I’d created for him. Apparently, it’s going well — it’s still working, and all the nuts and bolts I helped screw into place are holding tight.

When you say yes to a friend, you might be saying no to yourself

I try hard not to think about the revenue lost due to services I have offered to friends and family. However, I would be irresponsible if I didn’t review my pricing policy from time to time. What I’ve learned is that offering my skills to a friend has never been bad for that friend, but it’s often been bad for me.Especially in a field where “everyone can do it,” like writing or social media, what I offer is further devalued if I don’t put a respectable price tag on it.

When something is free — even if it’s offered with love — many people will not recognize the amount of sweat, inspiration, and creative energy that they are receiving. They hold your gift up to the light and inspect it for holes. When someone does this, they demonstrate that you are way out of their league. They’ll be quick to forget what you’ve done for them, and, in my experience, quick to take credit for the success you delivered.

That’s why I only give this kind of help to people who respect what I do. And I am willing to receive it, from people I respect in turn. There are some rare occasions that I take on a client who is extremely promising but doesn’t have the scratch to cover my full fee. I can do this generously, with love, because I maintain a healthy balance of full paying clients. I have created a scholarship fund to cover discounted clients, so that if I decide to get lost in a passion project, I’m supported.

Most importantly, I put myself first. I know what I’m worth, and I ask for it. When you’re a writer, you learn how to do this — and a whole lot of other things, too.

This essay appeared in The Billfold, a sister site of the now-defunct The Awl.

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