NFIB

Friends and Family: To Charge or Not To Charge
04/ 02/ 2002

It's always a dilemma for self-employed people who offer a service: Should you charge friends and family members? Should you give them a discount? In today's Workshop, Jeffrey Moses discusses this thorny question.

There are three major factors that could influence your decision:

1. How busy you are. If your business is new and you don't have many clients yet, you might want to build up a little goodwill by offering a healthy discount to friends and family, or even providing some services at no charge. Once you get very busy, however, you may not feel it's wise to give your services away. When this is the case, simply inform your friends and family members that you are supporting yourself and your dependents (spouse and children) through your work, and it's not fair to them to work at no charge when paying work is available. To maintain goodwill, however, you might want to offer friends and family members a 10%-20% reduction in price, but set a limit on the amount of work you do at that reduced rate.

2. How close the person is to you. For instance, you might feel odd not offering your parents a discount. (But even they must realize that you have to set a limit on this pro bono work, and there may be times when you simply are too busy to work at no charge.) Siblings, cousins, friends and acquaintances should not expect discounts automatically. To avoid causing hard feelings, always explain your position straightforwardly, saying that you have steady customers and simply can't afford to work for free. You may experience a few very pushy relatives who respond to this by saying: "Well, then you can come over and work at night." To this your reply could be something along the lines of: "I'm working some evenings right now for a particular customer and need evenings with my family the rest of the week." Of course, if a family member is absolutely strapped for cash or going through a crisis, your decision may be influenced by these circumstances.

3. How much time you want to give away. Some self-employed people want to donate part of their time to charity or to working for family members at no charge. But this is always your own decision. Discounts are yours to grant, not someone else's to demand. Don't allow yourself to be intimidated by demanding relatives, friends or even charities. You are in business to support yourself and your loved ones and to secure a future for them.

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