Let’s examine this common scenario: You just announced to your friends and family that you’ve finally started out working on your own as an independent.  You get lots of supportive replies, and within a few weeks, you’ve gotten a number of potential clients requesting your services.

The majority of these are from your immediate network of friends and family.

They tell you how talented you are and how happy they are to see you branch out on your own.  Inside their encouraging comments, they also ask how much of a discount you will be providing them.  Some even assume you’ll provide them your services for free.

Unfortunately, far too many new independents fall into the downward spiral of continuously giving away their labor for next to nothing when it comes to friends and family.  While it’s often the case that you may need to offer discounts to your initial clients when you’re first starting out, it’s important to distinguish when you’re receiving value from giving a discount and when you’re simply undervaluing yourself.  

During your early period of figuring out your niche, services, and offer, those early clients you provide your services to at a lowered price are specifically for the aim of testing your product or refining your process.  These few early clients are provided a lowered price than your actual value because of the value of their feedback toward analyzing your process, identifying what is missing, and altogether improving the product or services you offer. Once you elevate your expertise and become more comfortable with your business, it is less and less likely a single client will provide such momentous insight to significantly change how you operate.  

As uncomfortable as it may feel, you must get used to saying “No” to providing your services at discounted rates or for free to those who you’re close to.

The reasons for charging friends and family your normal fee are straightforward:

1. Charging your full price is an indicator of the value of your product or service. 

Expert marketers and pricing specialists frequently experience how people don’t value things they get for free.  In the book Your Move: The Underdog’s Guide to Building Your Business, Ramit Sethi reflects on the stark difference in how his course was perceived when he gave the course away for free as compared to when he requested friends and family pay the full price. 

“I gave them a $2,000 course for free, they didn’t even log in ONCE. After awhile, I started to feel a little resentful. This is my business. This is what I do and they’re not even taking me seriously…Finally, I gave up, and whenever someone asked for a free program, I said, ‘Look, I want to give you this material. I know it can help you. It’s not about the money, but in my experience, if people don’t pay, they just don’t value it’…Then the price: $2,600. EXCEPT, not only did they not bat an eye, they locked in to $2,600 PER MONTH for 3 months, totaling $7,800. What?!! I couldn’t believe they saw that value in me. Yet they did.” 

Behavioral economics research studies confirm that people frequently place less value on things they get for free.  Any price above zero implies that a good is scarce, while a price of zero implies that a good is not scarce.  Providing your service at a zero price places it as non-scarce in the eyes of your friends and family.  Since it is so readily available, they are less likely to value it appropriately. 

2. They set the tone for the first set of clients you get and they will continue to come back for freebies indefinitely.

In one of the modules within my Company is YOU! online course, I detail the importance of family and friends early in establishing your business.  This early immediate network is likely to mushroom out into a larger network of clients, as one friend tells another potential client and one family member passes your information on to contacts.  

Providing early friends and family free services out of politeness and the kindness of your heart can lead to them underpricing the cost of your business when they speak to their own network of contacts.  The unintended consequence is an anchoring effect of your price.  A client referral comes to you, believing that you will charge X for your service.  Instead of X, you quote them your usual price of 3x.  They’re baffled. The initial idea of paying X will make the price of 3X seem impractical and overpriced, even if they would otherwise have happily paid 3X if the initial anchor price hadn’t been set in their minds.

3. It forces you to get comfortable with setting and sticking to a price.

If you can’t currently set and adhere to your price point with friends and family, you will likely also have a hard time maintaining your wanted price point with complete strangers.  Forcing the difficult conversation where you request your deserved payment price is something you must get comfortable with if you wish to succeed as an independent.  

Only a small percentage of freelancers know how to effectively price their services in a method based on value rather than based on an hourly rate.  Even fewer are confident and assertive enough to stick to their stated price in the face of clients whose tight budgets often steer them in the direction of slashing costs rather than maximizing accrued value.

While the reasons to charge them are often clear, how to have such conversations is more complicated. There are multiple ways to have this conversation.  You have a unique relationship with each friend or family member and you know best how each individual’s personality might respond to being told no.  However way you may wish to go about it, do be sure to clearly state that your services are your business, and your business is your livelihood.   Your core family and friends network must be respectful of the time, effort, talent, and skills you bring to your work.