Should You Work For Free When You Start A New Business?
Starting something for the first time can make it difficult to get others to put trust in your product or service.
You may even feel uncomfortable selling something to people with no real experience or testimonials.
Owning my marketing agency, I often felt like I was an imposter - like I was selling something (marketing services) that I cannot deliver on.
To make this easier, I practiced setting up campaigns on the Facebook ads manager but it was still no help.
My next idea was to find and hire a great media buyer - one who has amazing results running adverts for businesses.
This made it a little easier to start pitching my service to people but still felt uncomfortable because we've never actually gotten results together.
Whilst working on this business, I would watch many videos of 'influencers' talking about selling your service for free, to begin with.
On the other hand, there were lots of people who were saying that selling your services for free is not a good idea and that you should start by charging a premium.
So what really is the right thing to do?
Should you sell your product or service for free to get some experience at the start?
In this article, we're going to discuss some pros and cons of working for free and allow you to make your own judgment on the matter.
After all, no one knows what's good for you other than yourself.
Here are the reasons for and against working for free.
This is a blog full of business positivity and people working towards a singular goal - let's begin with the positives.
Here are the reasons you should start by working for free.
Before we begin, it's important to mention that consistently working for free is a terrible idea no matter who you ask.
Working for free, if you consider it, should only happen a few times until you're ready to take the next step and advance your professional career.
Getting your first few customers or clients can be extremely difficult.
This is why it may be smart, in some cases, to explore the idea of working for free.
An ideal situation to be in is to work for free when the upside looks great. This means that sometimes, the company you're looking to offer your products or services for free to can, in turn, benefit you more than you think.
This could be:
- A celebrity or influencer trying your product.
- A large company
- A company/person with connections
You never know - you may offer your services to someone or a company itself and they may have connections to other people or companies in your target market.
Offering your service for free and overdelivering can be the reason your business takes off - all you need is the person or company to recommend your services to their connections.
So first, think of the bigger picture.
Would this opportunity potentially lead to more opportunities down the line, greater opportunities even?
You can ask some questions such as:
Where will my work be shared?
How many people will see my work?
Finally, don't be afraid to ask for recommendations and testimonials.
It may not seem like it, but you're doing them a larger favor than they're doing for you.
A quick recommendation I'd give is to get your potential client on a call as soon as possible - asking these questions through messages will usually result in you being ignored and the lead being lost.
This has happened countless times to me with my agency - I feel like we're getting somewhere and all of a sudden, I never hear from them again.
Gain real-life experience
Probably the most important and beneficial thing you can get from working for free is the experience that comes with it.
Working for free is a great way to get real experience in your respective field of work.
With my marketing agency, I spent a lot of time setting up campaigns in the ads manager on Facebook but I didn't actually launch them.
A few things I could have done, which would have been a lot more effective, was advertise affiliate products.
This would have been a great way to build up some experience and make some money off it.
Your second best option is to work with a company, for free in this case, to get that experience you need.
This way, you'll know if you can deliver what you're promising, or if you need to go back and improve on your craft.
In some industries, however, you're able to build up experience without having to do anything like this.
For example, if you have a writing service, you can easily write articles or start a blog to write on for experience.
If you make websites for people and businesses, you can build your own sites for building up experience.
There may be better alternative ways to get experience, but if there isn't, then working for free is not a terrible idea.
This experience will help you build up your confidence and go after larger clients, charge more, and build a better business.
Build on portfolio/testimonials
One of the main things people ask for when they're interested or want to learn more about what you do is your portfolio.
They want to know if you really can provide what you're promising.
This is why having a portfolio or better yet, video testimonials of your clients recommending your work is a great way to build up new business.
After all, nothing can promote your business better than others experiencing it and liking it.
Working for free is a great way to get some testimonials.
Working on the marketing agency, I met many agency owners. I saw what was working for people and what wasn't.
One of the people I got to talk to posted many video testimonials of real estate agents (his target market) saying how great his service is, and the sort of results that they got working with him.
Thinking back now, I'm not sure if they were paying clients or free trial clients, but either way, this most likely led to more business.
Better yet, you might have the opportunity to work for a large business or high-profile person.
This can work extremely well in your favor.
Have you ever visited some sites and one of the first things you see is something that says 'We've worked with...'
They then go ahead and list a lot of large companies or people they have worked with in order to build up their credibility.
This works the same here.
If you have an impressive portfolio, people will be more eager to work with you - if you have large businesses or individuals on your portfolio, your chances go up by at least 10X.
We spoke about all the reasons you may want to go ahead and work for free.
It may look like it's the best possible option for you right now but before you rush out looking for free clients, it's important to understand the downsides of working for free too.
In my opinion, at least, the negatives outweigh the positives by quite a bit.
Builds a 'cheap' rep
When we look at Apple and its products, we think of luxury, premium, expensive, quality, and all these other terms.
When many people look at something like a Nokia phone, it may be quite the opposite as to what they'd say about an iPhone.
Apple has managed to build a reputation that cannot be tainted by anything else.
No matter what phone you compare to an iPhone, the majority of people will go with the iPhone because of the reputation and fame it's built up.
Anywhere you go with an Apple store, you'll find herds of people inside or lined up outside, waiting to go in.
Apple didn't build this sort of business by going out in the public and offering their phones for free.
They built it by first building a superior product and then positioning it as the go-to product in the market.
Tying this back into your product or service, why would you offer your product or service for free?
Although it may have all the above perceived benefits, you'll only be tarnishing your name and brand.
People and clients will start knowing you as the 'cheap' or 'free' service.
People have no problem paying a premium for a superior experience - this is why they pay thousands for an iPhone (or Samsung), not hundreds for another phone.
Positioning your products or service as the cheapest, to begin with, will only build this sort of brand image as you grow.
My latest SaaS product, Hawk prospecting (releasing very soon), is positioned slightly cheaper yet competitively priced with the competition.
If I lowballed myself, then users and customers of the product will also think that this product is cheap and probably of lower quality than the competition.
So think about what sort of business you're looking to build.
The Mini car brand positioned itself as a cheap and affordable vehicle to purchase whilst a Lamborghini, for example, is a premium vehicle that only a bunch of people are able to afford.
Do you want to build a premium product or service, just compete with the market alternatives, or do you want to be the 'cheap' alternative?
Attract the wrong clients
Running my marketing agency, I started off by helping real estate agents generate more leads using paid ads.
Unfortunately, the reality was that most real estate agents do not make a lot of money in order to be able to afford a service that costs 1000s per month.
Offering my services for free would have been a great idea... if free work was all I wanted to do.
Offering your services for free to real estate agents will be like feeding a school of fish.
They'd all come rushing to you.
It may look like you're making progress and that you're about to build a great business because you're getting all this attention and prospects interested in your service.
As soon as you throw a price tag back on your service, you'll start to wonder where all the prospects went.
See, working for free and positioning your products or services for free will attract (more often than not) the wrong clients.
You'll attract the cheapskates who are looking to get something for nothing.
You'll attract those who were never going to pay or convert at the end of the free trial.
In SaaS, offering a free trial, or a freemium model is not a bad idea.
In SaaS, it makes sense to do this.
With an agency, having a free trial may not be a great idea.
In fact, the free trial participants you get will most likely expect too much from you and still find flaws in your service.
Those who pay a premium are usually the ones that are less likely to micromanage you and give you the freedom to carry out your service as you see fit.
Don't get me wrong, not every client is like this, however, you will attract a lot more of these through working for free.
Massive time investment
This is one of the most important things to me.
Reading some of my other articles, you may have heard my mantra:
If it doesn't make me healthier or wealthier, stop it
This originated from the realization that my time is extremely valuable and that I should only spend my time doing things that will benefit me.
When we look at the pros of working for free, we see that there are actually strong arguments why working for free is NOT a waste of time, right?
However, I'd argue that in many cases, you're not going to be getting great results, you're not going to be getting lots of exposure, you're not going to get great testimonials and so your time would have been better spent on finding a paying client.
You may hear the person or company you want to offer your service for free to mention how 'this will benefit you,' but usually, this is all an understatement.
It's sort of like school when they used to say doing a certain subject is more beneficial.
Or they'd say you can't go to university and study politics if you do something like art in college.
It's all a lie. It was a massive disappointment to realise that you can do any subject you want no matter what you did or got in college.
In many cases, you'll be working for free and not getting a lot back from it.
Start valuing your time and others will also value it too.
In order to get larger, high-paying clients, you must know how to confidently approach them and offer to solve a problem that they haven't managed to solve themselves.
In some cases, they'll ask you for testimonials and it would be beneficial to have them.
If you don't, you'll want to be very honest and upfront.
Let them know that you're new to this and looking to help them with your service.
What I had in my agency was a full 30-day money-back guarantee which clients were free to exercise whenever they saw fit.
This would help prospects put more trust in you and your ability to deliver on your promise.
A 30-day money-back guarantee is a lot better than offering your service for free.
Now it's time to decide whether you want to offer your service for free or not.
As we mentioned earlier in this article, you're going to have to make this decision yourself because only you know what's best for you and your business.
Tell me what you think in the comments below.
Do you think offering your services or products for free is a good idea? Why?
Till next time,