Friday, March 21, 2014

The Rules of Freebies, Discounts and Bartering In Your Small Business Part 1

After 7 years of running Madeline Lewis Designs, I have encountered all of these arenas in my business.  Since it's just me, myself and I, there isn't a policy handbook sent down from corporate to help me navigate situations I face.  I have, however, after many mishaps, been able to develop a standard set of rules that can be applied to these situations:

1. Freebies:  You get a call from your good friend asking you to "whip up" a cake for her daughter's birthday or you might be a hair stylist that has a friend ask to stop by so you can trim up her hair. We've all been there... and in my case, I might get a request to throw together a banner for a birthday party.  Let me preface this by saying that I don't think our friends and family have bad intentions asking for free services.  I simply do not think that people always understand what it entails for you to "whip" or "throw" something together.  To be honest, neither did I until my Husband became a lawyer.  I have watched him several times (especially in the early years) being pulled away at a party by someone who had a "quick legal" question.  My Husband is kind and wants to help, so he provides "free" advice. What the questioner does not understand is that the free advice he just gave you would cost you $250.00 if you were sitting in his office.  Now, we can save the topic of thieving lawyers for another post, but those encounters have taught me that it is not okay to assume that just because you have a passion for your business and enjoy your work, you are willing to give it out for free.  It taught me to keep my mouth shut when sitting next to a pediatrician at a social function.  I could have talked that pediatrician's ear off asking about ear infections, the pros and cons of cows' milk and/or breast feeding.  Instead, I let the pediatrician eat his steak. that part of the rant is done.  So what happens if you get a freebie request?  If you are brand spanking new and trying to grow your business, jump on them.  WHAT????? but Stephanie, you just said not to give your expertise away!!!  I know...but you have to be able to develop an expertise before you have the opportunity to give it away.  Do not jump on every single one, just the opportunities that will benefit you in the long run.  Below are a few rules to help you determine those opportunities.

1.  Will the service I am giving away produce a recurring customer?   Let's go back to the hair stylist.  If she gets a friend that can come back to her on a regular basis or has a large social networking group that can refer her, then yes.  Take that opportunity.  If it is your long lost cousin visiting from Arizona that in no way will create local business for you then, no.

If you are doing free work for a potential "come back" customer, there is nothing wrong with making it clear to them that this is a one time freebie that you are offering in order for you to grow your business.  You can say... "sure!!  I will cut your hair, but would you mind posting a selfie of you on
Facebook with your awesome new haircut with a link to my website?"  Odds are (especially if they are your friend) they would love to reciprocate!

2.  Will the service I am giving away grow my business?  Let's take a baker asked to donate cupcakes for a school talent show after party.  Will the participants of the talent show take notice?  Think about who is benefiting?  Are the kids the only ones that will be eating the cupcakes?  Will their parents be able to taste the cupcakes?  Will you have the opportunity to be at the function to hand out your cupcakes?  Are you able to put signage and business cards on the cupcake table?  Will other dessert vendors be there too?

3.  Will this service I am giving away help me learn as a business owner?  Let's take me in this example.  When I started offering logo design, I was looking for every opportunity to design logos.  If I came across anyone needing a logo, even for free, I jumped on it.  A huge amount of pressure was taken off me because I had not taken any money from the client.  During those free logo designs, I was able to learn the ins and outs of PNG files and vectors, how many revision rounds are acceptable and why a tag line is important.  I could have spent all the time in the world making up my own logos, but working with an actual client was priceless and well worth the freebie. 

4.  Community Service. As in every business, it is important to give back.  Providing services for charity is a great way to get your business name out there and do good at the same time.  A word of caution: only do what you can handle.  You want to enjoy working for your chosen charities. Too many in the pot will stress you out and take time away from your paying clients.  If you have not been approached by a charity to provide services, seek them out.  Every 501-C3 can use help in some way.  Think about what you offer and find a charity that you can help.   Our hair stylist can volunteer to do hair at a nursing home; our baker can provide cupcakes to a number of places; and I can create (and have created) invitations for a fundraising gala. 

5.  I felt the need to add one more reason to give away your  My daughter was invited to several birthday parties one after the other.  In an effort to save a little cash, I decided to make the girls personalized notecards.  Little girls love things with their names on them.  One mom called to tell me how great it was that she had something with her name on it.  I give notecards out for teacher gifts, monogram thank you notes for wedding gifts and birth announcements for baby gifts.  I love being able to save money and have a great excuse to create, using my style. 

1 comment: