Working for Free

February 13, 2011 at 11:49 pm 3 comments

As an entrepreneur, you will receive many, many opportunities to work for free. You may feel compelled to take all the unpaid work you can get when you’re first starting out — after all, it can be used “for your portfolio,” right? What’s the harm?

Potentially: your business will not get off the ground as quickly as you’d like. The more you work for free, the harder it will become to charge people any rate at all, let alone a fair rate. This is particularly true for entrepreneurs who are doing labor-intensive work like graphic design.

There is a great flowchart called, appropriately, “Should I Work for Free?” at (also appropriately) shouldiworkforfree.com. It boils down to this: if you can get (real) karma points, or if it’s your mom’s garage sale flyer, go ahead and consider it. In all other instances: say “no,” or at least think it through really carefully.

There have been entrepreneurs burned by starting out at a too-low price and having to face making an increase. Inc magazine recently featured a case study on Chargify, a company that helps businesses handle online billing. Chargify promised its initial customers free service, charging a fee only once a business exceeded 50 customers using the service. Chargify assumed its clients would grow along with the company, but after one year saw only 1% paying anything. The rest of their customers were hobby entrepreneurs and others who simply didn’t bill more than 50 customers per month. When Chargify changed its pay model to require all users to pay, an uproar ensued.

That’s not to say you can’t be creative about how you do charge for your work. NPR today featured a musician who, among other things, has earned $300 in one week composing custom theme songs at $20 a pop.

Studentpreneurs: Have you encountered a work-for-free request? How did you handle it and how did it work out? Established entrepreneurs: what is your sage advice about working for free? Are there other (perhaps innovative) ways to get the word out without giving a handout?

-Dr Evans

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Entry filed under: In the News.

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3 Comments Add your own

  • 1. alexandriamisr  |  February 15, 2011 at 12:32 pm

    I see working for free as a type of free advertising. If it is something that will not cost much and will get your work and name out there, I think it should be done.

    Reply
  • 2. Karen  |  February 15, 2011 at 12:45 pm

    Good point! Working for free can certainly be a way of demonstrating who you are and what you can do.

    The trick is to do free work for the right audience. If you are planning to be a website designer, go ahead and design something for your sister’s business — then put it in your portfolio as an example of your work.

    On the other hand, if a company approached you and asked for a free website, you want to think for a moment. If they are going to give you some credit but not help evangelize your work, is it worth your time?

    Time is an entrepreneur’s most important — and limited — resource. I think you need to balance the value of your time with the value that working for free will bring you.

    -Dr. Evans

    Reply
    • 3. amapes  |  February 15, 2011 at 9:42 pm

      I think that free work is advertisement, but also experience. It takes many jobs and or projects to gain the experience customers are looking for. In the environmental industry most government bids require bidders to be in business for more than a year and provide a list of 3 most recent similar work projects. It would be hard in some industries to work for free, but at a discounted rate to build that reputation might be required.

      Andrew

      Reply

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