Home – New Forums Money matters working for free – how do I break the habit?

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  • #983935
    Sasha3232
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    I have a conundrum and need some support.
    I do a lot of work with a particular business that contracts me to write content for its clients. In the past, they got me to write content for their own company and then when I attempted to invoice, the director said, oh well we thought since we send so much work your way, you would do this for free. I let it slide and withdrew the invoice.
    Recently I did more work and intended to invoice at a 50% discount. Just after that, and before I invoiced, I made a small error (I sent a proposal to one of their clients instead of to them – the client had not yet decided to go with them but definitely wanted to work with me so it was tricky. But essentially I stuffed up as I should have sent the proposal to the business). As an apology and a goodwill gesture I offered them the work I had done pro bono.
    Then last week I did yet more work for them and had intended to invoice at the end of the fortnight. I got asked to do a rush job again for their own company just the other day and when I sent the output, I was praised, thanked and asked what type of wine I drink. I suspect that means ‘don’t invoice.’
    Inevitably they send me work for their own company that is rush, last minute, and I have to push other client work out the way. And yet they seem to expect me to work for free for them because they send me so much work. Am I expecting too much? Should I do the work for them for free because they feed me work? I am honestly unsure how this works ‘out there’ for other businesses in my position.
    If you don’t think I should be working for free, then how do I break this cycle?
    Thanks for your advice – I am genuinely unsure how to manage this!

    #1144967
    LuckyDip
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    Hi Sasha,

    Why don’t you see if they would be interested in an affiliate relationship where you give them a percentage for the referrals they are providing but still invoice them for the work you are doing for their company?

    Or some form of rebate.

    Just brainstorming.

    All the best,

    Ashley.

    #1144968
    Joel Krause
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    Hi Sasha,
    Seems you’re in a pickle!

    You need to put the foot down. Send an invoice and stick to it. But the other company is now just assuming you’ll do the work for free. Break the cycle. Send invoices.

    Even though they bring you in business, you still need to treat them like a client. If you tell them your position, they should hopefully understand.

    Good luck!

    Joel

    #1144969
    Burgo
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    How much percentage wise do they bring in.

    This type of situation happens quite a lot in some industries, but you have expenses and need to make money.

    If they recommend only a small percentage then feel free to charge
    If is more than 80% then your actually employed by them and therefore send them an invoice for wages

    Just a thought

    #1144970
    CindyK
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    Hi Sasha,

    This is probably a good time to make a change, the beginning of a new financial year.

    I assume that you don’t want to loose them or their referrals. First of all decide if you loose them is it the end of the world? If it is for you then consider not upsetting the apple cart. If it is not – then you go in with the mental upper hand.

    In order to reset the relationship I suggest offering them a good deal in a different way. Referrals are very common in many industries. I scratch your back…. etc. However, in your case it sounds like the referral isn’t any extra – it covers the referrers fee. Essentially you don’t make any extra – is that right?

    Hopefully you get more answers here – but why don’t you try something in an email like:

    Dear .,

    With the new business year we at xyz company are revising our client processes. As word of mouth is so important in our line of work we have decided to introduce a referral commission. This commission will work on (insert either flat rate fee or % based amount). We will be providing this at the end of each billing quarter. By moving to this system we can better understand our client base and be sure to provide the referrals that each business deserves. It will also help us to better identify our internal income and expenditure making our business more secure and more likely to last well into the future.

    If you have any queries about our new system, please feel free to contact us to discuss them.

    Then invoice them next time. Make sure you carry out your commission payments. If they don’t like it, you need to be prepared to loose out on the upfront money – but to be honest, you don’t need to hang on to clients like that forever. We often start with that to kick start the business. If they feel it’s acceptable long term, they aren’t valueing you as a business. They value the work but not your effort.

    That’s my opinion anyway. Hope the other flying soloists refine the ideas!

    #1144971
    Sasha3232
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    Thanks for everyone’s opinions. It’s good to hear how others would respond.
    I probably should have been clearer – I am not really being referred business by them. They are using my services as part of their offering. They charge me out to clients with an uplift to create a profit margin for them. Their profit on anything I do is $40 for every $100 I earn (so they charge me out at $140/h and I take $100 of that). I am generally presented to the client as part of their business. I would say the work I do with them makes up around 40-50% of my workload at the moment, although sometimes it is slower and sometimes heavier.
    I am happy to give them a good chunky discount for work I do for their business but I really want them to pay me for my work. The trouble is, the precedent set was variable – first, several years ago, it was a awww c’mon, do it for free! Then more recently, I did a freebie because I made the error I mentioned. Now we’re down to about 3 hours of work sitting unbilled that I need to make a decision on.
    The brief I got for the last piece was ‘can you dedicate about 2 hours to…’ – that indicated to me that they expected to pay. But then the wine question after I delivered!
    Maybe I should have said, I prefer red wine but actually I prefer being paid even more ;)
    I suppose I am trying to gauge how other consultants would respond so I don’t do anything that would be considered bad etiquette.
    Again, thanks for all your help and you’ve given me some good ideas to go on with. I shall report back on the outcome!

    #1144972
    Sasha3232
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    Oh and thanks also to the person who private messaged me with a set of tips. Very useful. Strangely, I cannot see the private message on here and thus cannot reply. It went straight through to my email but disappeared off here.

    #1144973
    Peter – FS Administrator
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    Sasha3232, post: 166181 wrote:
    Oh and thanks also to the person who private messaged me with a set of tips. Very useful. Strangely, I cannot see the private message on here and thus cannot reply. It went straight through to my email but disappeared off here.

    Hi Sasha,
    Your private messages should be stored in your control panel here: http://www.flyingsolo.com.au/forums/private.php
    Even if they are read they should still be in your inbox.
    If you can’t locate it send me a message and I’ll investigate.
    Cheers
    Peter

    #1144974
    Sasha3232
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    Attached screenshot. I think I had PM’s before, too, but now they are gone.

    #1144975
    The Copy Chick
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    Hi Sasha,

    It’s all very well and good them ‘sending work your way’, but expecting you to work for free for them is a bit cheeky and doesn’t pay your bills.

    I’d be sending a letter thanking them for the opportunities to date, then suggesting a special agency rate for their work, as a way of showing your appreciation for the other work they send your way. Then, it should be treated like any other project. You quote, they accept the quote and pay you like any other client.

    You could even let them know that you’d love to be in a position to help them out however you can, but as a sole trader, you really can’t afford to work for free, which is why you’re happy to negotiate a rate that works for you both.

    It’s always tricky when an expectation has been set, but the longer it stays that way, the harder it will be to change.

    All the best!

    #1144976
    Sasha3232
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    Thanks Anna. The consensus seems to be ‘don’t work for free’ so I think I will go that way! I want to offer them a good discount in recognition of the business relationship but I do need to be a bit more assertive ;)

    #1144977
    ScarlettR
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    I know it’s hard but it’s you who cultivates that relationship and environment. Which means it’s you who has to re-teach them how to work with you and pay invoices on time. If they don’t comply, drop them.

    It’s like being in any relationship. When one party decides they need to change it’s then posed to the other party if they’re going to adapt to how you need to change, or keep acting in the same way. This company may be used to trying to swindle people out of invoices, or it could be several different circumstances have come up where you’ve decided to waive the invoice and that’s taught them that they can try and do it again, and again.

    Everyone else has great suggestions, but just be aware that when you press them they may not respond positively. This isn’t a bad thing, it comes with the territory of change. When you put your foot down you then attract people and customers into your life who will pay your invoices on time, and those who can’t will have to source from someone else who’s prepared to sacrifice their time for free.

    #1144978
    James
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    Sasha3232, post: 166179 wrote:
    But then the wine question after I delivered!
    Maybe I should have said, I prefer red wine but actually I prefer being paid even more

    Try not to read into the wording too much. It can be easy to misread the tone in emails. Perhaps you did such a good job they are offering a ‘thank you’ bottle as well as your fee?

    Admittedly unlikely given the history, but worth considering before typing up a response.

    #1144979
    Lindz
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    Hello Sasha,

    If you look at this from the point of view that you are getting in 40-50% of your work from them without spending any marketing time or marketing dollars then it might help to look on any work you do for them for free as your marketing time.

    If you feel okay with that concept then perhaps you could offer to do one free hour of their work for every xx hours of their clients’ work that they give you.

    That way both you and they would know what to expect.

    All best,

    Lindsay

    #1144980
    Sasha3232
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    ScarlettR, post: 166337 wrote:
    I know it’s hard but it’s you who cultivates that relationship and environment. Which means it’s you who has to re-teach them how to work with you and pay invoices on time. If they don’t comply, drop them.

    It’s like being in any relationship. When one party decides they need to change it’s then posed to the other party if they’re going to adapt to how you need to change, or keep acting in the same way. This company may be used to trying to swindle people out of invoices, or it could be several different circumstances have come up where you’ve decided to waive the invoice and that’s taught them that they can try and do it again, and again.

    Everyone else has great suggestions, but just be aware that when you press them they may not respond positively. This isn’t a bad thing, it comes with the territory of change. When you put your foot down you then attract people and customers into your life who will pay your invoices on time, and those who can’t will have to source from someone else who’s prepared to sacrifice their time for free.

    I think I will try some avoidance tactics, just sending an invoice with a decent discount, and see what they say. :) Thanks for your advice and yes, they might not like it. I guess I need to be brave and give it a shot.

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