Page 5 - Upper Peninsula Business Today -- July 2019
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JULY 2019 UPPER PENINSULA BUSINESS TODAY PAGE 5
It’s A Mistake To Work For Free
By Joyce M. Rosenberg AP Business Writer
NEW YORK (AP) — It’s a situation many new business owners land in — they’re so anx- ious to find customers and clients that they work for little or no money. Or take on projects they don’t like.
These owners hope to get referrals, build a portfolio or get photos and testimonials for their websites. Instead, they wind up with a lot of grief and regrets.
Elise Gelwicks recalls feeling desperate for clients when she started InternView early last year. Gelwicks, who helps companies create internship programs, hoped that working with- out pay would allow her to make connections and lead her to paying clients.
“People who were interested wouldn’t pay me, and I said, OK, I’ll do it for free. I needed the experience,” says Gelwicks, who is based in Chicago. But not only was there no pay, she was- n’t doing the work she wanted — she found her- self helping companies recruit interns.
Many owners find that clients who get cut-rate or free work aren’t grateful, and may in the end devalue the service or finished product. These clients may take advantage of a new owner and keep making more demands, since they don’t have to worry about running up a bill.
“Underpricing is probably the biggest mistake most companies make,” says Laura Willett, a business consultant and lecturer at Bentley Uni- versity in Waltham, Massachusetts. “The per- ception is that your product doesn’t have any value.”
Conversely, owners find when they set a price that’s in line with what other companies charge, prospective clients and customers take them more seriously.
Gelwicks spent six frustrating months trying to turn no- or low-fee work into a growing busi- ness, and finally one day asked herself, “Where is this getting me?” She decided it was time to start charging what she knew she was worth.
“It was terrifying. I went through a period where I didn’t have clients,” she says. But she did find companies that needed the services she wanted to provide, and InternView is now grow- ing.
Liz Mally found misery in doing work purely for the sake of building a portfolio.
“I was taking on pretty much any client I could get, regardless of budget or style, in hopes of gaining experience and getting my name out there,” says Mally, owner of LPF, a floral design company in Detroit. That included corporate clients who wanted dyed flowers in flashy arrangements, not the elegant, understated cre- ations that are Mally’s specialty.
“I absolutely dreaded every second of the design process. I also didn’t want to share any photos of my work because it didn’t fit my aes- thetic, which is the primary way I market my business,” Mally says.
Some individual clients also wanted arrange- ments Mally didn’t want to do. She learned to ask a lot of questions up front when contacted by a prospect.
“That helps me understand ahead of time if they’d be a good fit,” she says.
Some owners get lessons in good business prac- tices from the anxiety-driven mistakes they make early on. Kenny Klein, co-owner of the public relations firm JAKK Media, recalls clients who kept asking him for more work but didn’t pay anything extra. Part of the problem was their written agreement — it didn’t provide for rate increases if more work was requested.
“Since I was afraid of losing their business, I complied more often than not,” says Klein, whose company is based in New York. “This resulted in a tough relationship where their expectations continued to increase and I was very poorly compensated for my time.”
After being caught in this bind several times, Klein started requiring clients to sign specific agreements about how much work would be done, and how he’d be paid if more was need- ed.
When V. Michael Santoro started his digital marketing company, he used several methods including the barter system — trading his serv- ices for another owner’s — to bring in his first clients. But he found that many saw little value in what he had to offer, even though his work made their companies more visible on the inter- net.
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