Should freelancers work for free or barter their services?

Credit: Mediabistro

There is definitely value in working for free.

Just ask my friend Johnny, who will tell you about the time he “volunteered” to work for a bestselling author. Today, Johnny manages the sales and marketing for the author’s coaching group — one of his clients — and went on to double the membership numbers and revenue of this business in just over one year.

But, the sad truth is: Most new or aspiring freelancers don’t offer to work for free or barter their services with big names and big brands. Instead, they do so with significantly smaller businesses and organizations.

Whether you’re a full-time or part-time freelancer, working for free or bartering your services paves the path for one of the three main reasons freelancers fail: not thinking, acting and operating like a business.

Think about a new restaurant that opens in your neighborhood. Let’s say the owner is a new chef who just finished his culinary degree — in other words, he doesn’t have much “professional” experience.

Does this mean there’s an expectation from potential customers that he’s going to offer food for free until he builds up enough experience and credibility? Can you imagine walking into his restaurant just after it opens and offering to, say, clean the dishes in exchange for free food? Do you think he would agree to this arrangement, or any other barter deal?

Absolutely not.

When you take yourself out of the equation and picture other businesses offering products or services for free, or via barter, you start to realize just how ridiculous it seems.

Sure, a new business might offer a discount to new customers in order to get them in the door, and they might price their products and services lower than competitors in order to create leverage, but new businesses — whether a restaurant, plumber, dry cleaning service or anything else — don’t barter or offer their products and services for free because it’s not how you build a business.

To build a successful business, you need to generate sufficient profit, which is determined by total revenue (how much money you take in) minus expenses (how much you spend to operate the business). Therefore, you’re in the negative if you offer your services for free. There’s something very important you should know about businesses that operate in the negative: They don’t last very long.

“But Josh, I don’t have any expenses right now,” you might be thinking. “It’s just my time.”

Even if you’re not paying for website and email hosting, business cards, a business license and anything else that takes money out of your pocket, you’re still spending time. And across the board — but especially in the world of service providers — time is money. Therefore, if you spend time and don’t get paid for it, you’re in the negative.

The other issue with barter or working for free is, these arrangements create a vicious circle of self-doubt and upward immobility. The most successful freelancers exude confidence in who they are and what they do, which means they know what their time and expertise are worth, and they sell them accordingly.

Two side notes: First, expertise is not defined as knowing everything about a subject; according to Tim Ferriss is his bestselling book The 4-Hour Workweek, an “expert” is someone who knows significantly more than the average person about a particular subject. In this case, you’re an “expert” because you know significantly more about your field than your potential clients, which is why they entertain the idea of hiring you, or sometime like you, in the first place.

Side-note number two: Fake it until you make it. Instead of feeling like you need to know everything before you can start, just start. It’s perfectly okay to jump and grow your wings on the way. Price your services according to your levels of expertise and experience, but price them — even if it’s close to minimum wage, or not too far from it.

(Now, back to our regularly scheduled programming.)

When you don’t exude confidence, clients pick up on it and treat you as such. This dynamic creates a vicious circle of self-doubt, which pits yourself against yourself every time you have the opportunity to work with a new client.

Plus, clients always have money (otherwise they wouldn’t be in business). The question is, where are they willing to allocate it? The answer: to areas in which they perceive value, areas that will potentially drive results they desire. To create perceived value, you must be confident in your ability to produce the desired results of your potential clients. Start small with what you can promise to produce, of course, but start somewhere.

Here’s something else to consider: What happens when a potential client asks for references, only to learn you’ve been working for free or on a barter arrangement with other clients (your references)? Don’t you think the potential client will want a similar deal? After all, why should a potential client pay for your time and expertise when other clients aren’t doing so?

Working for free or bartering your services sets a debilitating precedent that will be challenging to escape when you want to start charging cold, hard cash for your time and expertise.

If that’s not one of your goals — to maximize the value of your time and expertise — why are you freelancing in the first place?

P.S. I wrote this post on my iPhone while in an Uber. There’s always time to get things done. It just depends how creative you want to get with it.

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