Helping a friend can often set you on the path to running your own business. You might help a friend build a website, or start walking your neighbour’s dogs. Perhaps you make some cakes for your son’s birthday, and a friend asks if you can make some for her kids.

And then you think, “Maybe I could start a web development/dog walking/cake baking business”.

Some of best small businesses I know started out this way – including mine.

When I decided to go freelance, I built any number of small websites for chums, and wrote copy for a lot of my friends small business. It was a great way to hone my skills with a forgiving audience and earn some clients for my portfolio. And my friends got my services at rock bottom rates, so it was win-win.

Throwing some work your way

Hopefully as your business grows your friends will send more work your way, either through recommendations or by asking you to work for them directly.

It’s always a good idea to reward your friends for any recommendations they give you. A nice bottle of wine, a crème egg or just a thank you card works wonders.

For good friends you may consider offering ‘mates rates’ (reduced prices) for your services to sweeten the deal, providing a small discount, or even giving them a little extra help for free.

You don’t have to say ‘yes’

Once your business is up and running, if a friend asks you to do a cut-price job it’s time to think about whether you can afford it.

I’ve had any number of friends ask me to do work at a fraction of what I’d normally charge, and for a long time I felt obliged to say ‘yes’.

In the past few years at least three ‘friends’ have asked me to build websites for their new copywriting businesses. (Yes, I’m a copywriter too.)

The kicker? They wanted me to do it as a favour.

Crazy huh?

But you know what’s even more crazy? I did it.

I did it because they were friends, because I wanted to help, and because I wanted to be nice.

But to be honest it just left me feeling a little fed-up.

Think about it. If a friend asks you to do a job for $400 when you’d normally charge $1000, you’re essentially giving them $600 of your earnings.

Can you really afford to be giving your chums cash handouts?

Or think of it another way. If you cut your costs for your mates, you’re essentially working for nothing some of the time. Those are extra hours you could spend exercising, playing with your kids, reading a book or just chilling out. But instead you’re spending them doing free work for your friend.

Embracing the ‘no’

Now of course you have to judge each project on its merits. If it’s a close friend and you genuinely want to help them, you may well say ‘yes’ to a lower rate. But if the call comes out of the blue from someone who sat four desks away from you at a job eight years ago, the answer will probably be ‘no’.

Working for free is dangerous. The boundaries disappear for you and your pal, and it will be almost impossible to start charging them later on.

Instead, explain your rates to them, and only offer a small discount if it feels right (and you can afford it).

Or just say ‘no’.

When it comes to friends, you’re better off saying ‘no’ than resenting the work you’ve done and destroying the friendship.

Saying no is good for business

One thing to be aware of: many of your friends won’t really understand what you charge, and will genuinely feel they’re doing you a favour. They won’t realise they’re asking your to give away your money, or that you have enough work already. So tread carefully. Manage expectations, be honest, and be realistic.

Don’t fall into the trap of feeling you have to help everyone. Because every time you do these jobs, you’re essentially making a loss.

And that’s not good for business.

Have you learned to embrace the no? How do you deal with friends who ask you to work at a cut-price rate?

• Kate Toon is an award-winning SEO and advertising copywriter with over 18 years’ experience. She’s also a well-respected SEO consultant, information architect, strategist, hula hooper and Crème Egg-lover based in Sydney, Australia.

Tags: Friends, Kate Toon, Mates rates, Negotiation