Small Business Owners: Don’t Work for Free

For sale sign

Many business owners find themselves in the trap of working for little or nothing, lured on perhaps by negotiators from other companies who say if they like the products or services they receive they’ll be willing to pay in the future, or that publicity for the small business will get out through their relationship.

A small business owner may also be in a no-profit situation because he tells himself that the experience from a particular job or relationship will prove valuable.

But small business owners who’ve tried it say that working for free, at a too-low price, or taking on projects your enterprise was not designed for is no way to run a business.

Some owners get lessons in good business practices 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 needed. —Joyce M. Rosenberg, Associated Press via app.