Client wants me to do him a "solid"

Should I work for free for future benefits in a new company?

[ggmike]

I met with a client today who I know through a former employer. He is starting up a new company and has asked me to do him a favor by agreeing to develop a very basic website for his company while it is in the startup stages. He asked me "as a favor" to please do it for him really cheaply, and has offered to repay the favor by either getting us involved in his company somehow, or maybe hiring us directly (not really interested in that one).

Anyways, after negotiation we both agreed on a price that I feel was quite reasonable both for us and for him (i.e. I'm happy with the price).

At the same time, a project of this caliber is very small and we usually don't take on these projects but I know this guy is very successful and any company he gets involved with is likely to be worth billions in the future.

I'm considering doing this project for free, with the hopes that it will secure his confidence in me and my partner and that it will also emphasize that point that he owes us a favor down the road.

I don't want to send the message that we work for free and that he can get this kind of deal in the future.

What do you guys think? Should I just accept the price we agreed on and do it (not bad for the work). Or just put in some free work now and hopefully have it pay of down the road?

[deejay]

Charge him the agreed upon price. Do not further lower the price if it has been agreed upon.

You might, however, want to throw in a little 'bonus'. Go the extra mile a little.. just make sure he knows about it.

[kotetsurain]

I say go with the agreed price.

[MatthewHSE]

I feel I could give good advice on this question if I knew the guy's name, phone number, address and e-mail . . . likely to be worth billions, you say? ;)

[moneymancn]

No Money . = No respect.
Ask the Shrinks why this is important in their client relationships.Puts gas in the Porsche too I guess!

MM

[chrisnrae]

Stick with the agreed upon price. Coming back a day later saying I'll do it for free shows that you wasted time for the both of you with prior negotiations and that you could have done it for free all along.

I agree with going the extra mile. Get his work done fast, right and add a few extras in if the opportunity arrives without costing you too much in time worked for free.

I understand you're hope is to gain future business, but that isn't a given and you still have bills to pay. So, do an extra good job while charging a fair price that includes a "break" for him (which it sounds like you already did).

You have to place some type of value on your time if you want someone else to as well ;).

[eWhisper]

I think deejay has it right.

Once you start down the road of free services, its hard to know where to draw the line. Just look at how many posts start, "I know this guy, so started doing some stuff in my spare time for free, and now I don't know what todo as it's taking up my time and I'm not getting paid...

[karmov]

Agreed price. People value what they pay money for much more than what they get for free for starters. If you back down from your already agreed price and offer to do it for free, it sets an uncomfortable precedent considering you're expecting to do more business with this person. It will probably also make him wonder how seriously you're taking the project. I know my free work has always taken a back burner when things got busy...

[SEOMike]

I agree to throw in a bonus. Do a little flash widget if appropiate or some extra java to show good will. That would help give him a warm fuzzy feeling.

You already did him a favor by lowering your price for him.

Billions huh? Does his site need SEO? ;)

[gopi]

Why dont you negotiate to get a piece of the company for the work you do if possible? ...

[hazardtomyself]

>>Why dont you negotiate to get a piece of the company for the work you do if possible? ...<<

Agree with gopi. If billions really is the possibility, maybe exploring the "web work for a piece of the action" path would be a good idea.

Or if it makes sense, trade. I trade whenever it makes sense for my business. I trade web work and software development for PR stories from a high profile PR company.

If none of those are options, I say definately stick with the agreed price. Like mentioned above; No Money = No Respect.

[raywood]

Go with the agreed price. You said it's a project outside your normal size range. You said you agreed upon a really low price. Therefore, you have already done a favor. You collect a ticket that can be cashed in for a future favor based upon the way you already bent your normal work rules. Don't cheapen the value of your services. I've been that route, and I won't do it again.

[ergophobe]

gopi and hazard - check your calendars. It's 2004 ;-) (i.e. I don't think "get a piece of the company and get rich on the IPO dude!" is a good strategy)

Is a guy who has created multiple billion-dollar companies going to give away a significant portion of the company for a little web development?

Could he have been so successful in the past without knowing what things are worth?

How do you cash in on your share of the company unless it goes public?

Why can't a guy who has started several billion-dollar companies pay the going rate to contractors? Does he have a construction crew working at cut rates too?

[zulufox]

I say go with the agreed price but go the extra mile.

Doing the work for free says:

"I am helping you get started as a friend or a favor for a friend."

For many people favors are quickly forgotten.

Doing the work for the agreed price but go the extra mile says:

"I am efficient, effective, professional, and skilled. This is my showing you what I can do."

Anyway, if you do the work for free and don't get away thing there could be resentment later when his company is worth "billions".

Doing the work for pay means you can walk away happy and if it comes back to you, good, if he doesnt, you don't care.

[lorax]

Why can't a guy who has started several billion-dollar companies pay the going rate to contractors?

I was wondering the same thing. If you're happy with the price - do it. If you're not- walk away or renegotiate.

[EileenC]

I sure wouldn't do it for free. If he's already agree to real $, don't change your mind now!

If I only had a buck for everytime someone said to me, "We can't afford to pay you much now, but if you work with us on this, we'll have lots more copywriting work down the road." Ugh! It never happens.

By doing the work at the agreed upon price and delivering outstanding service, you are demonstrating that you are a professional. If they really do have more work for you later, or have reason to recommend you, this will help. If they don't, then you haven't given it away for free.

[stealthmag]

You should negotiate any of his carrot-danling (getting a piece of the business) at the same time you agree to your price. If he's really going to be worth "billions" then what are you worrying about.

General business rule is don't sell on price but on value. Stay firm on price, do quality work and like someone said earlier add something on.

[mincklerstraat]

If you're any good, never sing for free, unless it's for a remarkably good cause and you know the appreciation factor is already in the bag. Otherwise, they won't stop talking and won't hear you anyways.

[ggmike]

Thanks for all of the replies. I've decided to stick with my price.

The reason I was wondering if I should do it for free is because this really is a small project and the price I agreed to do it for is actually a very good price in my book (making $200/hr at least).

Why is this rich guy trying to get people to cut their prices? I have no idea, but I think either its because he's rich and thats how he got there, or because he knows what its worth and doesn't want to overpay.

I have no doubts that this guy can deliver, but I'd rather not list names on a forum. I have a feeling that could get me into trouble.

Anyways, I think you guys are right. I've established that my work has a solid value attached to it and any further negotiations will have to take into account the fact that I wont work for promises only.

[nancy144]

Get paid for your agreed price. I have worked for free a few times and I agree with, no money no respect. Also, once you do it they keep asking for more and now they expect it for free. GET THE MONEY!
Nancy144

[SkyDog]

I would recommend a combination of pay and equity. But get it all in WRITING first. I went in on a similar venture a few years back, no money, all equity, verbal agreement with people I trusted. The business grew alot last year, I saw no money. This year the "owners" sold the company including the website and software that I developed. I didn't make a dime -- they cleared 6 or 7 figures.

[Leonidas]

If he's a successful entrepreneur, he'll know that it's his job to keep the money flowing. He should also know that "if he pays peanuts, he'll get monkeys".

Personally I avoid people offering too many freebies: I want them to be properly motivated to do the best job they can, in time frames that suit me. That's the way to launch quickly and effectively in a fast-paced business like this one.

Negotiate a fair price and give exceptional service. That's the way to earn respect.

And if that's not good enough for him, stay well clear: intense cost-consciousness is a feature of large, mature, commodity business, and not of fast-changing, dynamic businesses like ours.