Business is business. In Botswana, this hackneyed phrase has become a war cry in a battle of wills. It’s a kinship cold war, and battlelines have been drawn between “strictly business” entrepreneurs and their “what’s -a-few -freebies- between- friends?” freeloading relatives and friends.
Here is a scenario of what leeching friends and relatives expect from their entrepreneur kindreds: Imagine you and I are friends. You just opened a new restaurant in Gaborone. You invite me over during opening week. I bring a friend. We order a nice bottle of wine and have a great meal. You don’t let me pay the check. “Your money is not good here. It’s on the house,” you say. “I just really appreciate you coming by and supporting me.”
When you start telling friends and family about your new small business, at least a few of them are bound to ask perhaps only partly in jest about a “family discount”. We have all proudly supported our friends or family members who are creating something new- be it a business, service, or product. They have quit their mind-numbing day job and are starting to pursue their dream. Shortly after that the requests come in. Or rather, the sweet, “unassuming” expectations from loved ones come in. The expectation that they would get freebies since they are friends.
Dr Poloko Ntshwarang, senior Social Work lecturer at the University of Botswana says, “Given this reality, how exactly can entrepreneurs figure out how and when to charge for their work? Overcoming a fear of boundary-setting can be incredibly challenging for most. It’s particularly hard because they want to be viewed as doing good work. Toeing the line between friendship and professionalism requires a well-defined framework, a steadfast understanding of your own personal and professional value, and an unapologetic commitment to your own boundaries. It might feel scary at first, but it is doable. If you really break down all the time, money, and effort that goes into your craft, you’ll realize just how much you’re losing by doing free work. You have to get to a point where you are confident enough in your work to think that anyone not willing to pay is crazy.”
It is important to realize that as an upcoming entrepreneur, you aren’t lending someone a stick of butter or a giving them a glass of milk. You’re spending your precious working hours on a project for them at a discounted rate, when you could be bringing in more money from another customer. The people in your life have the opportunity to support your new venture, and they are getting your best work out of the deal. Growing into an entrepreneur means you need to be both consistent and confident with your finances. The way you present yourself shapes what and how other people think of you. If you present your job as simply a fun hobby, your friends and family won’t want to pay you top dollar for your services. However, when you can easily quote the cost of a project to a potential client, whether that person was in your wedding, is your best friend or happened to stumble upon your website last week, you are bound to be taken more seriously. No matter how much you love the people in your life, if you are the one offering the discount, you’re undercutting yourself. It is likely to be perceived that you lack confidence in your expertise and your services if you are telling them the price with a big disclaimer that screams, “I don’t deserve this percentage of that money, and because I happen to know you in personally, I’ll only take the measly amount that I do think I deserve.”
Dr Sophie Moagi, clinical psychologist in Gaborone says, “Support means paying people fairly. The only way to truly support a new business is to pay the full price. There is a minimum amount of money you need to make in order for your business to be profitable. If you’re charging below this price, then your clients are not supporting you, you’re supporting them by giving them a portion of your work for free. When you work for a discounted price, you’re paying an opportunity cost. Opportunity cost simply means you’re losing the opportunity to do something better with your time. For example, you may book a project at a discounted price, and then a week later get an inquiry to do a project you’d be able to charge the full price for, but now you can’t because you’re too busy. If you’re struggling financially, you can’t afford to give out discounts. You may think “I’m only giving them my time, not money” but you’re giving away your earning potential.”
Receiving a discount is nice but irrelevant if you genuinely value a product or service. Paying full price doesn’t mean that much to you, it is not going to change your life all that much. But it means a lot to your friend. It really does. Moreover, it is not about the money. It is about validation and feedback. Although you are a friend, it’s always a magical moment for an entrepreneur to have someone pay them for creating value. It’s like when you got your first job and received your first pay check. It has high emotional value. On a normal day a person wouldn’t walk into a fashion store and expect to walk out with free clothes, so why do friends and family get this idea. Other entrepreneurs choose to not give their friends and family a discount on services, but instead sell them products at wholesale price. That way their time, which is really what they are selling, is not devalued.
The topic of charging friends for professional service is a murky one. And, for many entrepreneurs, it is an uncomfortable scenario that comes up all too often. For freelancers and small business owners, being asked to perform odd services for friends can be a persistent dilemma. And, for many people, setting appropriate boundaries that separate friendship from their professional lives is not always an easy thing to do. No matter the approach, setting boundaries with friends and family is a challenge and can be extremely triggering for some as they deal with feelings of guilt and a fear of seeming selfish.