I don’t offer “mates’ rates and here is why:
What are mates’ rates?
I first came across mates’ rates as a child and it would usually be a trade business offering a service at a lower price than usual to their mates. Now that’s great and if you do pay taxes and get the money without putting the income through your books, then the extra cash could save you tax money. So it was a two-way street back then.
But what happens to small business owners such as myself? My business does not earn enough money to be paying taxes, so offering my mates cheaper rates would be a one-way street. Yes, my mates would benefit but I’d be out of pocket.
How to break the news to your mates?
Have an honest conversation with your friend. Your friend probably hasn’t even thought about how mates’ rates affect you as a small business owner and your business.
Explain to and remind your friend that you are running a business and that this is NOT just a hobby. Let them know how hard it is to start and grow a successful business. There are many costs involved such as materials, rent, website costs etc. Remind them that small businesses need a lot of regular support and that sharing your business/service means the world to you and your business. Share your passion about what you do with them. Most people will understand.
What could you offer instead?
Instead of offering ‘mates’ rates’ try this:
- £x cash/or discount if they write an honest and positive review about your services
- £x cash for each referral that results into a booking
- If they have a small business, too, share their info and they share yours.
- Loyalty cards may work for some of your classes, too. Buy 5 get one half-price…
Next time someone asks for ‘mates’ rates’ have an honest conversation with them about what it means to discount your work and how friendly ‘mates’ rates’ really are and how they affect you and your small business.