I don’t offer “mates’ rates” – and here’s why.
What are mates’ rates?
I first came across mates’ rates as a child, when tradespeople would offer their friends a service for less than their usual price. Friends get a bargain, but the business owner takes the hit.
For small business owners like me, margins are already tight. Offering friends cheaper rates would be a one-way street: yes, my mates would benefit, but I’d be out of pocket.
How do you break the news to your mates?
Have an honest conversation. Your friend probably hasn’t thought about how mates’ rates affect you and your business.
Gently remind them that you’re running a business, NOT a hobby. Let them know how hard it is to start and grow a successful business, and how many costs are involved – materials, rent, website fees and more. Explain that small businesses need lots of regular support, and that sharing your business or services means the world to you. Share your passion for what you do. Most people will understand.
What could you offer instead?
Instead of mates’ rates, why not try:
- a thank-you reward for each referral that leads to a booking
- a simple request for an honest review (if you offer anything in return, it must be for any honest review, not just a positive one – and it should be disclosed)
- if they have a small business too, sharing each other’s services
- a loyalty offer for repeat customers – for example, buy five, get one half price
Next time someone asks for mates’ rates, have an honest conversation about what discounting your work really means, and how it affects you and your small business. You might also find my post on pricing yourself and your business helpful.