There are no shortage of YouTube videos online that answer this question, but admittedly there is a lot of nuance. So what I’d like to do here is give you my overall opinion on working for free and then tell you if that played a role in starting our company.

IF YOU’RE GOOD AT SOMETHING, NEVER DO IT FOR FREE

There is a great scene in Mad Men where Don Draper meets Conrad Hilton in the Presidential Suite of one of his hotels. In the scene, Conrad asks Don for free advice and Don says to him, “You wouldn’t be in the Presidential Suite right now if you worked for free.”

There is a well-known saying that basically says if you’re good at something, never do it for free. I mostly agree with this. Of course, there are situations where you help someone in need, but at its core, this phrase is basically saying, “Get paid what you’re worth".

The balancing act comes into play when you’re good at something, but no one knows it. An example would be if you really understand human behavior—and you can use that to help companies reach more people—but until you build a portfolio and have happy clients, few are going to know your true value. You may have to start small and work at a discounted rate in order to build that portfolio. However, there’s another option.

IF YOU CAN SELL, YOU WON’T NEED TO DISCOUNT

I think the biggest mistake companies make starting out is discounting services. Let me be clear, if you have someone who’s purchasing $10,000/month in services, by all means, give them a break, but some companies stink of desperation and they will start offering discounts as a part of their pitch. If you’re trying to sell someone your Facebook management services, is $800 instead of $1,000 going to make a difference? If it is, chances are they won’t be a long-term client.

Sell your services—show them your value—and you will find the right clients. Pricing is obviously important but don’t lead a pitch meeting with “Our services are normally $1,000 but for today only we’re marking them down to $750.” That has all of the allure of a sweaty car salesman that is trying to hit a quota—it’s obvious. Don’t do it.

WHAT DID WE DO?

This is difficult to write as we haven’t “been doing this” terribly long. But in our first “pre-months” of the company, we tried to find small businesses and give them a value upfront. It went something like this:

1. Prospect (find businesses that need help)

2. Pitch (show them the problem, and provide a solution)

3. Demonstrate value (pricing and ROI)

Nearly every time we were about 30% cheaper than any other company, but we didn’t lead with that. It was an afterthought because if they didn’t see the value of our services and the pricing, then they weren’t right for us. We never wanted to be desperate and jump on the first company that came about. Getting a client just to say you have one is a poor way of conducting business. We only want good clients, so that’s what we search for.

SHOULD I DO IT FOR FREE?

Doing things for free is a great way to build your portfolio and demonstrate your talents. However, if you can show the value, then they should show the cash. If you’re starting a marketing agency I would steeply discount services upfront compared to other firms, but don’t make that a part of the initial sales pitch. Use it as a closing factor or as a nicety that they can see for themselves, but don’t stink of desperation—you’ll wind up with a dozen clients who expect Dom Pérignon but are only paying for Kroger Brand Champagne.

That’s too stressful and a quick way to go under.

Do it for free if it’s a good long-term move. If you’re worth it, get paid for it. If you’re still learning, eat some crap up front and pay the price for the education—then start charging a little more each time as you learn something new.

Hope that helps.