I say this from experience: I’ve worked for free, I’ve charged $25,000 for a half-day of consulting, and I’ve created ebooks/courses that range from $4.95 to $12,000.
I would have never expected the things I learned along the way.
To start, read this fascinating article about how WW2 veterans don’t like the Red Cross.
What happened? The Red Cross originally gave away donuts for free, but later, when they tried to charge for them, people hated it.
What can we learn from this?
First, people hate having something taken away from them — like a free service. Whenever companies originally start off as free, then later charge, there will always be an angry contingent of pitchfork-waving people who are angry that the service isn’t completely free any more.
Second, it’s not always bad to work for free! I’ve done it many times. The key is (1) working for free strategically, and (2) always communicating why you’re doing it.
You work for free to build your portfolio so that when you charge, you’ll have something to show prospects. Ramit’s judgment: Good
You work for free because you think that later you will magically be able to charge the same client $100. Ramit’s judgment: You are dumb
You work for free because you know that the person has a huge network, and if you impress him, he will introduce you to all his friends. You make this explicitly clear up front. Ramit’s judgment: You are very savvy
A good phrase to use when working for free:
“My normal rate is $55/hour, but since I really like what you’re doing, I’m willing to waive my fee for the first 2 weeks. Assuming I do an extraordinary job, after two weeks I’d like to discuss my normal rate. Does that work for you?”