Rob Saric is an experienced entrepreneur that is passionate about startups, product design and all things related to the business of software.

The general answer to that question is no. I highly recommend arriving at an agreement to pay agencies for their pitches whenever possible if they’re going to be providing consultations, storyboards, mock ups, etc. However, if a client is basing their choice simply on your portfolio then I don’t see the need but if there are new ideas coming to the table, they should be compensated for the effort assuming you’ve agreed on the process beforehand.

The core issue here is respect. When you have respect and open communication between client and agency it leads to better work in my experience.  Quite simply agencies produce better work for clients they respect.

Giving free services away in anticipation of future business with that person communicates desperation and gives a perception of low value. If a prospective client does not want to pay full cost – or any cost, for that matter – you may still offer the following:

1.  Quid-pro-quo: Something for something

What of this prospect’s products or services can it offer you in exchange? If none, can the prospect offer you a one-time look at his/her client and contact list, so that you may send a letter, signed by the prospect, singing your praises? If not, don’t give your services away.

2.  Offer to sell the prospect a smaller scale project

Once the prospect has paid for that project and likes the work you did, offer to roll out the remainder of the project for the difference in cost.

3. Be prepared to walk.

In these tough economic times, money’s tight. Resist the temptation to discount or give away. Besides, even if you do win business with this prospect, he/she will be so tough to work with, it won’t even be worth the money, and they’ll detract you from the prospects that do have money for your services.

Spec work (or work on speculation is defined as any requested work for which a fair and reasonable fee has not been agreed upon, preferably in writing) depreciates the product, reduces company morale and sets an uncomfortable precedent for future business relationships. Your investments of time and effort comprise equity.

The exception to the rule, of course, is if you would be offering your services to a non-profit (NPO) or charitable organization that you have a genuine and sincere empathy towards.

Filed under: Entrepreneurship

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