As a tradesperson, you offer essential in-demand skills. Friends or family members have likely asked you to do work at a discounted rate, which might seem like the friendly thing to do, but is it always the best decision?
We explore the pros and cons of offering discounts and how to navigate these requests.
What are mates rates?
The dictionary definition of ‘mates rates’ is ‘A cheaper price than normal because the buyer is a friend’. It’s a kind gesture we show loved ones and acquaintances, but it’s become an expectation for many when they need work done by someone they know.
Research reveals that 81% of people in the UK expect discounts when hiring a friend or family member for trade work. This expectation puts significant pressure on tradespeople to provide reduced rates, even when it might not be in their best interest.
What are the impacts of mates rates?
While offering a discount might seem like a nice thing to do, it can have serious financial implications for your business. On average, tradespeople lose over £1,400 a year as a result of working for free or at a discounted rate. When you consider that small businesses often operate on tight margins, this loss can be significant.
Beyond the financial impact, offering mates rates can also have an emotional impact. Many tradespeople report feeling uncomfortable when asked for discounts. In fact, more than a quarter (26%) say their relationships with loved ones have been negatively affected by saying no to such requests.
Why consider offering mates rates?
You might consider giving friends or family a reduced rate for a few reasons:
To help out a loved one in need
If someone close to you is struggling financially but needs essential work done, offering a lower price can be a kind gesture.
To get referrals and word-of-mouth marketing
Happy customers are more likely to recommend your services to others. This can lead to new business opportunities.
To fill gaps in your schedule
If work is slow, a discounted job may be better than no job at all. It at least brings in some income and keeps you busy.
To gain experience
If you’re just starting out, mates rates let you practise your skills and build a portfolio of completed projects.
What are the downsides of discounting your prices?
Here’s why you should think twice before offering that discount:
It can hurt your bottom line
Every time you offer a discount, you’re cutting into your profits. Offering too many price reductions can put a strain on your finances.
It can set a precedent
If you give a discount to one person, they may expect it every time. They may also tell others, who will then also expect mates rates.
It can devalue your work
Constantly giving discounts sends the message that your time and expertise aren’t worth the full price.
It can strain relationships
Mixing business with personal relationships can get messy. What happens if there’s a dispute about the work or the friend doesn’t pay? If anything goes wrong, it can damage your friendship.
Factors to consider before offering friends a discount
Before giving mates rates, it’s essential to weigh several factors carefully. First, make sure you fully understand your costs, including materials, labour, and overhead, to guarantee profitability even after the discount.
The size and complexity of the job should also guide your decision—smaller jobs may warrant a discount, but larger projects might not be financially viable. Additionally, consider your relationship with the person asking for the discount. You might be more inclined to offer a deal to a close friend than a distant relative.
Finally, assess your current workload. If you’re busy, discounts may not be necessary, but offering a reduced rate could help fill your schedule during slower periods.
How to handle requests for mates rates
Here are some tips for responding to friends and family the next time they ask for a reduced rate:
Be firm but fair
Explain that you’d be happy to work with them but aren’t able to offer a discount as your costs remain consistent. Mentioning your expenses helps them understand the financial realities of running a business.
Suggest other options
If your rates are outside their budget, recommend other tradespeople who may charge less. This keeps your pricing intact while still being helpful.
Explain your reasons
Share that you don’t offer mates rates because it alters expectations on both sides and could negatively impact your relationship. A true friend will understand.
Mention your value
Don’t be afraid to emphasise your professional skills and competitive pricing. You’re great at what you do, and your rates reflect that.
Tradesman Saver: Your trusted ally in insurance
Offering mates rates can be a gesture of goodwill, but it’s essential to approach it with caution. By setting clear boundaries, being transparent about costs, and maintaining professionalism, you can navigate the complexities of mates rates without compromising your business.
At Tradesman Saver, we understand the importance of doing what’s best for your business. The right insurance coverage is essential to protect your livelihood from risks like accidents, injuries, and damages. That’s why we offer comprehensive insurance packages tailored to the unique needs of a wide range of trades. Our public liability insurance starts at less than £54* per year, providing peace of mind at an affordable price.
Get started with Tradesman Saver today by contacting us or getting a personalised quote.
Tradesman Talk
Have you faced challenges with mate rate requests? How do you handle them? Share your experiences and tips in the comments below!
