Are Mates Rates worth the friendship?

I have a client who has never once given me "mates rates" nor has he ever asked for them in return. I used to think this was a rather odd way of doing business.

But as I discard yet another difficult client/friend relationship, while calculating the losses to my business,  I catch myself wondering if he perhaps hasn't got it absolutely correct, and we have all got it so terribly wrong.

This is how our relationship works ... I create a website, some print work, and a google campaign, and I send him an invoice which he then passes to his accounts department. I need some car parts, oil or a service, he invoices me. In fact, his accounts department probably has no idea that I'm also a customer. Neither of us provides the other with a discount, additional payment options, or extended deadlines. And neither of us discuss business when we see each other in social situations.

If you analyse the old way of doing business with "mates rates", you will see that your friends aren't actually doing your business a favour at all. In reality, they are using up your generosity and hoping in the background that you don't call on them to return the favour.

So what's involved in a "mates rates" deal? It doesn't just have to be about discounts, it could be about deadlines, priorities, special orders, customizations, and the old favourite ... "I'll owe you."

Whereas when your friend is treated strictly as a client, they know the boundaries. The price is clear, the terms are upfront, and the job reference at the end has more meaning.

Now having said that, I'm not opposed to the idea of having a barter arrangement with a friend's business. Many years ago I needed a custom made fuel tank and the guy that could make one needed a custom made website. In order to keep it all professional and allowing us both to be absolutely clear about what each person was providing ... we supplied each other with invoices marked "paid in kind". By doing this we both not only had ourselves a legitimate tax invoice, but we also knew where we stood in the business arrangement. He knew exactly what to expect from his website and at what point it would start costing him extra money, and I knew exactly what I was getting and the turn-around time involved.

So at the end of the day, I'm saying don't use your friends business, instead choose your friends business. By choosing them, you are creating and income for them, instead of just a workload, and then they'll more likely be able to afford to join you at the pub at the end of the week.


Today's Advice: Don't be the client your friend complains about.
AndyK.