Are you subsidising a crappy business?

I wrote a couple of weeks ago about discounting when it comes to charities and not-for-profit entities, and in today's blog I want to talk to you about discounting again.

But this time I want to talk to you about discounted rates for your clients.

Tell me if this sound familiar?

"I haven't put my rates up for xyz client(s) because I know they are struggling."

Covid aside, there are generally 3 reasons why businesses are struggling:

1. they're not charging enough

2. they have a product or service that there is little or no demand for

3. they're taking too much money (drawings) out of the business

For 1 and 2, if they're open to receiving advice from you and their accountant or business coach, there's hope for them.

But if they're not willing to listen and take action from others who have their business best interests at heart, then ultimately they're running a crappy business that has little chance of succeeding.

Even worse, is when the business is struggling because of #3, they're taking too much money out of the business.

A sense of entitlement often accompanies this.

Or desperation - perhaps they're simply living above their means. Their personal expenses are simply more than the business can sustain.

In any of these cases, they essentially have a crappy business and so any discount you give them is subsiding their crappy business.

And if they are one of the ones whose business is failing because they're taking too much money out of the business, then you are subsidising their above-their-means lifestyle.

You are a small business too and you deserve to be paid what you're worth and valued for the work that you do.

If you weren't working for them you'd be working for someone else at your market rate.

The cost to you is literally the difference between that market rate and your discounted rate.

That's how much you're subsidsiding their crappy business (and their lifestyle).

Still feel like discounting your rate for them?