Friends and Pricing

April 2007

Because you’re in the business and he’s not, a good friend of yours wants you to put an addition on his house. Do you do the work or not? If you do, do you change your rates for friends?

We try to recommend quality contractors who are specialized in the particular type of work needed on the house. We then offer to review the drawings, help evaluate the estimates and try to make sure our friend gets a quality job and that his contractor also is treated reasonably and fairly by our friend. It is much easier to turn down a friend on his house since we are specialized in commercial projects; his offices, on the other hand, turn into a special, priority project with special supervision and good and reasonable pricing—not special, if we are going to get paid on time. Friends are difficult to work for, and each one needs to be treated with special care because they are friends, not just acquaintances.
—Renny Huntley, WeKanDo Construction, Inc., Puerto Rico

Get the pen out and sign my contract! Business is business. I would definitely pursue the work. I might offer a token discount depending on early payment terms or on the possibilities for future work. He would have to be treated just like any other client.
—Jonathan Diepstra, Estimator, The Bouma Corporation, Grand Rapids, MI

I don’t change my friends for work and I refuse to work for free.
—Rick MacDonald, Master Applicators, New Brunswick, Canada

If I was doing room additions then I would hope that my friend would call me. I would charge the same rate as anyone else; we have to make a living. I would look for some ways to save the friend some money.

Do not change your rate for friends; friends are exactly that—friends. Business is business. Just because you know me, don’t expect a bottom feeding number for the Cadillac job. I’d rather stay home and go fishing. Anybody can give it away, but since when does quality and low price come in the same box?
—Clay Goodwin, President, Chesapeake Waterproofing (specialty trade contractors), Baltimore, MD

We don’t do the work if it is more than a few hundred dollars for friends. At that size of job it doesn’t hurt to give a big discount. Business is just business. We feel good friends shouldn’t be used to grow our business. However, if they insist on our doing the job, then we don’t give too much of a discount if there is no way out of doing the job.

As a rule of thumb you should never do any work for friends that you would expect to get paid for. However, a room addition is something on a larger scale. If you do choose to take on this job, you need to charge them just like you would any other customer for any aspect of the job that costs you or your company time. If they have an issue with that, ask if they would devote the same amount of time at their job for reduced or no pay. You may try to save them money on materials or give them priority. Those perks do not cost you time, which is your most valuable asset. After all, like all your customers, it’s really your knowledge and skills he wants to use.

Sure I’d do the work for him. A good friend should get a discount. I would expect him to do the same for me. After all, that’s what friends and relatives are for—to take up your time and cost you money!!!

Tough question. I have learned to not change rates. I have to feed my family, and I don’t ask my acquaintances for discounts from their profession. Nope. No more.

Yes. Yes.
—Mark Cline, President, Plaster, Inc., Garland, TX

First, you must explain that your company is not the cheapest there is and that you would only do it if he is wanting the best quality work he could get. Then put your best crew on it and charge the rates you would charge your best customers. As always with new customers, charge a deposit and bill monthly in advance, so no problems can ever exist with payment. We have found this to work very well for all parties involved.
—Brad Hollett, President, Accelerated Construction Co. Inc., Jacksonville, FL

We encounter this scenario frequently—family, friends, etc. We do not discount the work because it is easy to go overboard for family, thereby losing money. Instead, we charge the fair price but go above and beyond with our customer service. They get an excellent job at fair market price.
—Greg Kimmet, Project Manager, CS Stucco and Plaster, Inc., North Haledon, NJ

If you do the job you should charge full price because of two reasons: 1.) If you give him low price he will always think you gave him a cheap job and he will feel like he can’t say anything to you if he is not happy about something, causing hard feelings. 2.) By charging full price you can afford to give him a better than average job and accommodate any of his concerns without losing money, causing you to have hard feelings.
—Jim Canatella, James G. Canatella, Inc., Forest Hill, MD

If he is a good friend all he pays for is the material and helps me with the labor. That way if he isn’t happy with anything he can’t complain. This works for family also.
—Lloyd Maynard, Production Manager, Tidewater Interior Wall and Ceiling Inc., Virginia

If you choose to do the project it will most likely strain the friendship before it is complete. You and or your friend will most likely not feel appreciated at some point in the process. Probably more to lose than gain here. If it has no impact on your company or finances, then consider it. :)

Yes, I’ll do the work at a no profit cost. I’d expect the same from my friends.

No, do not change the rate for friends. Use the same rate scale and the same time schedule. Work is work, and everyone has to earn a living. I have a friend who works at a grocery store, and we don’t get a discount on our food.

I have personally done a lot of work for friends and family, and I don’t change the rate. I will only work on these types of jobs on a T&M basis, so everything is laid out for them to see—exactly what it costs. By doing this and keeping the communication open you will still have a friend or family member when the job is complete.

Depends on how good the friend is, but generally I would charge my cost on a personal residence. If it were a business improvement I would charge my lowest pricing—with minimal profit.

I have learned this one the hard way. If I do something for friends or family, I do it for free. (I have them supply all material). Notice the word "if.” Just because I am asked does not mean I can or will do it. No job is worth losing a friend over, and somehow it has always come back to benefit me.

I would do the work. The rate may be a little lower.

Do not do the work.