I thought I would be nice, so I asked him to email a couple of questions that I would answer for him. He insisted that we had to meet and discuss this in person. Well, I don’t even do paid consultations in person any more, so I told him we could set up a telephone consultation and told him my rates. His response? “Well, if you are going to charge me, forget it!”

That is the kind of “customer” that I am more than happy to see go. In fact, I would gladly have given him the names of a few of my competitors so he could waste their time instead of mine. (Nah, that would be bad karma. ;o) )

There is nothing wrong with giving away some things for free, whether you are establishing a new business or you have been around for ages.

I give away a lot of free content, sometimes do free teleseminars and webinars, and answer the occasional question. However, it is important to know where to draw the line, and how to say no to people who want more than you are willing to give. For me, there is a firm line when it comes to giving away my time for little or no return.

Not sure when you should work for free? Take a look at this hilarious flowchart from illustrator Jessica Hische. (Note: The chart includes language some may find offensive.)

And here are some tips to help you figure out when and how to say no to free.

Set limits. There are always people who will call or offer to take you to lunch to “pick your brain.” That is called free consulting, and it is a mistake to do it. If someone calls with questions, and you want to help them, set a limit right up front by saying something such as, “I have 10 minutes right now. If you need more time than that, we can schedule a consultation at my regular rates.”

Leverage the free stuff. Spending a lot of one-on-one time giving free advice is probably not the best use of your time. When you are going to do something for free, look for the activities that will give you the best results and best reach for the time you invest. Instead of having lunch with one of those people who want to pick you brain, hold a teleseminar and invite everyone on your list. Record the teleseminar and give the recording to everyone who signs up for your email list, or sell it as a download or on CD. Spend that hour reaching thousands of people instead of just one.

Limit access. Have someone else deal with your phone calls and emails so you don’t get in the position of responding to routine questions that can become time consuming. That also gives you a buffer so that your assistant is the one saying no to unreasonable requests, not you. Set up a “help desk” (Many webhosting companies, including http://MyFavoriteWebHost.com/, offer free help desk scripts.) and get a virtual assistant to handle inquiries.

Establish a pro bono budget. Just as you set a budget for how many dollars you can donate to worthy causes, set a budget regarding the time you can spend on free work. It is fine to do some unpaid work to help worthy groups or individuals, but you will find yourself overwhelmed with “opportunities” to work for free unless you have a firm policy about how much free work you will do and how you decide for whom you will work pro bono.

Don’t be afraid to ask yourself, “What’s in it for me?” When you are asked to do something without pay, there is nothing wrong with choosing the unpaid work that benefits you in some way over that which does not. If you only have time for one unpaid speaking engagement this month, choosing the one that allows you to speak to a room full of potential customers while turning down another that is unlikely to result in any business for you is the only sensible thing to do.

Only you can decide how much you are willing to do for free. However, don’t get caught in the trap of giving away more than you want to because of the unreasonable expectations of others or because you are unwilling or unable to say no.

Establish a firm policy about what you will do without pay, and stick to it.

The justification for giving away free information and services is that by demonstrating your expertise, clients will see how you can help them and will then be willing to pay you. However, every service provider has horror stories of potential clients who strung them along, getting all of the freebies they could, and never becoming paying customers.

It is up to each business to decide how much they want to give away, and when they will start to charge. Providing free information can certainly be an effective marketing method, but when is enough enough?

Putting free content, such as articles, on your Web site will attract customers and help your standing in the search engines. Articles can also be submitted to print publications, such as professional association newsletters and trade journals.

Publishing articles, online or offline, is a low-risk strategy. You write them once, and your articles remain in circulation indefinitely. They will be viewed by hundreds, thousands or even millions or potential customers. You may even be paid for your articles.

Clients often want to see a demonstration of your capabilities before they hire you. That might mean putting extensive effort into a proposal, or providing them with a sample of your work. Some clients may ask you to describe how you would solve a particular problem they face, or ask for sample copy or design ideas.

How much time do you want to invest in gathering information and preparing custom work in the hope that it will generate business? When deciding how much you will do during the proposal process, consider the value of the client and the likelihood that you will be able to get the contract.

Phone calls from information-seekers can be a problem when what you have to sell is your time and expertise. When does answering a question or two cross the line and become an unpaid consultation?

Some consultants decide that they will answer two questions without charge. Others place a time limit, such as ten minutes, on free telephone calls. For example, you may transition a freebie-seeker into a paying client by saying,  “I can spend ten minutes with you, and if you require more assistance I will be glad to schedule a consultation at my regular rates.”

As an expert in your industry, you may be asked to speak to professional and community organizations. Some pay, but many do not. When evaluating a speaking opportunity, consider if the audience includes people who may become customers or who may refer customers to you.

Of course, in addition to attracting new customers, some free work may even open new profit opportunities for you. For example, free articles and speeches may lead to a profitable new career as an author and speaker.

I found it hard to believe that he gets the fees he claimed, based on what I heard. He may charge those fees, but I don’t believe he gets them. What I mean by that is that I believe he has a fee schedule that says he gets $15,000 per speech, but he actually works for free, a reduced fee or a percentage of product sales. Having a fee schedule that says he is a $15,000 speaker sounds impressive, but if he does not deliver a $15,000 speech he loses credibility instead of gaining it.

This is an example of someone whose resume has outpaced his abilities. That is, his claims are greater than what he can produce.

There is nothing wrong with setting high expectations and promising great things. However, if you don’t deliver on those promises, you can do serious harm to your reputation and your future. This speaker damaged how I think of him with his poor performance, and I suspect I am not the only one who had that reaction.

Don’t misrepresent yourself, especially if your performance will not live up to your representations or your claims are easily disproved.

The first thing you should not let them know is your hourly rate. If you are quoting a price based on a project, then tell them the bottom-line cost. Do not break out pricing based on an amount per hour.

The second thing is related to the first: how much time it will take you to do some or all of the project. The client has every right to know when they can expect the work to be completed; however, they do not need to know how much time you will spend on the project. For example, you may tell them that you will have the finished project to them in four weeks. But they do not need to know that you will spend a total of 35 hours on the project.

The reality is that as a freelancer you may be working on several projects at once. That may mean spending two days this week on one project, one day on another, and parts of the remaining days on multiple projects. That may be because when you reach a certain point in each project you have to wait for something (e.g., client approval, a proof, a quotation from another vendor, etc.) before you can continue, or it may be because you are juggling several projects and trying to keep everyone happy.

So what should you say when the client asks one of these questions? Get them to focus on the results. If you tell them that the thing you are charging $200 for takes you 15 minutes to do, they will think you are overcharging.

They will not consider, and it may be too difficult to make them understand, that it takes you 15 minutes because you have invested in tools and equipment that give you better results in less time, and that your years of training and experience enable you to do a job in 15 minutes that might take another professional hours. They are likely to fixate on the idea that you are charging them $800 an hour, and nothing you say will convince them that you are worth it. On the other hand, if all they know is that this amazing result cost them just $200, they will be satisfied customers.

Keep the customer focused on the value you provide, not how long it takes you or what your hourly rate is. Then provide value that will keep them coming back for more.