When people start their own business, they think that their friends and family members are going to support them. What actually happens, in reality, is that they come seeking mate’s rates. “Mate’s rates” is a common Australian term that refers to giving somebody you know a discount. While it can be our first reaction to want to help out our loved ones by giving them some money off, this is actually not a good business practice. What the people around us should be doing is supporting us by paying full price. A lot of time, money, and energy goes into creating a business, so it doesn’t make any sense that someone who cares about us would want to diminish that. Furthermore, as soon as people start giving out different prices, word of mouth can spread, and a negative brand awareness can be built. For example, nobody wants to be paying full price when they know that their friend received 30% off. Additionally, what we charge in a business is directly correlated with our self-worth. If we don’t believe that we are worth paying full price for, then nobody else will believe this either.

How to have the conversation with a loved one

When someone you know approaches you for mate’s rates, there is no reason to get angry. This is a long-standing custom which is only just now going out of fashion. Many people think they are entitled to a discount when they know somebody in the industry, so it can be important to handle the situation delicately. More often than not, all that is needed is a gentle conversation to change the narrative. For example, you could talk about how much love and passion has gone in to a product or service and that you really want to honour your own hard work by not giving our discounts. Most people will respond to this quite well and will quickly realise how silly it is to ask for mate’s rates. In addition to setting boundaries with what you charge, it can also be a good idea to make sure that you are also never asking for discounts and are supporting your own friend’s businesses by paying the correct amount. If everybody did this, then perhaps more small businesses would succeed. So, the next time someone you know asks you for a discount, don’t be afraid to simply and gently decline their request.