Are you running your business like a charity?
From time to time I meet new entrepreneurs or small business owners who have become frustrated with their customer base and how their business has been operating. They have poured in a lot of time and effort to show their customers that they are nice people or feel that they are entitled to support from their customers because their business is helping their community. Whilst it is true that representation is crucial in economic terms particularly representation of businesses owned by marginalised groups it is also important to uphold certain standards that reflect sustainable business practices. For example if you start a business and it starts to struggle due to poor performance and low profits is it fair to start a crowd-funding campaign to keep the business afloat? Aren't business crowd-funding campaigns supposed to be for scaling up, expansion and growth as opposed to survival?
As an entrepreneur, one of the most crucial distinctions you must make is whether you are running a business for profit or treating it like a charity. While generosity and goodwill have their place in business, consistently undervaluing your services can be detrimental to your long-term success.
Many business owners, especially those just starting out, struggle with pricing their products or services appropriately. They may offer deep discounts, give away too much for free, or hesitate to enforce payment policies out of fear of losing clients. Trust me I understand, I’ve been there! You are almost desperate to succeed and also let self-doubt override your sense of value. However while these practices may seem like a way to attract and retain customers, they can quickly lead to burnout, financial instability, and an unsustainable business model.
Take a moment to assess your current business practices. Are you frequently offering discounts beyond what is reasonable? Do you find yourself working extra hours without compensation? Are you hesitant to charge what your services are truly worth? If you answered yes to any of these questions, you might be running your business more like a charity than a sustainable enterprise.
Every successful business has clear pricing structures, well-defined service offerings, and policies that protect its profitability. If you’re unsure whether you’re undervaluing yourself, consider:
Market Research: Are your prices aligned with industry standards?
Client Expectations: Do your clients respect your pricing and payment terms?
Your Own Sustainability: Can you maintain this pricing model long-term without financial stress?
A business that undercharges or frequently gives away services for free is not set up for sustainable growth. If you want to scale your business, you need to have a strategy that ensures profitability. Ask yourself:
What systems do I have in place to ensure a steady revenue stream?
Am I tracking profitability, expenses, and cash flow effectively?
Is my pricing sustainable if I choose to scale up?
One of the most important aspects of business growth is ensuring that your company can attract investment if needed. If your business model is built on inconsistent pricing or undervaluing your work, investors will likely see it as unstable. A scalable business should have clear financial projections, a solid customer base, and a track record of profitability.
Ironically, even the most successful charities operate like businesses when it comes to sustainability and governance. Non-profits carefully track finances, implement strategic planning, and ensure operational efficiency to achieve their missions. If charities do this, why shouldn’t for-profit businesses?
Entrepreneurs need to have tough and sometimes uncomfortable conversations about pricing, profitability, and business sustainability. Being generous is admirable, but it should be done within a framework that doesn’t compromise your financial future.
Running a business means making smart financial decisions, setting boundaries, and valuing your own expertise. If you want long-term success, you must ensure that your pricing reflects the true value of what you offer. Your business is not a charity—treat it like the profitable enterprise it was meant to be.
If you need advice on how to overcome some of your business challenges get in touch.
