If you are an entrepreneur you have come across risk work, but is it only a false carrot to get free entrepreneur labour?
Risk work is when a potential client approaches a business person and requests certain products and services. However this said “client” is not willing to pay for these services or products. Instead he/she proposes to the entrepreneur that: The Entrepreneur deliver these products or services for free. In return the entrepreneur will get a cut of the profits that might be realised from this project or venture. These profits are usually NOT guaranteed, hence it is called “risk work”.
Other forms of free entrepreneur labour
In other cases, a potential client may approach an entrepreneur with a “business opportunity”. This business opportunity is actual work the client is not prepared to pay for. In return, the client proposes free exposure and possible future opportunities that will arise. Again these potential future opportunities are not guaranteed, this is another form of risk work.
In addition to free labour, there are varied levels of entrepreneurial exploitation, where the entrepreneur is underpaid (paid below their standard fees) with the promise of future opportunities.
In a country with minimum wages and no slavery laws, how do people have the balls to expect any type of free labour. Entrepreneurs in general are usually high performers, high intellectual people providing high value products and services.
How do clients expect to propose and actually receive completely free high class, top level products and services
Overcoming barriers to entry
Entrepreneurs are constantly faced with barriers of many sorts when starting their businesses. Clients will present themselves as bridges to cross these “barriers” for new businesses and entrepreneurs.
For example, as a new business you can be enticed to provide free services for that opportunity to receive your first reference letter, experience etc. This is useful if “EXPERIENCE” or lack of it is used as a barrier to entry in your industry.
In many cases, it is the industry gate-keepers that take advantage of young and vulnerable talent. These gate-keepers are industry gangsters, you must get through them as a new talent, get their stamp of approval before you can work in the industry.
Vulnerable small businesses and entrepreneurs often fall trap to this type of exploitation. This is different from getting through barriers, this is like start-up tax. This type of free entrepreneur labour – is usually associated with the “exposure promises”.
The promises you get:
Do this work and you will get nice exposure for your business
I recently sat with Mpho* (not her real name). Mpho is in the construction industry, and recently started her own business. I asked Mpho to share her story with us and this was her response and I quote:
*Mpho’s words start*
In the beginning I used to get excited when I would be presented with an opportunity for Risk Work. If there is a potential construction project in the works, the developer may request your services at risk. In the early days, even the developer has not been paid yet – they are also just submitting a proposal to investors or the bank. They cannot afford to pay you, when projects are few – I would go for such type of work.
Now with more years behind me, and some grey hair, I can say for sure that the majority of these so called clients are real life chancers. People that are running economic experiments at your expense. They should take the risk, hire you and pay you for your work.
Out of desperation, a lot of us have accepted these type of projects – but they are not helping the industry. As a result, more and more “chancer developers” enter the industry, because it is that easy to test out your experiment projects at no cost.
We are enabling the practice, by allowing it to continue. If we all said no – there would be no such practice, I always say.
*Mpho’s words end*
Enabling a bad practice
These words echoed with me. If you enable a bad practice – it will thrive and grow. If we refused to allow bad practices to take root, good practices would fill their space.
In essence, the change begins with you. As an entrepreneur – you must learn to say NO to exploitation of any kind. If we have barriers in place that are unreasonable or anti-small business, we should be working with the minister of small business and government to change these practices. We should not create an environment for the barriers to continue and allow opportunists to thrive.
This makes complete sense. In my experience as a project manager we take projects through the entire lifecycle, the earlier stage is called concept development. In this stage, we are testing the idea – and we will usually test multiple ideas for their economic and technical feasibility.
Usually the company or clients that has employed us will bear the cost of the feasibility study, because they want to know if they should invest in this project. It is fascinating that there are people who want to conduct “feasibility study” type work, test out ideas at the expense of the entrepreneur, contractor, small business person.
To think that this is a normal practice is quite disturbing, and that entrepreneurs must appreciate the opportunity because if the project goes ahead, they will get a contract is ridiculous. In my experience the majority of projects that go in to feasibility phase, never pass it. In most cases a small fraction of projects go ahead past feasibility.
Simply say no to exploitation of small businesses, take your time to find the business opportunities you deserve.
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