Occasionally giving away free products or services can be a solid business strategy, but make sure you’re getting a return on your investment, the Inc.com article “How to Give Away Freebies—and Not Bankrupt Your Business” explains. Offering freebies for contests, charities, press or special events can be beneficial, but first ask yourself these questions:

1. Will giving away this freebie threaten your profitability? Even if it has great potential for return, don’t offer anything too valuable without a contract or guarantee that you’ll recoup your investment.
2. Will you get something valuable in return? If you’re holding a raffle or contest, make sure you’re getting some promotional value outside of your current customer base. There’s no reason to give something away if only your current customers will know about it. If you’re donating products or services for a charity, don’t be afraid to ask them for something of value in return – like official sponsorship or some sort of promotional display.
3. Will this meaningfully help raise your company’s profile? A perfect example of a freebie that will raise your company’s profile is donating products and services to bloggers or media personnel willing to plug your business. If done right, this type of marketing can be more cost effective than traditional paid advertising. Giving away coupons for free samples or sessions at women’s exhibitions, bridal shows or community events is another good way to raise your profile. By providing incentive to visit your location, you’ll make your effort far more effective than just having a table at the event.
4. Is it the right thing to do? Sometimes donating to a cause you believe in is just right thing to do. If that’s the case, and you can answer no to question 1, then it’s probably reason enough to give something away even without a return on investment. But choose wisely – unfortunately there’s no way you can afford to support every cause. 

Click here to read the article from Inc.com.