Bartering–the direct trade of goods and services–has existed since the beginning of time and despite the introduction of money into society, it still serves as a means for receiving something you need in exchange for any goods or services you have to offer when your business is low on cash flow.
Entrepreneurs of all industries utilize bartering as a means to get ahead. A web designer may offer his services to a local grocer in exchange for food to feed himself and his family, two recording artists may do “song swaps” exchanging each other’s artist services to avoid unnecessary monetary compensation and a clothing designer may provide free apparel to a blogger in exchange for free publicity. The possibilities are endless!
Here are 5 Tips to Successfully Implement Bartering As A Means of Getting What You Need In Return:
1) Determine Your Goals:
You should define exactly what you need and what you are willing to offer to get it. Are you simply interested in direct trading (i.e. – cupcakes for floral arrangements) or are you interested in joining a barter exchange network, where services and goods are exchanged for “barter dollars” to be used to attain the services and goods of others within the network ?
2) Find Others and Open Lines of Communication:
Communicate what it is you are offering and what services or products you are seeking in return. This must be done in a well thought out and delicate way as to not offend someone or their business. Be open and honest about the needs for your business, and also do not short change yourself in the exchange and/or over sell what you can in fact deliver.
3) Draft a Formal Agreement:
Both parties involved should be extremely clear with what is expected of the other and what is exactly being exchanged. Having your agreement in writing will help lower any confusion in actual delivery of what is being offered.
4) Deliver Great Products and Services:
Some people tend to not put in the same effort and quality for a bartered service or good as they would with someone who is paying money. I have been burned on this end after providing legal services and not receiving the publicity services in return that I had bartered for. Make sure you do your best work in a barter situation and make your expectations very clear that you require equally as good work or services in return.
5) Account Properly:
Remember that bartering is recognized legal tender by the Internal Revenue Service. You are required to account for barter income via form 1099B.