Bartering as a Business Practice – 5 tips to Creating “Profitable” Alliances
Faced with a tough economy, many small biz owners and entrepreneurs are finding it necessary to be creative, flexible and strategic to keep their doors open. To stay “in the black” they must seek ways to both increase their income and reduce their cash output.
For this reason, bartering, the age-old practice of trading services or goods, is experiencing a rebirth.
The Case for Bartering
Many find that this method of doing business allows them to expand their network of associates and vendors, create “profitable alliances” and offer or receive valuable resources they or their peers would not otherwise be availed to, due to budgetary restrictions.
The practice of bartering is said to date back to 6000 B.C. with the tribes of Mesopotamia. Since then, everything imaginable has been exchanged in the form of fair trade—from cattle, to cars, to family heirlooms, to sitting services.
For writers and creative artists, these arrangements can provide a host of benefits and create win-win situations for all parties involved.
Real World Examples
Marcie Hill, President of the Write Design Company states that bartering practices have worked out well for her. She states that keeping the lines of communication open is crucial, and notes that restrictions should be put in place for harmonious relations and repeat business.
In 2009, my “bargaining dollars” allowed me to reap these rewards:
-
I got my computer fixed (from virus invasion) and new gadgets installed (valued at a price of $200.00), in exchange for creating a Blog and web content for a computer repair guy.
-
My upstairs washroom and kitchen cabinets received a painting “overhaul” for writing services I provided for an interior decorator.
-
I got free music C.D.s and some photography work performed for editing a business plan.
I saved a bundle. And you can too.
But, as with any business transaction, there are drawbacks that can cause detriment to the novice negotiator.
Here are a few tips to maximize your “earnings” and your experience
-
Get everything in writing. No matter how long or the nature of your relationship, misunderstandings can occur. Putting the terms and conditions in writing helps to provide clarity and accountability.
-
Never enter into a bartering relationship with someone you wouldn’t otherwise do business. No matter how convenient this type of set up might be, if the performance is shabby, or the ethics are questionable, then you’ve still netted a loss.
-
Determine who is responsible for what deliverables, and set a deadline. I learned this lesson the hard way when a person with whom I entered into a bartering contract didn’t finish her end of the bargain until three months after I honored my end of the deal. Needless to say I won’t be working with her again soon.
-
Decide if the value of the services or goods will be assessed by the number of project hours and/or market value. Sometimes perception of what is considered “equal” can vary.
-
Agree on conflict resolution measures. In other words, what happens if one person is satisfied with the end product and the other isn’t? Who can terminate the arrangement and how? Will advance notice be required?
Addressing these five issues up front will insure greater odds for success and greater “net profits” in business bartering.
Author Bio: Jennifer Brown-Banks is a professional, veteran freelance writer and Blogger with over 500 publishing credits both online and in print publications. She authors several relationship columns and produce feature pieces on an array of topics. She is the former Senior Editor of Mahogany Magazine.
Photo Credit: Tomás Fano
Want to be our next guest author? Click here for details…
Trackbacks & Pingbacks
- Lists By, For and About Entrepreneurs | WorkingPoint
- Lists By, For and About Entrepreneurs | The Indigo Heron Group, Inc.
- 50 Brilliant Tips to Live the Bartering Life | Accounting Degree.com
- 50 Brilliant Tips to Live a Bartering LifeBarter is Back | Barter is Back
- 50 Brilliant Tips to Live the Bartering Life | forclosures-r-us.com
When I read the title I thought that this would be an interesting read. I also hoped that real world examples would be given.
I was not disappointed on either count.
I’m diggin’ the concept, completely.
George
George Angus´s last blog ..Read An E-Book Week
Thanks so much, George for your comments and your time. Glad you found this useful.:-)
Jennifer Brown Banks´s last blog ..Guest Post***The Roar Series**Pamela Ferdinand
Great tips Jennifer, getting agreements on paper, regardless of relationship is a must.
Roy Morejon´s last blog ..Social Media & The Fortune 100
Great article Jennifer. I have a buddy who has a magazine and while selling advertising space, he counters an offer and lowers the cost but barters for a gift card from the business. This is a great tactic especially with your point of the economy. Enjoyable read!
Alex´s last blog ..Shane DeRolf Interview, Exhilaration & Guidance At Its Finest
Thanks, Alex. Your friend’s situation represents how bartering is a win-win situation for all.
I have battered on several accounts. I think the most interesting part is how much more you can get for less than using “money.”
How true, Kat. Thanks for your time and input.
B/T/W/ I love the idea of your decals. If I could have used them around my place, we might have been bartering too.:-)
Jennifer Brown Banks´s last blog ..The Gospel Truth**6 Things Writers Can Learn from Joel Osteen
Hi Jennifer,
Great tips, especially the one that you get everything in writing. If you expect one thing and they deliver something different, you will have nothing to go back to and say here it is in writing. I also would agree that if you would not pay for something why barter for it. If a product or service will be an ongoing thing, pay for it first to make sure that you will get what you expect. if it meets you expectations, then go forward with the barter arrangement. I recently did this with service that we traded for the use of some of our office space.
Rob,
PS. Matt, just getting back into the swing of things from a vacation. I have to tell you that I missed reading your blog while I was away. Next time I will not promise my wife that I will stay off the internet for that long. (quality time together thing, I think it is over rate)
Rob Wagner SBA Funding´s last blog ..Tips for Networking as an Online Business
Thanks Rob, for weighing in. I appreciate your time and your thoughts.
Hope you had a “quality” vacation.:-)
Jennifer Brown Banks´s last blog ..APRIL IS NATIONAL POETRY MONTH!
We often trade services in our business, with our customers.
Client relationship management and agreements remain a necessary requirement more so now than ever. Quality business relationships that are based on shared responsibility will support the success of both organizations. A sale is sale. This is often a one off and does not constitute a good business plan. Sharing resources, both intellectual and physical can support business, but then so can exchanging of ideas and supportive networking. Great article.
Bartering or trading of goods and services was important need in the beginning of business . Shops developed that had specific items needed and those people started to settle down so others could more easily find them, and trade began. It was a simple give and take between friends and family. Then people started forming bigger groupings and traveling over wider areas !!! Bartering and business became complex.
I think Business began long before the idea of a simple store or corporation existed. Real money went through a whole set of different cycle viz: salt , copper, iron, silver, gold and then paper……..
mcx tips´s last blog ..Sure Shot Gold Tips-Silver Tips-Copper Tips
Hi Jennifer,
These are some great tips. Tip #2 particularly holds very true for me. I never enter into a bartering relationship with someone that I really don’t deem to do business with otherwise. Trust and integrity are my top most criteria when entering into a business relationship. No matter how great the deal may be, I just don’t think it’s worth the risk.