Bartering can be a great tool.
People still use the bartering system for certain things, and it can be helpful in the world of small businesses and entrepreneurship.
If you're a new entrepreneur or business trying to get your name out there or get people familiar with your products and services, you must build an audience and trust factor.
Bartering with another business may be a great opportunity.
Bartering is usually informal. No contracts are drawn up, and no lawyers are involved. It's just usually an agreement between two people.
Although it is usually informal, there are things to consider when discussing bartering.
Transparency
Both parties must be clear about their expectations and the value of their services and goods.
Let's say that a massage therapist and t-shirt designer decide to barter.
If you're the massage therapist and you charge $150 an hour for a massage and the t-shirt designer charges $15 per shirt, a barter between the two of you may be 30 shirts for a two-hour session that is of equal value to both parties monetary-wise.
Let's also look at some other factors.
Let's factor in that the person has to design the t-shirts and print the design, either at home or sending it off somewhere to print it, depending on what their system is for printing shirts.
Then they have to press the shirts, package them up, and either ship them, so that's money for shipping or drop them off. So now that's gas that we're talking about.
After considering all this, the t-shirt designer may decide that 20 shirts are fair for a two-hour session.
This needs to be made extremely clear when the terms of the bartering are laid out so that there is clarity about who was supposed to get what and how much of it.
Counteroffer. It is okay to counteroffer on a barter.
If you don't agree with the terms set out in front of you, do not agree to them just because you do not want to hurt the other person's feelings or you're scared of losing out on the barter.
If you hurt the other person's feelings by making a counteroffer, then that is someone you do not want to be working with.
I've participated in a few bartering agreements.
I've offered to send emails in exchange for a review or to do a business audit for someone in exchange for a review.
When I was in the crafting business, I made a few shirts and sweaters for someone who expressed interest in having me do merch for their business.
That merch for business always seemed to get me.
I always got sucked into that because all I was seeing was dollar signs, and I was not looking at the bigger picture, which is so much more than that.
But that story is for another time. (Check out my post about whose business you are focused on.)
I asked them if they would post the sample products that I made. I made these products free of charge and asked if they would tag my business because they knew many people.
They told me they would do it for me, but it never happened.
When I asked them about it, they said the setup wasn't proper for how they wanted the picture to look, and they couldn't find time to take the photos.
This was somebody who posted on social media constantly but could never find time to take pictures of the shirts or to tag my business in them.
I held up my end of the bargain, but they didn't.
If you're going to barter with somebody, hold up your end of the bargain.
It's not fair, and it's not cool to barter with someone. If they uphold their end, and you don't, that shows you as untrustworthy.
Not holding up your end could lead to a trickling effect.
It could cause you to lose business in the long run because you don't know who the person you're bartering with knows or what connections they may have that could help you elevate the next step in your business.
If an issue arises, talk it out. Do not just disappear or fail to fulfill your obligations.
Make sure it makes sense.
Typically, you would pay for a service out of your personal account, not your business account, unless it is a business-related expense.
For the t-shirts, if the designer does not already have the supplies they need on hand, they will purchase them using their business account. Not only are you dipping into your business account, it is also costing you time to produce this product.
The massage therapist most likely purchases their supplies in bulk, and will not need to make a purchase to fulfill their end of the barter. They are just giving up their time. They will schedule you during their slow hours or before/after business hours.
Let's put it all together.
The T-shirt designer had to:
Print the designs
Press the designs
Package up the shirt
Deliver the shirts
They may have had to re-format a logo or change the pixels. They may even have designed the entire shirt and possibly ordered supplies to keep up their end of the bargain.
If you're a product business, only offer things you already have when bartering.
If all you have on hand is white and black shirts, let that person know that the only colors you will offer them are white or black.
If they want different colors, you'll need to renegotiate the terms because, remember, that money is coming out of your business account, which you will not immediately recoup.
It's also a good idea to split the barter.
If the barter is that we're going to do 20 shirts for a two-hour massage, make ten shirts, get your one-hour massage, then go back and complete the other ten shirts and get your other one-hour massage, or vice versa because what you don't want is to get caught in a situation where you've delivered on your end and the other person did not deliver on their end, because believe me, I've been there. It sucks.
It's hard, and then it just sucks for the next person because then that makes you skeptical of wanting to help people and wanting to barter with people.
You never know who knows who and what door someone else can open for you.
Bartering, again, it's a great tool. It's a wonderful tool. It does work.
A lesson I learned from bartering is to get it in writing.
You don't have to get it notarized or anything like that. But get something in writing.
Make it more than just word of mouth. Make it more than just text messages going back and forth.
Get it in writing; both people sign it, so if anything should happen to come up, you have proof that this is what we agreed on.
I hope this helps you out. If you're going to barter, good luck, be safe out there, and make sure that you're bartering with the right people.
Let's not actually spit on it though!
Remember: this post is for informational purposes only and may not be the best fit for you and your personal situation. It shall not be construed as legal, financial, or medical advice. The information and education provided here is not intended or implied to supplement or replace professional advice of your own attorney, accountant, physician, or financial advisor. Always check with your own physician, attorney, financial advisor, accountant, or other business or medical professional before trying or implementing any information read here.
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