Does the idea of bartering conjure up images of a swap meet? Perhaps it brings back memories of grade school lunchtime; wheeling and dealing PBJ’s and oatmeal cookies.
Do you believe that bartering “just doesn’t work”? Are you convinced only wannabe’s, noobs and criminals barter?
Barter is a fantastic way to grow your business when cash is tight. It’s time to set the record straight on barter, and how you can use barter to prosper.
Debunking the bad reputation of bartering
Bartering is Different Than Paying Cash
Alternate Title: It’s all in your head!
Why is bartering different than paying cash? This is not a rhetorical question. Why do you believe barter is somehow different than paying cash?
What is money? I know, I know. You want to be a profitable biz owner, not a Buddhist Monk. Hang in there with me!
Perhaps a better question is why do we have money? Because people didn’t want to carry heavy bags of grain around. People also don’t want to be forced to pay 2 live chickens for something only worth 1.5 live chickens because you couldn’t possibly make change.
Money is simply a commonly accepted symbol of value. It represents your hard work, your services, your products. In fact money is nothing more than a go-between. You create a product that you value at $100. I sell a service for $100 so I can buy your product.
How is that any different than if we directly exchanged your product for my services?
It’s not. The only difference between paying with cash and using barter is in your head.
Bartering Doesn’t Require a Contract
Alternate Title: If you have poor business practices you get poor results.
I’ve often heard the complaint that a person didn’t get what they expected in a barter arrangement. Key word there is expected.
When I ask if they any type of written agreement the answer is always no. You can expect a lot of things, that doesn’t mean they will happen. What is important is a clear understanding between the two parties.
“But we talked about it!”
How many times have you “talked” about something with your spouse, friend, or kids and had them forget or have a very different memory of the conversation? I’m not saying it’s deliberate, it is simply human nature. Our memories are imperfect, and that’s assuming you both heard the same thing.
When an agreement is in writing it does two things. First it ensures you are really on the same page (literally!) in regards to all details of the barter deal. Second it creates a clear, permanent record of that agreement. So if a month later there is a dispute you can pull it back out to verify the facts.
It doesn’t need to be a complicated, lengthy document. A single page, or even an email can suffice. Just get it in writing!
Barter Clients aren’t Real Clients
Alternate Title: Client class warfare is a no win battle.
So do you have imaginary clients then? Do you do work for pretend people? I hope not!
This ties in directly with my first point about getting paid by cash versus services. You are performing a service for someone who IS paying you. In my book that makes them a client.
If you can’t treat your barter clients the same as the rest then don’t barter. If your potential barter partner gives any indication of seeing you as less than other clients, don’t barter.
Bartering is Too Complicated
Alternate Title: Because loan applications are soooo easy
This one confuses me the most. Name one way to raise capital for your business that is simple. Even robbing a bank requires a lot of planning if you don’t want to get caught.
In reality bartering is simpler than many forms of funding for your business. The complexity is only slightly more than a standard contract with a client. If you need cash now to grow your business bartering is one of the fastest ways to make it happen.
You may also want to read another post I wrote on all the different forms of barter, and how you can leverage them in your business.
Are you convinced that barter might be a solution for you? Have you used barter in the past? What was your experience?