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Arment Dietrich

To Trade or Not to Trade: Five Tips for Business Bartering

By: Arment Dietrich | July 28, 2010 | 
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Guest post by Laura Scholz, president of Scholz Communications.

When you first start your solo PR practice, bartering services can seem like a win-win. You get amazing experience, exposure, and valuable services; your “clients” get your professional expertise at virtually no cost.

During the past three years, I’ve traded for web design, haircuts, Pilates and yoga classes, personal training, head shots, nutrition advice, office space, and more than the occasional meal. Having started my business with zero savings and zero capital — in the middle of a divorce, no less — these types of relationships were crucial to helping me manage my budget AND move my business forward. And I would say the same was true for those on the other end of the barter.

But as my business continues to grow and my time becomes more limited, I’m starting to question the value of trade for all involved. I think everyone enters trade with the best of intentions, but with never-ending to-do lists and nonstop schedules, you have to set priorities. And that means paying clients come first – often to the detriment of good relationships with quality people who have nothing but the best intentions. So, how do you decide if trade is right for you? And if it is, how do you make it a truly mutually beneficial relationship? Following are five tips for business bartering.

  1. Be selective. Choose your trades carefully. Go with businesses and people who represent your brand and reputation. Remember  you don’t have to accept every trade opportunity that comes your way. It’s okay to say no.
  2. Be realistic. We’re all busy professionals, juggling client work with personal and professional obligations. It’s easy to take on too much, and unfortunately, unpaid work can fall to the bottom of the priority list. Be selective about your clients but also realistic about what you can accomplish for them given your other responsibilities. Over-promising is the easiest way to ensure a relationship goes south.
  3. Sign a formal contract. In the early stages of my business, I did entirely too much business with nothing but a virtual handshake to seal the deal. Not any more. Every one of my clients signs a contract stipulating terms, duration, and deliverables. It may seem like a formality, but it gives both parties clear boundaries and expectations.
  4. Establish boundaries. Every project and every contact needs a beginning and end point, with clear goals, deadlines, and outcomes. For example, my contract with my Pilates and yoga studio is for six months at a set amount of studio credit per month and outlines specific deliverables. This ensures  I complete the work for them in the allotted amount of time, but it also means we can renegotiate terms or choose to part ways at the end of the contract. Which brings me to my next point, which is…
  5. Have an out. There’s nothing worse than an open-ended “I’ll help you if you’ll help me” agreement. While entered into with the best of intentions, it breeds laziness on both sides and sets you up for an unpleasant parting. Unfortunately, I’ve been there, and it’s really not the ideal way to end a friendship or a business partnership. Be clear about the terms of your relationship, but also give yourself and your “client” an out so you can end the contract if either party is unhappy – without permanently damaging your relationship.

What are your experiences with trade? Other lessons you’ve learned or tips you’d add? Any success stories you’d like to share?

Laura Scholz is the president of Scholz Communications, a boutique firm that helps creative sector entrepreneurs brand, promote and grow their businesses. When not busy working or writing for her own blog, she enjoys running marathons with the Georgia Chapter of Team in Training, consuming massive quantities of cheese dip, and virtually celebrating wine:thirty with the Arment Dietrich team.

12 comments
sarahmiller
sarahmiller

Thanks for the tips Laura. I am kinda new in the business. And I believe that having a goal is very much important. Then i went on to read tip no. 5. And it's true I thought somehow establishing a "I'll help you - you help me - relationship" could be beneficial, but it can actually be sometimes a disadvantage and that it breeds laziness.

Kerry Johnson
Kerry Johnson

Wow, thank you for the great tips. I am bartering myself and i love it, its easy and free!
I am trading with friends and neighbors but also online on Barterquest.com

Davina K. Brewer
Davina K. Brewer

Laura, It's an interesting concept, one I've never tried. Alas my local wine shops seem to be doing fine without me, so not much opportunity there. ;-)

For someone interested in bartering, you've outlined some good advice, the core of which: keep it professional. Just because it's a barter deal does not mean it's not also business. ITA with establishing the terms and expectations, and spelling them out in an agreement that mutually beneficial.

Something to consider. Thanks.

Ann Dunaway Teh
Ann Dunaway Teh

Excellent post! I struggle with 3, 4 and 5. Speaking of which, we probably need to talk! :)

Even with paid work with some of my regular food industry clients, I don't always sign a contract. I need to come up with something for this side of my business. I haven't gotten burned yet but I really don't want to learn the hard way.

Laura Scholz
Laura Scholz

Thanks for commenting, Alli! And I think you make a good point--it's good to know your policy, barter or no barter and why and how. I'm actually not a fan of it these days (that's blog post part two, I guess), but there was a time when it worked for me.

Allison Nazarian
Allison Nazarian

In the nearly 10 years I have been in business for myself, I have never bartered.

I always start with the assumption that there is at least one "loser" time- and/or money-wise in the barter and have never been faced with a situation that seemed "good" enough to overrule that assumption.

I know it works well for some people and that there are entire businesses/organizations built on the barter way of life/business, but for me it was never something that seemed like smart business to me.

If someone suggests it, I explain I my no-barter business policy and usually that is the end of the conversation. If we don't do business because of that, then it wouldn't have been a good fit anyway.

Thanks, Laura!
~ Alli

Laura Scholz
Laura Scholz

John--uh oh! That's the worst part about owning a business, bartner or no barter. I never realized I'd have to become a part-time bill collector.

And I think you're smart to pass if the trade isn't fair. Just had that conversation with a friend today.

Thanks for commenting!

Jon Buscall
Jon Buscall

I bartered once and it worked out fine, actually. But too often I've sensed there was more cost involved for me so I've politely passed.

The one time I asked to barter was when a client couldn't afford my rates but had a service I really wanted. They passed on my offer and then came back to me and hired my services at the going rate. I'm currently waiting for the the invoice to be paid. It's three weeks late!

Ryan Scholz
Ryan Scholz

I started my own consulting business over ten years ago. I have never bartered for anything. In a barter situation, the assumption is made that there is an even trade. When both parties establish a fee or cost for the service, then they are able to better make a value determination. I found that what I was doing for clients was far more valuable than what they could offer in return.In a non-barter business relationship, either or both parties can opt out much easier.

Shelly
Shelly

Those are really good tips Laura... for those people new to the actual business workings of a business that information is invaluable!

Laura Scholz
Laura Scholz

Thanks, Shelly. I think they're good tips for business in general. I know that when I first started, barter or no barter, I was definitely not rigid enough with contracts and policies and rules, and it came back to haunt me every time!

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