Barter Best Practices
With so many people starting new businesses, it tempting to stretch your startup capital with barter.
Barter is a valid way to get things accomplished, get a client base and great testimonials. In fact, barter makes so much sense that there are “barter companies” like Itex.com that facilitate barter transactions.
Here is what I’ve found to work best when bartering:
- Treat each barter agreement as a business transaction.
- Exchange services at your full rates.
- Issue invoices for the work that you do by barter.
- Pay the invoices received with “gift certificates” to your business.
- Allow your gift certificates to be transferable.
Here is the typical scenario between a bookkeeper and a graphic designer. The bookkeeper needs a business identity package and the graphics designer need their bookkeeping done. The bookkeeper charges $250 setup and $175 per month. The business identity package is $1500…
The graphics designer does the work and issues an invoice for $1500 which the bookkeeper pays with 15 – $100 gift certificates or coupons. In turn, the bookkeep issues an invoice for $250 which the graphics designer pays with their gift certificates from the bookkeep.
This may seem like hocus pocus and way too much bother, but human nature dictates that when “working for free or barter” that work takes backseat to people paying with cash. Barter doesn’t pay your mortgage, cable bill or put gas into your car where cash does.
My friend Art Kaliel is the Itex Rep in San Diego and always says “Cash is King and Barter Queen“. Barter makes sense when counsciously a Win/Win process is consciously thought through and followed.
Terry Hall
socumes
Brigette
Mindy
staffwriter