Barter Handshake - Photo By calgrin When cash is tight sometimes bartering can be the perfect solution, but you need to do it right for both parties to truly walk away feeling it was a win-win.

When you are in business for yourself, cash is king. I don’t tend to barter very often because either 1) I don’t really want the service the other person is offering or 2) I need cash to keep the business running. However, there have been some select times when bartering has allowed me to both serve and be served in a way that otherwise wouldn’t have been possible. I haven’t bartered in a while but recently a colleague of mine approached me with a proposition. For the most part, income is my main goal right now. The first full year in business for yourself is a time when you really need income to not only keep the business rolling but meet personal obligations. Yet, this was a friend and colleague who has a service that I have been wanting to hire her for but haven’t had the cash. Thus an ideal opportunity to barter was born.

The biggest mistake people make when they barter is not formalizing the agreement. Remember you are bartering like valued time or service so you want to make sure that is clearly stated in writing. Just as you want to have a written client agreement for every person you do business with, you also want to follow the same protocol for barter. Here is what I suggest based on my own experience.

Clearly discuss and agree

Have a detailed conversation discussing what services will be provided, by whom, and what the exchange will look like. Talk about what the total cost would normally be to engage each other’s service and any discount you might be providing.

Determine the exchange

Once you understand what the true total value of each other’s service is, discuss what would be some possible equal exchange scenarios. For instance you may decide to

  • trade service hour for hour (but only do so if your hourly rates are similar or someone will feel shortchanged whether it is spoken or not)
  • trade total value for total value regardless of the number of hours each person commits (this helps you get around wildly different hourly rates)
  • exchange some combination of the two

As you discuss the possible ways you can work together make sure you speak your concerns. Remember the goal is to walk away with each person feeling the deal is fair and equitable.

Put it in writing

This is the step most people skip, especially if they are dealing with friends, family, or close acquaintences. You want to put the agreement in writing in a very simple, straightforward way that shows what each is agreeing to and the total value being exchanged. Not only does this help avoid misunderstandings later, it is an important tool to ensuring your relationship stays intact and each person is 100% clear on the agreement and deliverables.

Set expectations

Include this in your written agreement. You may decide that the trade is good for a period of time (much like a gift certificate or coupon). You may also decide that since you are bartering that the project falls into a tier 2 priority so that if a big cash cow project comes your way you don’t need to worry about missing the deadline on your barter arrangement. Whatever you agree to make sure it is reasonable and that you treat it with the same professionalism and respect you would any other business dealing. Bartering does not imply a second rate client relationship.

Ongoing communication

Just as you would with any other project make sure two-way communication is a regular part of your process.

Deliver

It goes without saying, but you need to deliver what you promised. Again, bartering is not a second class business relationship. It is simply a business exchange like any other except that something other than money is being used as compensation. Keep to agreed upon timeliness and refer back to that written agreement if either party is not holding up their part of the bargain.

Used judiciously bartering can be a great way to engage the services of another person even if you don’t have the cash. Remember though — if you approach someone and ask them to barter and they decline, don’t take it personally. Some people are more open to it than others, and the circumstance needs to be right for both parties. Even I engage in it only infrequently, but when the time and situation is right it can be a great win-win.

Paula Gregorowicz, owner of The Paula G. Company, works with women who are ready to create their lives and businesses the way the want rather than how they were told they “should”. Ready to learn how to achieve success on your own terms? Download the free 12 part eCourse “How to Be Comfortable in Your Own Skin” at her website http://www.thepaulagcompany.com and Coaching4Lesbians blog.