Is bartering a good idea?

Have you ever thought about bartering services? I’ve seen it work well for both parties and haven’t seen it. You sure have the same experience.

I barter. However, I am aware of making it a small part of my business. I agree to barter with clients when I need the other person’s services and the value of our services is fairly similar.

Here’s a rundown of when to trade and when not to.

When to do it

• The value of what you are trading is calculated and has the same value.
• They both want each other’s services and would buy them anyway. If someone offers you something you don’t want, then it’s not a good trade. And vice versa.
• It is a conscious part of your business model. You don’t because someone can’t pay you. It does so because it is mutually beneficial.
• The other person agrees to defend their end.

When you don’t

• The scale leans towards a person, since what is exchanged does not have the same value.
• You need the money. We all know that Bank of America does not barter. So if you need income, spend your time with paying customers and do some trades later.
• You don’t trust the other person.

Many people ask me if they need to report on their operations. I am not an accountant so I cannot answer that. What I can tell you is that I choose to keep track of my trades in Quick Books. I like to see my business activity no matter how I get paid, as that is important information to me. It also helps me see where I spend my time.

In short, if you are considering using bartering as part of your business model, be mindful of the number of exchanges you make and make sure each party is committed to fulfilling their end of the bargain.

What about partial trade? That works very well when the dollar value of what is being traded is not equal. For example, if a whole house carpet cleaning costs $ 300 and your massage is $ 75, then some cash needs to be exchanged to balance the trade-off.

Be sure to discuss this BEFORE services are provided to avoid communication problems. Trading is a great way to develop your business, but it should be beneficial to everyone.