Note: This post is part of the January Word Carnival — a monthly group blogging event specifically for small business owners. (It’s the most fun you’ll have all month!) Check out the rest of the fabulous carney work here. And don’t forget to join us for our Twitter Chat on Thursday (Jan 26) at noon (Pacific). We’ll be tweeting up a storm under the #WordCarnival hashtag.
Bartering. Most people don’t think twice about it. Bartering is just an archaic form of commerce that doesn’t exist any more. But that’s not entirely true. In fact, it’s not true at all. Business bartering is alive and well. And for businesses trying to advance on a shoestring budget, bartering may be a godsend.
Money was created to make transactions between individuals. You can give something of value to one individual, get paid, and then obtain value from someone else.
If you are a musician for example, a mechanic may not be willing to fix your car in exchange for a song performance. That is why money is necessary.
But in the business world, especially online, bartering is still alive and well.
Who Can Barter?
Anyone that can provide value for each other that is.
In the example I provided above, a musician and mechanic may not be able to come to an agreement. That is why money is necessary. Although you never know .
But anyone that can provide a business related service, can easily find a match in someone else providing a business related service.
For example, writers and SEO backlink specialists can find common ground. Consultants and business specialists can make agreements with businesses that have something of value (for example a large subscriber list).
Service providers can offer their services in exchange for a product they might want to give as a gift.
The possibilities are really endless.
Bartering is a great way to perform transactions without actually exchanging money.
Many small business owners and “solopreneurs” have to run operations on a shoestring budget. That means the less cash they have to spend, the better.
And bartering offers an alternative to obtaining value by spending cash. You can obtain value by offering value. You have to hire someone to provide a service for you to advance your business. Instead of paying, you can offer your services in return.
That’s the most “on-the-face-of-it” reason. But bartering can be a much greater tool if you get creative with it. Read on…
Where to Find People to Barter With
Anywhere you can network is an opportunity to set up a barter deal.
LinkedIn is a good place to start. Business sites and blogs are another great place. Anywhere you can connect with someone is really a potential for a barter relationship. Network, connect and offer a transaction.
There are also barter networks that you can look into. But these aren’t always the best, or most “pure”, form of bartering. Networks such as BNI actually create their own monetary system through “BNI points.” If you’re going to use a monetary system, you might as well use a real one earn dollars rather than points.
Ingredients for a Successful Agreement
To cook up a successful barter deal you need to have a couple of ingredients in place (line inspired by Tea Silvestre, The Word Chef ).
The first of these is trust. Because there is no monetary exchange taking place you must trust the other party to hold up their end of the bargain. This is especially true in deals where services are being exchanged because these can take time and you may not know for a while if the other party is staying true to their word. And since you aren’t paying with money, refunds aren’t exactly an option.
The other ingredient necessary for a transaction to take place is Value. To be more specific, you need equal value being exchanged between both parties. To be even more specific, you need equal perceived value.
When you sell a service for money the value is established in dollars. But in barter exchanges value can be a bit more unclear. Depending on how desperate the parties are in a deal, one may be getting more out of the deal than the other.
There is a bit more flexibility in terms of value exchange because perceptions can be different. Since there is no cash being spent, one party may be willing to give up a bit more than they normally would. And, since there is no cash exchange, it’s harder to go compare and find a “cheaper” provider.
But Wait…There’s More!!!
As I said before, bartering can be much more than just a simple exchange of value between two parties.
Bartering can actually be used to leverage your way into getting your first clients if you are starting up a new business.
Let’s face it, getting clients without any references can be difficult. People want a proven track record. But if you can offer up a deal where you will do the work and no cash is being exchanged, people are willing to be much more lenient.
In fact, this is often a great way to advance your business presence much faster than you normally would. If you are providing your services to a well established company, they can promote you in return. This can be a huge boost to your business.
Your Two Cents
Have you ever taken part in a barter deal?
Who got the better end of the bargain?
How did you go about setting it up?
Where did you find someone to barter with?