If you’re just starting out on a new business venture, it can be difficult to gain traction in your chosen industry. Just because you hang an “Open for Business” shingle doesn’t guarantee that clients will come flocking to your door. In today’s competitive environment, bartering can help you gain exposure for your services. It’s low-cost, low-risk approach is ideal for business owners and entrepreneurs looking to gain new clients, or for anyone looking to start a side business.
Bartering is the trading of one product or service for another of equal value. Usually, there is no exchange of cash. The exchange can take place between individuals and businesses, or it can take place through a third-party like a barter exchange company. Learn more about barter exchanges by visiting the IRS website and reading this Bloomberg article.
The concept of bartering is not new. Think of trading Halloween candy with your friends when you were a kid, or exchanging your apple from your lunch for a bag of chips from someone else. But the same concept can hold true today. Wash dishes at a small diner in exchange for a free meal, or clean a fitness center in exchange for free classes. For a small startup business or entrepreneur, bartering can help you get your foot in the door.
Here are a few tips for successfully bartering your product or service.
1. Work with someone you trust. Ask family members, friends, anyone you know, for referrals for potential clients for your services. Working with a business owner that someone you know has worked with previously ups the trust factor considerably.
Another option for finding clients is to walk around your neighborhood. Look for newly-opened businesses that may not have the resources to hire employees. The manager of a fast-food joint might be willing to offer a free meal or two in exchange for social media assistance.
2. Talk out all the details in advance. Do a lot of talking. Be clear about what you want to do for them and what you would like in return. Many businesses are open to ideas that will help their own business. If you focus on how you can help them, they will listen.
3. Put the arrangement in writing. It does not have to be a formal, legal document, nor does an attorney have to be involved, but the details should be written down. Even if the details are worked out through emails, you have a paper trail that outlines what both parties have agreed to do. It protects everyone in case any issues arise.
4. Do your homework. Check the IRS website or talk with your accountant to determine if there are any tax ramifications for bartering. There probably isn’t, but you need to cover all the bases.
5. Understand that this is a short-term solution. Bartering is not meant as a catch-all solution to cash flow problems, but it can put you in good stead with business owners and managers who can tout your services in the future. Even better, they can refer you to other businesses who may need your services.
6. Remember to thank your client. Show your gratitude by posting a positive review on Yelp or writing a testimonial for their website. Likewise, don’t be shy about asking for referrals or a testimonial from them to put on your own website. That’s the mark of a true exchange.
Bartering your services in exchange for like-kind services can help both parties improve their businesses. It can help you gain meaningful experience, attract new clients and help build good will. And that can be the best building blocks for a successful, long-term business relationship.