Is Bartering Putting You Out of Business?
- Posted by Alaia Williams
- On June 25, 2018
One of the many perks of owning and operating your own business is having the ability to barter with other business owners who are looking for cost effective ways to obtain the services they need—either personally or professionally.
While bartering can be of great value (bartering services for spa treatments, haircuts, or marketing), it is a practice that can quickly consume too much of your time—and take you away from your invaluable paying clients. Whether your business is new or well established, increasing your cash flow must always be top of mind. While bartering allows you to eliminate some of your monthly expenses, it creates additional hours in your workweek for your bartered services.
The Downside of Bartering Services
When you barter with a couple of business owners with whom you have a well-established relationship built on mutual respect, bartering services can be quite advantageous. However, many times bartering leads to the 3 complications below:
Downside #1: Time Is Money
While bartering services can have its perks, it has its downsides too. First, you must look at the value of your time. Let’s say you’re an SEO expert and the other person has a salon. In exchange for free SEO services you get a free hair cut or massage— the balance issue arises. One party will often “pay” less in the barter than another. Over time this can lead to resentment, or an uneven exchange of services, which is not time and cost effective in the long run.
Downside #2: Quality
It is simple human nature—when you are performing work for a paying client, your desire to retain them as an ongoing client will ensure that the quality of work you produce is top notch. However, when bartering the quality is often not as high, deadlines may not be a priority, and overall attention to detail may be decreased.
Downside #3: It Becomes Your Business Model
The desire to “save” money by bartering can become such a priority that when you look at your workweek, much of it is spent on projects related to bartering services. This is a common mistake that many new and first time business owners make. While bartering can add value, your time and attention is best spent growing your paying client base, not your bartered client base. There also becomes gray area when your barter clients want add-on services. Do you continue to increase your time on the barter, or do you ask for a partial fee for services?
How To Determine If Bartering Services Is Advantageous
When you are contemplating bartering there are a few questions you should ask yourself before committing to an arrangement:
- What will I gain with this barter?
- Is the barter for personal or professional purposes?
- What is the cost savings, compared to the number of hours I am investing?
- Is the barter short-term or long-term? Project based or ongoing?
- Am I bartering out of need, or out of excitement in the end result?
- Am I settling for lower quality of work due to a bartering services?
The bottom line is—bartering services can add value, but if you are not careful it can monopolize your time and restrict your cash flow. While you can barter for the services you need, there is great value in paying, and being paid for, a job well done!
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