ENTREPRENEURSHIP / APR. 05, 2014
version 3, draft 3

The Barter System is Not Dead: How to Do Work Trades

In centuries past the barter system was the way of the world. When a farmer needed an implement, he'd exchange some of his crop for what he needed, using a trading post or a person-to-person trade. Somewhere along the way that system went out in favour of a system of cash trade.

If you're an entrepreneur or freelancer, cash is always welcome - but don't overlook the benefits of the barter system. In my own freelance enterprise, work trades have given me access to everything from acupuncture, computers, books, clothing and other necessities for which I would have otherwise paid cash. I've traded my writing and social media services, but I've also offered fresh eggs from my chickens, gardening expertise and child care. In short, work trades probably won't allow you to pay your phone bill, but they could supply many other things you'll need.

Before you settle on a work trade, ask yourself the following questions.

Are you working with a small or independently-owned business?

If you're approached by a new client who works for a chain or a large company, a work trade is probably not going to work. If you're working with a client who owns their own business, on the other hand, that person likely has the same struggles with the bottom line as you do, and may welcome the idea of trading for goods or services.

Do they seem on the fence about your services?

In an ideal world, all clients would recognize your value and would be willing to pay you what you're worth. If you're working with a client who doesn't seem sure whether they need you or not, suggesting a work trade is one way to get them off the fence. If that client needs you for ongoing work, suggesting a work trade initially may be the way to get your foot in the door.

Say you agree to run a social media campaign for a sandwich shop. You could start off by getting a certain number of free meals in exchange for your services. Once the client discovers how valuable you are and how you're positively affecting his bottom line, he may be more willing to negotiate a fee-based system.

Do they provide something you need?

Of course, the business owner with whom you're working needs to offer something that will actually benefit you or your business. It might sound tempting to get a year's worth of ice cream sundaes - but not if that job requires so much of your time that you can't get any other work done. And do you really need all that ice cream?

At the same time, don't make assumptions about what you're going to trade. If you suggest a work trade, ask the other business owner what services or goods she might have to offer. You might pass on the ice cream, but she could have a truck you'd be able to use to make deliveries, she may be skilled in web design or offer other valuable items you might not have expected.

Did you get the deal in writing?

Once you've determined that the trade is indeed worth it, treat the deal as you would any other business relationship. That means getting the terms in writing and agreeing on a clear barter. On your end, outline exactly what services you're offering, and ask the other party to clearly outline what they'll do in return. Like other business deals, don't forget to explicitly name the number of hours you'll spend on the job, the expected outcomes, the beginning and end dates of the relationship and any other particulars that could come into contention later on.

By laying out the details clearly, you'll set yourself up for a successful business relationship that could greatly benefit both sides. Also keep in mind that in most cases, you'll be required to report the barter as income on your taxes. If you're not sure of what's required, talk to an accountant or tax professional.

If you have any work trade horror or success stories, feel free to share them here.

 

 

Image courtesy: https://www.flickr.com/photos/abqmuseumphotoarchives/

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