Bartering is when you swap or trade goods or services for those of another without exchanging money. We do it all the time with family and friends, so why not with other business owners? There are many different ways to barter that can be effective ways for small business owners to expand your businesses and/or reduce your costs.
Bartering has many benefits and there are a number of reasons why you may want to explore bartering.
- Often you can fill a need that you have without spending any money
- You may meet business owners from a different industry and create a relationship that provides various opportunities
- You can build a network of colleagues that may become a source of referrals
Typically, bartering begins when one business owner approaches another business owner who offers something they require.Make a proposal that indicates the services or products involved, the value, and an explanation as to why it will be mutually beneficial. You might be surprised how easily an agreement can be made.
Whether you are a seasoned entrepreneur or are just starting your business, bartering arrangements should be treated like any other business relationship. There are steps you should take to ensure that you are supporting your small business and creating the foundation for a successful experience.
Before agreeing to a barter arrangement, measure what you will be giving and what you will be receiving in return – the two should be of relatively equal value. You should also verify that the other person is qualified to provide the product or service that they will be providing and that they have the authority to make the agreement. It is normally better to work out the particulars of a barter arrangement through the business owner or manager.
A written agreement should outline the terms of the bartering arrangement, and it can be the most important part of the relationship. Be sure to clearly outline what each party is providing as well as a timeline or deadline. You should also plan to communicate with the other party on a regular basis in order to continue to build the relationship.
Bartering is not always in the cards – do your homework and choose reputable businesses that you want to be associated with. Bartering is a give-and-take proposition that can be very valuable to both parties involved, but only if both parties understand the concept.