Barter is a system of exchange by which goods or services are directly exchanged for other goods or services without using a medium of exchange, such as money. Barter usually replaces money as the method of exchange in times of monetary crisis, such as when the currency may be either unstable or simply unavailable for conducting commerce. (Wikipedia)
It’s clear that money doesn’t make you rich. There may be more value in using the exchange of a service for a service (barter), than paying cash for a service.
I was caught in this web of barter earlier this year, and although not all bad, it certainly had its disadvantages. Take a look and decide for yourself whether you would give something like this a try. If you do, be wise, and consider the following.
- Does not require payment in money for a service.
- When wealth in money cannot be stored, especially in bad economic times, then the goods you receive are of higher value.
Value cannot be measured fairly in a barter situation: On the other hand, in a monetary economy, money plays the role measuring value of all goods, so their values can be measured against each other; this role may be absent in a barter economy.
Timing and the long-term benefit: What if the service you receive in exchange is not what you need right now? Does it have a time limit? And if so, how relevant would that service be in 6 months from now?
In my case, I exchanged designing a book cover for getting access to a marketing course. This is great as I can build my online presence through stronger marketing strategies. The only problem with this was Time and Focus.
Time: as you know, courses take time to do on your own, and between juggling the daily business needs, this got lost amongst all the other important jobs to do.
Focus: Focus in business is a big thing for me. Your business approach changes over time.
So in the end, what I thought I received as a valuable deal, ended up being a very dead end street. The only reason it’s a ‘dead end street’ is simply my own doing. If I worked at it then I’d reap the benefits of the good I exchanged – right?
Well no, not really. I’m sitting with a course I have to WORK AT. Only once I’ve completed the course – which can take up to 1 year – only then, might I reap the benefits of the exchange.
The other person received a cover design. Something I also worked hard at. So who’s sitting back and reaping all the benefits?
Other things to consider when bartering
The written agreement
This is the what, who, when and how this service will work between the two parties. Includes things like the process of the job, deadlines, when the agreement ends, etc. Everything you would normally do for any other paying job – WRITE IT DOWN and AGREE IN WRITING.
Promises of fame and fortune
If someone cannot pay you – that’s one thing. But, if someone says, ‘I’m well-known in the industry, and after this job you do for me, I could mention your name to a few people etc. etc.” Piece of advice – find out exactly what the ‘etc. etc.’ means, as well as these 3 tips below.
- The proof is in the pudding: You can’t rely on the promises of fame and fortune by someone you don’t know. This is where ‘knowing and trusting’ the person comes in.
- Proven influence in the industry: If your part of the deal is getting exposure/marketing from a respectable and reliable source in your industry, then that’s just plain priceless. But KNOW the person you dealing with, or investigate him/her if you don’t know them.
- Unless you doing work for the pure love of it in exchange for nothing, then by all means go ahead. We all do that now and again. Sometimes it’s not about the money, or what I can get in return, sometimes it’s just about the love for the work. Just know your love limit 😉
Undervaluing your business
Giving away anything for free tends to undermine the value of your business. Unless you giving it to charity. So be professional about the way you handle freebies or Bartering. Often people think if you offering a service cheap or free then you can’t be THAT good. Don’t feel intimidated or get crooked into feeling that you have to offer free services. Look at this scenario: Someone walking into a grocery store. Would they be allowed to take something off the shelf, and walk out without paying? Hell no! The same goes for any other business – pay or go to jail.
How does one sort through the fakes from the real clients?
Stay tuned…I’ll be posting a few tips about fake clients I found through another blog post by Laura Spencer at Freelance Mag. The ones who really mean business, the ones who respect and negotiate fair deals – deals where both parties reap the benefits – now and 6 months down the line.
Bottom line is, when you knock your head in business, it doesn’t mean you don’t ever have to go down that road again. Sometimes, it just means you need to approach it differently. So don’t be afraid of making mistakes. It’s the mistakes that make you wiser, and shows that you’re out there doing something, and learning! Most of all, LEARN from your mistakes.