Loading ...Dear Gritty VA:
I’ve had a businessperson approach me about bartering services. Do you think I should do it? ~ LJ
Barter can be great as long as it’s an equal exchange that both parties feel is fair. Problems arise when people "forget" what the terms of the exchange are or don’t live up to their end of the bargain.
So the first question to ask yourself is whether they have something to offer that would be useful or is of value to you. I don’t recommend bartering just for bartering’s sake. What’s the point of that?
If you do decide to barter, keep in mind that barter is considered reportable earnings. And you want to treat them as you would any other client. Have them sign a contract (be sure to very clearly and specifically spell out the terms of the trade arrangement), give them your new client welcome package, track your time and bill according to your usual rates. That will become the basis in determining the value of what they owe you in trade services.
Determine all of the details and agree to all of it BEFORE any work is ever performed. And because you will be basically extending credit, you should also work out the timelines so that you aren’t in effect waiting an outrageous amount of time for their trade "payments."
For example, you might agree that you will both extend each other services immediately and concurrently with each party tracking its own billable time to be reported and "billed" to each other at the end of each month. Or it might be decided that they are to provide services to you for a month, bill you for the value of that time/service, and at the end of that month, then it’s your turn to provide an equal value of services.
I think you get the idea, which is basically that you don’t want to expend any of your business time and resources without receiving something of fair and equal value in exchange.
A drawback to consider with barter is that when money is not involved, people have a tendency to "forget" to extend the same professional courtesy and respect toward the arrangement as they would in any other business transactions. For example, they may blow off appointments without any notice, they may not give the work the same priority as their other work, they can be more demanding and less communicative.
You will want to voice very clearly and assertively, both verbally and in writing, your expectations for delivery, communication, trade and outcomes before you enter into any barter agreements.
One Comment
Thank you for covering this matter. I’ve experienced this with a potential client offering to do some menial work for me in return for my Virtual Assistant services. After carefully weighing matters, and trying to get the person to sign a contractual agreement, with no success, it became apparent that this wouldn’t work. However, if one offers to barter services again, your tips will surely help me to make a good business decision.