If you're like everyone else trying to start a new business, you have no money. In fact, you probably have less than no money. You're probably in debt up to your tonsils. Still, there are birthday presents to be bought and lawns to be mowed and how do you keep up with these things when you feel like you don't have a nickel to your name?
Bartering is a great way to move your business forward when you don't have the experience to command cold cash. The basic idea is that you exchange your product or service for someone else's — no money changes hands.
When I'm not writing for First Wives World, I run a marketing company for very small businesses and my blog, ittybiz. In the last year or so, I've been getting a lot of my business through this method and it works wonderfully. In exchange for my services, I get free coffee at the local café for life. I'm six months into a year of free badly needed manicures and pedicures. I even organized the marketing for a tattoo parlor and transferred the gift certificates to my neighbor who has agreed to paint my apartment.
Here are a few things to know about the whole process:
- You can barter either independently or through a bartering network. Independent bartering is simple — you clean my house and I watch your kids, for example. Network bartering is when a large group of businesses get together to streamline the process. In this case, you would clean my house, I watch the neighbor's kids, and he shovels your driveway. Everybody gets a service, but they're not limited to the offerings of one person.
- In most states, services or products received through barter are treated as taxable income. Since laws vary from place to place, check with your accountant.
- While you're talking to your accountant, ask him if he'd consider bartering with you. You'd be surprised by how many people prefer this method of payment.
- Since bartering is far more intimate than exchanging work for money, the people with whom you trade services are very likely to refer you to others. The people they refer are often paying customers. Not only are you then getting money in your pocket, you didn't have to spend a cent on marketing to attract them.
If you're not sure if you're ready to run your own business full-time, or you haven't had a chance to build your client portfolio, bartering is a great way to dip your toe in the water. As long as you're confident you can provide a service or product that is high quality, try bartering a few times to see if you like working for yourself. It's win-win!
Naomi Dunne is a blogger on First Wives World and runs the ittybiz blog which offers marketing advice to small, home-based businesses.