Advertising
Advertising

What You Need To Know To Make Sense of Business Bartering

What You Need To Know To Make Sense of Business Bartering

barter

    Bartering, trading one good for another, is becoming increasingly popular as the value of the dollar continues to plummet. There are several bartering systems available online (some better than others) and activity on these web sites has increased as the economy has gotten more and more troubled. However, when you move into cashless economies, it’s easy to get sucked in. Here are a few things you need to know to make it work for you.

    1. Use an established bartering system.

    Bartering on your own is often fraught with difficulties. Establishing “what’s fair” is rarely easy, especially if you’re the guy who charges $100/hour and you’re negotiating with someone who charges substantially less. One hour isn’t always equal to one hour, and that’s not always an easy concept to explain.

    Advertising

    Instead, use established systems that operate with their own version of “dollars” and have structures in place to ensure that everyone follows through on their end of the bargain. The way these systems work is that you join the system and let people know what you have to offer. People use dollars they already have in the system pay you for your products or services. Then you use your system dollars to pay for products and services that you need.

    2. Use bartering systems as a marketing tool.

    Bartering systems can act as a solid marketing tool for your business, when used the right way. People already in bartering systems have dollars that have to be spent in the system. So you’re entering a marketplace of willing investors.

    Plus, people tend to look at these dollars slightly differently from “real dollars” and are more willing to spend them. Bring the right product or service into the system, and you could introduce your product or service to a large group of willing buyers very quickly.

    Advertising

    3. Avoid getting too heavily invested.

    One thing you want to avoid is getting too heavily invested in any bartering community. If there’s something in the system that you really need and would have invested in anyway, this can be a good way to obtain it. However, you can’t guarantee the quality of the professionals in the system. Just because they’re in the system doesn’t mean they’re the best ones for the job.

    And let’s face it…your mortgage company and the utility companies probably don’t accept bartering dollars. You need real dollars for the real world, and bartering dollars just don’t transfer.

    4. Spend your bartering dollars right away.

    There’s another truth about bartering dollars, and that’s that all of these bartering systems are businesses that are owned by someone. In this uncertain economy, companies go out of business in the blink of an eye. So make sure you don’t leave your bartering dollars in these systems for long. Spend your dollars quickly, just in case, so you don’t have thousands invested in this system that could drop off the face of existence without any warning.

    Advertising

    5. Transition bartering relationships to cash relationships.

    When clients ask me about entering into bartering systems, I advise them to keep their offerings to introductory services only. Figure out which services frequently act as a “point of entry” to your business and offer those as barters, then convert your bartering clients into cash-paying clients as quickly as possible to avoid getting too heavily invested in the long-term.

    And, make sure you don’t get behind the eight-ball on any transaction — don’t offer to barter for something you yourself have to pay real dollars for.

    6. Prepare for taxes.

    Finally, don’t forget that the IRS views bartering dollars as exactly the same as real dollars. Earn a dollar in a bartering system, and you’ll still have to pay taxes on that money in real dollars later. Plan accordingly!

    Advertising

    Bartering can be a great way to market your business and gain new clients and trade for services you need for your business. However, there are pitfalls. Plan ahead, avoid being too heavily invested, and transition barter clients into cash-paying ones, and you can benefit greatly from these systems.

    More by this author

    How to Hire A Web Design Firm Are You Having A Scarcity Conversation? 5 Topics To Address When Talking With Your Partner About Starting A Business How to Stay Motivated and On-Track When You’re Struggling How To Do What You Have To Do When You Don’t Feel Like Doing It

    Trending in Featured

    1 22 Tips for Effective Deadlines 2 How to Get out of a Rut: 12 Useful Ways to Get Unstuck 3 15 Ways to Cultivate Lifelong Learning for a Sharper Brain 4 How to Get Promoted When You Feel Stuck in Your Current Position 5 Building Relationships: 11 Rules for Self-Promotion

    Read Next

    Advertising
    Advertising
    Advertising

    Last Updated on April 8, 2019

    22 Tips for Effective Deadlines

    22 Tips for Effective Deadlines

    Unless you’re infinitely rich or prepared to rack up major debt, you need to budget your income. Setting limits on how much you are willing to spend helps control expenses. But what about your time? Do you budget your time or spend it carelessly?

    Deadlines are the chronological equivalent of a budget. By setting aside a portion of time to complete a task, goal or project in advance you avoid over-spending. Deadlines can be helpful but they can also be a source of frustration if set improperly. Here are some tips for making deadlines work:

    Advertising

    1. Use Parkinson’s Law – Parkinson’s Law states that tasks expand to fill the time given to them. By setting a strict deadline in advance you can cut off this expansion and focus on what is most important.
    2. Timebox – Set small deadlines of 60-90 minutes to work on a specific task. After the time is up you finish. This cuts procrastinating and forces you to use your time wisely.
    3. 80/20 – The Pareto Principle suggests that 80% of the value is contained in 20% of the input. Apply this rule to projects to focus on that critical 20% first and fill out the other 80% if you still have time.
    4. Project VS Deadline – The more flexible your project, the stricter your deadline. If a task has relatively little flexibility in completion a softer deadline will keep you sane. If the task can grow easily, keep a tight deadline to prevent waste.
    5. Break it Down – Any deadline over one day should be broken down into smaller units. Long deadlines fail to motivate if they aren’t applied to manageable units.
    6. Hofstadter’s Law – Basically this law states that it always takes longer than you think. A rule I’ve heard in software development is to double the time you think you need. Then add six months. Be patient and give yourself ample time for complex projects.
    7. Backwards Planning – Set the deadline first and then decide how you will achieve it. This approach is great when choices are abundant and projects could go on indefinitely.
    8. Prototype – If you are attempting something new, test out smaller versions of a project to help you decide on a final deadline. Write a 10 page e-book before your 300 page novel or try to increase your income by 10% before aiming to double it.
    9. Find the Weak Link – Figure out what could ruin your plans and accomplish it first. Knowing the unknown can help you format your deadlines.
    10. No Robot Deadlines – Robots can work without sleep, relaxation or distractions. You aren’t a robot. Don’t schedule your deadline with the expectation you can work sixteen hour days to complete it. Deathmarches aren’t healthy.
    11. Get Feedback – Get a realistic picture from people working with you. Giving impossible deadlines to contractors or employees will only build resentment.
    12. Continuous Planning – If you use a backwards planning model, you need to constantly be updating plans to fit your deadline. This means making cuts, additions or refinements so the project will fit into the expected timeframe.
    13. Mark Excess Baggage – Identify areas of a task or project that will be ignored if time grows short. What e-mails will you have to delete if it takes too long to empty your inbox? What features will your product lack if you need a rapid finish?
    14. Review – For deadlines over a month long take a weekly review to track your progress. This will help you identify methods you can use to speed up work and help you plan more efficiently for the future.
    15. Find Shortcuts – Almost any task or project has shortcuts you can use to save time. Is there a premade library you can use instead of building your own functions? An autoresponder to answer similar e-mails? An expert you can call to help solve a problem?
    16. Churn then Polish – Set a strict deadline for basic completion and then set a more comfortable deadline to enhance and polish afterwards. Often churning out the basics of a task quickly will require no more polishing afterwards than doing it slowly.
    17. Reminders – Post reminders of your deadlines everywhere. Creating a sense of urgency with your deadlines is necessary to keep them from getting pushed aside by distractions.
    18. Forward Planning – Not mutually exclusive with backwards planning, this involves planning the details of a project out before setting a deadline. Great for achieving clarity about what you are trying to accomplish before making arbitrary time limits.
    19. Set a Timer – Get one that beeps. Somehow the countdown of a timer appears more realistic for a ninety minute timebox than just glancing at your clock.
    20. Write them Down – Any deadline over a few hours needs to be written down. Otherwise it is an inclination not a goal. Having written deadlines makes them more tangible than internal decisions alone.
    21. Cheap/Fast/Good – Ben Casnocha in My Start Up Life mentions that you can have only have two of the three. Pick two of the cheap/fast/good dimensions before starting a project to help you prioritize.
    22. Be Patient – Using a deadline may seem to be the complete opposite of patience. But being patient with inflexible tasks is necessary to focus on their completion. The paradox is that the more patient you are, the more you can focus. The more you can focus the quicker the results will come!

    Featured photo credit: Estée Janssens via unsplash.com

    Advertising

    Advertising

    Read Next