It starts with
but can end in
As entrepreneurs, one of the ways that we can get things done without cost is through the exchange of services or bartering services. I have had good experiences and downright poor experiences when it comes to the service exchanges. While the exchange principal sounds great, things can quickly go awry if you are not careful. The impact on your business could be detrimental and the relationship both professionally and personally with the service provider could suffer if the terms and conditions of your service exchange are not clear before you begin. Bartering of services should be approached no differently than a transaction involving money. Sounds complicated when all you wanted was a friendly business sharing of services with a fellow entrepreneur.
This means an agreement, a written contract, mutually agreed upon deliverables and a timeframe to ensure you both get the intended value. In fact, in most cases it is the actual MONEY EXCHANGE that motivates and encourages each party to provide the level of value expected for the price. The exchange of services doesn’t always have the positive psychological effect of getting paid, perceived value for your money or even a sense of urgency.
Service exchanges are positioned as a win-win situation because the value between service providers would be considered “a wash”. That means: the value of what is provided by both parties is equal in terms of dollar amount. In this case, there is absolutely no reason that money can’t be exchanged. In fact, your accountant and revenue numbers will THANK YOU for it. Fringe benefits of this are feeling like you are doing business on the “up & up”, being able to truly call the other a customer rather than an arrangement and feeling valued and paid what you are truly worth.
In fact, sometimes they work quite well! It is up to you to make sure that IF you are considering an exchange of services that you do the due diligence to ensure that you are giving and receiving value that will truly benefit both parties. When in doubt don’t do it and switch to a standard dollars for value arrangement that you would have for any client/customer relationship.
I would love to hear about all of your experiences with services exchanges! Share your experiences in the comments below!
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Can a win/win agreement turn into a win / lose situation? @avv talks Service Exchanges & Bartnering on #mentormondays http://ow.ly/bbX7I
When bartering turns bad. How to successfully craft a service exchange agreement with @avv #mentormondays http://ow.ly/bbX7I
5 Strategies to make your service change a win /win instead of a win / lose agreement @avv on #mentormondays http://ow.ly/bbX7I
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Anastasia Valentine is an award-winning product strategist, CEO of a fabulous marketing and PR agency, speaker, published author and mother. She has over 20 years achieving amazing results in bringing ideas and products to market in the high-tech, music and retail industries.
She works directly with amazing solopreneurs, entrepreneurs, and small, medium and enterprise-class companies across the globe. Her approach combines her knowledge, skills and experience fueled with her drive, a little tenacity and a lot of moxie to launch and build businesses! Visit Anastasia at www.anastasia-valentine.com
I have only done a handful of barters since going full time fiberista. And doing barter with other artist seems so cut and dried, but I like the idea of just exchanging the transactions, or even just a receipt.
Welcome Stacey! Glad you have enjoyed! Here’s hoping that you have some excellent bartering experiences in the future but even more transactions
!
Another great one Anastasia. And I would add that if the person you’re bartering with thinks you’re being too serious by requiring a contract and regular communication, etc, then rethink the exchange. You’re likely heading into something with someone who isn’t going to be the most reliable if they just wanna shake hands and get on with it. At least…in my experience! Thanks for this.
Yes I love that. It sure is a good way to test the relationship to see if the working relationship will work as you move through making an exchange official. If you can’t even get through the exchange arrangements without your spider senses tingling there may be an issue!
These are great tips for setting up an exchenge of services. I agree with Heather, if people just want to shake on it, they are probably not too reliable. I like that you made it ok to be all about business, not just something you are working out.
I’ve recently joined a new (outstanding) network of women and found myself wondering if a few would be up for bartering services so that we can experience what each other offers. I have yet to extend this invite for the very reasons listed and I can see that if and when I do- it will need to be done clearly and explicitly so both sides win.
(hugs)
Sarah
Oh I love the fact about the “wash”!! If the value is equal, why not invoice each other?
It will help sticking to the agreements (which are VITAL) because it will be in writing. Both parties will respect each other more because they will now be official clients of each other, rather than “friends”.
I totally agree with the psychological differnce this makes, also just from the simple act of writing the invoice – when I coach business starters (who always like to barter or give things away for free) I always encourage them to write invoices – no matter how small the amount or even if they are fake and just for themselve (for something they gave a way). Just to teach their brain that they are indeed “in business” and to get into the habit of invoice writing.
The other thing I like about “the wash” is that once you see on paper what you’re gonna give and what you’re gonna get, you are able to clearly define if it’s a fair barter, and if necessary you can still re-negotiate or decline at this point, before it’s too late and you start resenting this deal and the relationship gets strained.
I had a couple of people, not that long ago, approach me about bartering in exchange for copywriting services. Even though I knew, I’d be getting “something of value” in return, I knew myself better. Meaning, I knew I would end up giving up to 5 times the amount of value once committing to the project. I think there can be a reluctance to put your foot in the ground and say, “Hey, this is what my time is REALLY worth” for service professionals. It’s much easier to barter when you have a physical product, or a clearly defined service like a 1-hour massage.
Great post! I can see now that I made the right decision =)
Mmm, bartering is a tough one around my city- it seems there’s always a desire for trade, but often they are two services that are difficult to compare (like 1 hour of massage vs. copy editing, to use an example above). I haven’t played around with it yet but I can only imagine that it is in my future as my business gains more visibility in the community– I’ll be sure to keep your tips in mind, Anastasia, and be sure there are clearly defined boundaries!
Awesome advice. I also had some good and some bad experiences with bartering. Some are reliable others not, so if you want to be sure 100% make a contract. If they are hesitant to make one I already now enough. The perfect moment to change my strategy without any hard feelings.
Great article!
Great advice Anastasia … I’ve been approached about bartering several times. It’s worked well and worked not so well, too. And in the cases where it didn’t work so well your tips would have smoothed the way for a more equal exchange.