It starts with
- Best Intentions
- Win / Win Objectives
but can end in
- lack of commitment
- poor follow through
- broken relationships
- and some really pissed off business people.
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.
FACT: Service Exchanges are BUSINESS TRANSACTIONS
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.
FACT: If there is in fact a “wash” and equal value is provided on both sides, there is no reason that money cannot be exchanged.
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.
FACT: Not all service exchanges are bad!
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.
5 Strategies for a Mutually Beneficial Business Service Exchange:
- Identify the services are being offered as part of the service exchange including the costs of these services. This will allow you both to accurately understand what the value of the service is and what services are in scope (or out of scope) for this arrangement.
- Determine the timeframe in which the services are to be delivered. This includes how much notice is required for the service request. Don’t forget to discuss what will happen if services haven’t been delivered in the allotted timeframe. What if one has fulfilled the agreement but other hasn’t. Is money then exchanged to cover the costs? (hint the answer is yes)
- Communicate, Communicate, Communicate. Ensure you have open communication and dialog for all aspects of the exchange. This includes the good, the bad and the ugly! You are in this together keep the dialog going.
- PUT IT IN WRITING! – Before you deliver any services as part of the exchange, put all the terms and conditions in WRITING. If you don’t there will be a reduced sense of obligation or urgency to deliver not to mention no leg to stand on if services haven’t been rendered.
- Money is a great motivator and reward. If the working together through the points listed above is starting to be rocky or uncomfortable, be fearless and opt to do a paid business transaction. You’ll thank each other in the end and have a stronger business relationship to show for it. Remember…money is GOOD. VERY VERY GOOD!
I would love to hear about all of your experiences with services exchanges! Share your experiences in the comments below!
Share the LOVE and Some GREAT Business Advice!
I’ve made it super easy for everyone to share this with their business network. Copy and paste social media friendly shareables below!
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
Did you enjoy this article? Do you have a blog that is read by entrepreneurs and small business owners? Feel free to share this article as a guest post on your site! Just be sure to include the entire blurb below with it!
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