Bartering is a great tool for us entrepreneurs. It allows us to conduct business without having money exchange hands. I first started thinking about bartering when I read the book one red paperclip: Or How an Ordinary Man Achieved His Dream with the Help of a Simple Office Supply. In this very entertaining book, Kyle MacDonald got the crazy idea of trading his red paper clip for something better. It evolved, and grew into a crazy international barter exchange which ultimately netted him a house in Kipling, Saskatchewan.
But we don’t have to be quite so far-fetched in our bartering endeavors. We all have skills that we can trade for a service or product. I use Constant Contact to write enewsletters for clients. One of my clients is a beef farmer and we negotiated a deal where some of my fee is paid in steaks and ground beef. In turn, I bartered some beef with a neighbor with a pick up truck. He is going to help me get some new patio furniture home in the back of his truck.
I spoke with a woman last week who told me her husband was trading his skill in website design for a new roof. A recent article in the NY Times quotes Steven Tadelis, a professor who specializes in economic incentives at the Haas School of Business at the University of California at Berkeley. He says “Because of our lack of income and our inability to get long-term credit at reasonable rates, we can’t use the normal market,” he said. “By me offering a service that you accept, we are creating value.” He added, “You might see people switching to barter because they just can’t get money.”
I think bartering is a great way for small business owners with limited funds to grow their business. Craigslist is another source for bartering that you might want to consider. There are formal organizations such as International Monetary Systems that provide nationwide opportunities. I think the best way to start is to ask a potential customer who might be reluctant to part with their limited cash if they would be open to bartering. I also recommend writing your agreement and terms down and each partner keep a copy. Treat this customer just as professionally as you treat any other customer. Let me know of any bartering successes you have had and I will keep you posted on mine!