Getting a competitive advantage in business can be challenging, particularly if you are operating through traditional business methods. Bartering (trading without currency) gives you access to a whole range of different business who you may not have operated with beforehand. Getting the most value out of these business relationships is crucial. Here we break down some of the different tips to generate the most success in bartering.
1. Advertise your services and emphasise the benefits
Getting potential partners for your bartering trades requires some of the normal marketing that you would conduct for other activities. The first step is to list your services on a bartering site to start to get the word out there. This will give you a platform and help you work out the type of goods or services you are looking for.
2. Determine what goods or services you want in return of your offering
Setting out to engage in bartering activities will only work if you have a clear understanding of the type of services or goods you want to barter. Have a look at any of the shortcomings within your own business, or any areas where changing suppliers could lead to cost savings. This will then give you an idea of what you are after in return for your services.
3. Get the legal side of your bartering trades correct
After you know what you want from the barter deal, it is time to put together the trading contract. We recommend seeking some outside counsel if you are unsure how to put the agreement together. This could save you on costly legal fees in the future. It will also give you an understanding of what you must do to satisfy the demands of the tax office.
4. Try to barter goods and services that are of equal value
One of the key mistakes many companies make when engaging in barter is not exchanging goods or services that are of equal value. As the value is somewhat subjective, you should work together with your bartering partner to develop an understanding of what you both want in return of your services.
5. Be open-minded to the potential services you can trade
When some business enters a barter deal, they have a clear idea of the type of service they want in exchange for theirs. Whilst this is good, you should still be open-minded about the different options when it comes to bartering. An open-mindedness coupled with some research on bartering ideas could lead to a very good business partnership in the future.
6. Try and learn from trades that didn’t meet expectations
As with many aspects of business, good bartering is an iterative process. You are going to better at it after a year of trading than you would be after a day. Make sure you and you partnered company get together for regular meetings on how the working relationship and barter trade could be improved.
7. Be wary of bartered services that seem too good to be true
Most reputable online bartering platforms will perform some due diligence to make sure that those trading on their platforms is offering real goods. This does not mean you shouldn’t be careful of who you are trading services with. If a contra deal seems too good to be true, it probably is. Yes, it is a cliché, however, it is very true in this industry where the value of what’s being traded is so subjective.
8. Keep a good record of past barter transactions
If you are trading on a bartering platform it should keep a record of your bartering transactions, however, if it doesn’t you should try to keep your own record of your deals. This will provide evidence if any of your barter deals go south and will give you a record of your transactions and ‘earnings’ that will be very good for tax purposes.
9. Make bartering part of your long-term strategy
Whilst bartering is great for freeing up cash in the short term, it can also be a fruitful long term strategy for business growth. Always keep in mind services that you could benefit from and how your operations could be tailored to different businesses. This will help you to develop a robust long-term strategy.
10. Have fun with bartering!
Finally, you should make sure you have fun when bartering with other businesses. The proximity you may be working in means you should ensure you are both in a mutually enjoyable working relationship. Also, it can be great fun getting creative on the different things that you could operate as a business.