You’ve heard the phrase “It takes a village to raise a child.” Well, substitute “business” for “child,” and you have the concept of bartering. “Bartering” is the exchange of goods or services for other goods or services instead of money. It’s an old-school concept that’s regained popularity in the wake of the recession, especially among small businesses for which cash flow is tight. Here’s what you need to know about bartering and how it can benefit your business.
Look around your office. Are there improvements that need to be done but you just can’t afford? Does your equipment need upgrading but it’s just not in your budget? Do you want to network and attract more customers to your company? Then you should look into the barter system.
Bartering can range from an unofficial transaction between friendly businesspeople – for example, someone baking your wedding cake in exchange for you performing graphic design work for them – to more formal deals conducted through commercial barter companies, such as ITEX. Industry groups the National Association of Trade Exchanges (NATE) and the International Reciprocal Trade Association (IRTA) provide resources, information and advice about bartering.
A good way to get started with bartering is to read up on NATE’s and IRTA’s websites and to check out your local barter organizations. Talk to people you know about whether they’ve bartered and learn from the veterans.
Be aware that bartered income is taxable, so you do need to keep track of the value of goods or services provided. NATE and IRTA have created their own currencies through which member barter companies can trade.
It’s debatable about what exactly caused the recession, but one thing that’s come out of it is the reinvention of how business is conducted. The dollar is not necessarily mighty anymore, and people have banded together to support each other’s businesses. Bartering may be currently fashionable, but it might also be part of a sustainable way of doing business in the future.