With the economy in its current state, many businesses find themselves with surplus products or surplus capacity of services but struggling where to find clients. And regardless of the state of the economy, beginner businesses are always hungry for their first client… and more clients…
One solution to this is Bartering. There are literally thousands of bartering services around the nation – some better, some worse – that help business owners exchange their products and services for barter-dollars (different barter companies call this different names).
Use a Bartering System to Get More Clients
What is Barter?
Barter is simply the exchange of goods or services for other goods or services, usually with no money exchange involved (though thre are instances where certain percentage of the exchange is provided in barter and the rest in cash).
How does a Barter Club Work?
Nothing is free, of course. There is usually a (one-time) sign-up fee of $250 to $1000 dollars + a certain percentage of your sales. NuBarter, I believe charges 3% off every transaction. I suggest staying away from the companies that charge more than $500 sign-up fee AND especially from the companies that charge a high annual fee (nuBarter does not have an annual fee).
Some barter companies also charge a monthly fee, which can be as low as $10 to $25.
The beauty of the Barter system is that many businesses already have thousands of dollars in barter money and they are ready to use your service, if you can position yourself properly (let them see you as a solution-provider for their challenges).
Let’s say, as a coach, you provide coaching services for a member in your barter club, for $650.00 per month; and you provide this service for 5 months, netting you a healthy $3250.00 in barter-dollars. You can spend this money with any of the vendors who belong to your barter club:
- accounting services
- advertising services (radio, TV, newspaper)
- virtual assistant
- social media management services
- rent space for workshops
- hire a videographer to record a professional video of your workshop
- cleaning and declutering services
- and 1000s more services or products
I, for example, am a member in a barter organization called nuBarter (http://www.nuBarter.com) – if you have them in your area, I highly recommend them – a very reputable company run by a CEO (Gary Field) with high integrity; also the employees are super helpful and supportive…
So…, I’m a member of this barter club since 2007. I provided them a keynote speech for their international conference, with participants from all over the world (a conference organized by IRTA – a regulating body of barter clubs/companies); as well as I provided two break-out sessions during the 3-day conference. During the years I provided several more speaking and coaching services and used the money for my book cover design, meeting room rental for my workshops, video recording of my workshops, and now I have a few thousand dollars left that I plan to to barter for putting down wood flooring in my living room and my hole-ways – is this cool or is this super cool???
I provided all my services in down time, yet I generated thousands of dollars during the past 4 years, all of which I used for services that otherwise I would have needed to pay cash… except now I felt that I was getting them almost for free…
Use the Barter System as a Marketing Tool
When you submit your offer in the barter system (most companies allow you to submit your offer/s online), an email is sent out weekly to all members with all the offers that were submitted that week… Members also often go online and search for what they need and will see all past offers, as well as your profile and what services you offer.
By submitting your offer/s often (you can submit weekly in most barter companies) the more exposure you get to thousand of business owners almost at no cost (there’s no cost to submit your offers); growing name recognition for your business – a great benefit beyond the obvious desire of income generation.
What to do Before Signing Up with a Barter Company?
Before you sign up with any barter company, make sure to check out several services in your area. Simply type in “barterNew York,NY” or “Barter Club,New York,NY” (the words “barter club” + your city name) and most likely you’ll get a number of barter club names in the results. Once you found the barter clubs in your area, find out the following about the one/s that caught your eyes:
- check if they have a sign up fee and how much is it
- find out if they have a recurring annual fee
- ask how much is the fee per transaction
- find out if there are any other fees
- find out how many companies are in the system
- see if you could use the services of any of those companies
- find out whether the companies whose services you need provide 100% barter or partial barter and partial cash
- find out how often can you submit your offer/s and how many people will see your offers
- find out if you are allowed to be a member in several different barter clubs
Then once you find a company that you like, visit www.bbb.org and do a search on that company; find out if there were many complaints against them and how many of those complaints were resolved.
What to do After Signing Up with a Barter Company?
- submit your first offer instantly – make it irresistible! Again, become known as a solution provider and they’ll keep you busy…
- before you do business with anyone, find out their reputation from www.bbb.org – or since they are in your community, you might already know their reputation, or you can ask your friends if anyone has done business with this provider…
- don’t get too involved in it – providing a few (3 to 5) hours of your service per week is ok, but don’t get to a point where you work so much on barter that you don’t have time for cash customers. Remember, the electric and phone company will most likely not accept your barter dollars…
Transform Your Barter Clients into Cash Clients
If you are a coach, you can limit your offering to 3-months for barter dollars and if the client wants to continue, they’d have to pay cash. Regardless of your business, you can limit how much of your services or products you are willing to provide on barter.
For example, I tried to buy a kayak last weekend on barter and I was told that they take up to $150 dollars in barter dollars, the rest has to be the real green stuff…
So, introduce your services to as many of the barter members as possible, but don’t get lost in barter-dollar land… Well, except if you have a healthy number of cash-clientele, as well as you have surplus hours that you want to use productively, then do as you see it reasonable. The key is to keep it in balance and make sure that you generate real dollars too.
You do not necesarily have to belong to a barter club to exchange your service for someone else’s service or goods. IF you can find someone who is willing to barter with you, that’s a great way to save some money and utilize some of your surplus time or surplus inventory. I know coaches who barter their coaching directly for services such as
- virtual assistant
- yard care (cutting grass weekly, etc.
The advantage of direct barter is that, of course, there are no sign-up fees or per transaction fee – it’s a “clean” barter exchange. The disadvantage might be that
- it might take a long time to find barter partners
- you have to match the value of your offerings (unlike in a barter club where you collect barter dollars and can spend it in any way you like)
- you do not get the exposure you’d get in a barter club (giving you the potential to connect with all types of different professionals
- if you don’t get the expected quality service from your barter partner, breaking up the barter relationship can be difficult for some (as you’d have to tell them that you can’t provide your services to them any longer BECAUSE you are dissatisfied with their service – of course, you could say that you simply don’t have time to provide the services you promised, therefore you suggest ending the barter relationship). On the other hand, when you belong to a barter club, you can use someone’s services for as long as you like, without affecting your service delivery to the members of that barter club.
Barter and Taxes
The IRS views barter dollars the same way as regular $$$s; as well as your barter club will provide you with a Tax form at the end of the year. So be prepared and know that this is not tax-free trading…
Get out there and get some coaching clients – or clients for whatever your business is – through a barter club. I know you have some surplus time, or else you wouldn’t be reading my blog 🙂 So get out there and make some barter $$$s.
What are your thoughts? Did you ever barter your services or products?
Would you consider bartering? Post your comments below…
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