Bartering Revisited

Last year, I wrote a post about bartering (see Bartering Services, 8/24/09). At the time, I wondered if bartering was a viable option for my own business.

As I write this, I am negotiating just such an agreement with a client. We are, luckily, in a position to provide each other with services that our businesses need. Set up properly, this will be a win for both of us.

So, here are the items I am keeping in mind as we prepare the paperwork.

• cost of services provided are the same for both of us - an equal trade
• the services being provided benefit both of us
  
• that we have consulted our respective accountants and lawyers to ensure proper documentation

I am excited by this new avenue for my business. While I can't do it frequently, as cash flow would suffer, I think bartering could have it's place.

How could bartering benefit your business?

Bartering Services

A fellow designer emailed me the other day. She had a client who wanted her to design a brochure for him. For payment, he would advertise her business.

Was this a fair trade?

I gave the best advice I could. Mainly, to contact her accountant and lawyer to make sure she arranges the trade properly. Secondly, to make sure the trade was even - dollar for dollar.

This weekend I picked up the September issue of Reader's Digest. In it was an article entitled Swap Nation by Jeff Garigliano. How timely.

It turns out, my advice was pretty sound. The IRS looks at barter agreements as it would a cash transaction.

The article piqued my curiosity. In this economy, is bartering a viable solution for small businesses like mine? What do you think?