| When starting out as a self-employed service | | | | should cancel out. Then exchange signed, cashable |
| provider, especially in a difficult economy, you are | | | | checks made out to each other on the same |
| often faced with clients who need your services, | | | | date (the date of payment). Issue receipts for |
| want to hire you, but are unable to pay you in | | | | the transaction, then cash the checks at the |
| cash. In your eagerness to start doing what you | | | | same time. Declare the value of barter |
| really love to do, the temptation to lower your | | | | transaction as income (for what your barter |
| price or give your service away is irresistible - and | | | | partner paid you) and expense (for what you paid |
| dangerous. | | | | your barter partner). Pay all applicable fees and |
| The danger of giving away your service is that it | | | | taxes, this will keep the taxman happy and |
| tends to devalue what you offer in the mind of | | | | encourage you to evolve the relationship to a |
| the receiver. As an alternative, consider | | | | cash basis as soon as possible. You will perceive |
| non-money transactions such as barter (exchange | | | | yourself to have a real business, not a hobby, and |
| of goods and services in kind) or pro-bono (as a | | | | your business will grow much faster. Your client |
| gift, freely offered). | | | | will be reminded of the nature of the barter. It will |
| The advantage of creating a barter or pro-bono | | | | also be easier for you to maintain the |
| arrangement is that you can gain experience right | | | | professional-client relationship. |
| away. Creating momentum around your business | | | | 6. Measure your effort in the relationship |
| is very important, so the more clients you have, | | | | proportionately to the value of the exchange to |
| the better. The biggest disadvantage is that a | | | | the client. |
| barter or pro-bono arrangement can be a trap, | | | | What the client offers in barter has value to the |
| because it is very difficult to grow a successful | | | | client, but not necessarily to you. Your time and |
| livelihood based only on barter or pro-bono, | | | | energy is limited and valuable to you, but not |
| because there is no positive cash flow. And isn't | | | | necessarily to your client. You have to measure |
| that why you're in business anyways, to make a | | | | the real value of the barter goods in the client's |
| living doing what you love? | | | | mind, something that the client would not normally |
| It is possible to create barter arrangements that | | | | think of. Don't make the error of counting the |
| work for you and for your client, if you are | | | | retail value of the barter goods. A fairer |
| prudent and clear about what you want. | | | | assessment would be to consider the wholesale |
| Successful solopreneurs know that they deserve | | | | or bulk value of the goods. Make sure you don't |
| to be well compensated for the results they | | | | give more effort to the client than what they pay |
| create for their clients. Here are ten tips to create | | | | for. This does not respect the value you place on |
| and maintain a successful barter or pro-bono | | | | yourself, and it cheapens what you have to offer. |
| arrangement that results in a win-win outcome | | | | It then becomes a lose-lose situation that can end |
| for both you and your client. | | | | in resentment or hurt feelings. |
| 1. Barter is a commercial transaction where you | | | | 7. At the beginning of the relationship, set a time |
| accept goods or services in lieu of money. | | | | limit or conditions to the barter or pro-bono. |
| This is the Golden Rule of successful barter. | | | | You are in business to create a livelihood for |
| Barter is a commercial transaction, with all of the | | | | yourself, so sooner or later you need to convert |
| privileges and responsibilities attached to it. You | | | | the barter relationship to cash. At the beginning of |
| simply accept that the client provide you with | | | | the relationship, in the written contract, specify a |
| goods and services instead of cash. You are the | | | | time limit to the barter relationship (guideline: no |
| supplier, you set a price for your offerings, and | | | | more than 60 days), and specific results that |
| the client proposes to compensate you with | | | | must be attained to maintain the barter |
| goods or services of equal value to the cash price | | | | relationship. Make sure that the conditions lock the |
| you set. You have the final say as to whether | | | | client to the results and the time period, |
| what is offered in barter is agreeable to you. You | | | | considering even a cash penalty payable to you if |
| do not have to accept barter or pro-bono. | | | | the client terminates the deal early (remember, |
| 2. Be choosy, reserve barter or pro-bono for | | | | you want to make sure the client is fully |
| special cases or as a last resort. | | | | committed to working with you). Make timelines |
| For many people, spending money for an | | | | short and results tangible and measurable. The |
| intangible result is the hardest act they can do. | | | | client has to see the real worth of what you can |
| Make sure that your clients are not offering | | | | provide. Finally, the barter agreement should allow |
| barter simply because they are not really ready | | | | you (and only you) to terminate the relationship at |
| to commit to results, or because they are trying | | | | anytime or to ask for cash instead of barter at |
| to take advantage of you. If a client is not able or | | | | any stage of the transaction. |
| willing to pay money, it is a strong signal that they | | | | 8. Make it clear paying clients come first, and |
| are not ready to make a real commitment to | | | | barter/pro-bono clients second. |
| you, even though they might really need your | | | | You are offering your livelihood to create results |
| help. There should be a very compelling reason | | | | for your client. Other clients who are ready to |
| for you to work with them for barter or | | | | pay money deserve higher priority and attention. |
| pro-bono: a unique situation where you can gain a | | | | You are doing the client a favor by accepting |
| lot of experience (far more than usual), because | | | | barter, and this arrangement should not limit the |
| working with this client would give you prestige, | | | | growth of your business in any way. Barter clients |
| or because you can build your business on the | | | | get the privilege of your surplus time or |
| references that this particular barter work would | | | | resources that are not otherwise committed to |
| give you. | | | | your paying clients or to yourself. Don't |
| 3. The client should offer in barter something that | | | | overextend yourself for your barter clients. |
| you really need. | | | | Actually, this tip should read: yourself first, paying |
| Does the barter offer replace something or some | | | | clients second, and barter/pro-bono clients get |
| service that you already use, saving you time, | | | | what's left. |
| effort and money? If you regularly pay for | | | | 9. Keep control of the situation. |
| massage therapy, and a prospective client offers | | | | Barter clients are not regular clients. Barter is NOT |
| massage therapy in barter for your services, then | | | | a two way street: the client is offering goods or |
| it is real barter, since you can redirect your | | | | services in kind for your services, instead of |
| money and see real savings. But if you don't | | | | paying by cash. You do not become a customer |
| ordinarily go to massage therapy, then basically | | | | of the client because you accept barter. Failing to |
| you are giving away your services for nothing (is | | | | remember this cheapens the relationship and |
| that how much you value your services?). The | | | | works against you. Make sure the barter does |
| most effective barter arrangements provide you | | | | not get out of hand: you deserve to be well-paid |
| with the goods and services that you need, in a | | | | for the results that you create. This is a favor |
| way that works for you, first, and the client, | | | | you extend to the barter client. As soon as you |
| second. If what you need is not what the client | | | | see that the barter client is not as committed to |
| offers in the normal course of the client's | | | | the relationship as he/she was at the beginning, |
| business, then it is up to the client to go out of | | | | you should seriously consider ending the |
| their way to provide you with something that you | | | | relationship. |
| really need (see point #4). | | | | 10. Create low-cost opportunities for participation |
| 4. What the client offers in barter must represent | | | | for clients who do not have enough cash to pay |
| a substantial commitment on their part. | | | | your full rate. |
| The client should offer something that requires | | | | Create options that can help lots of people at |
| additional time and effort to create specially for | | | | once, in ways that don't require as much |
| you - it must represent a substantial commitment | | | | investment of your time, money and energy. |
| on their part. If your client makes pies and offers | | | | Options such as teleclasses, free introductory |
| you free pie for your services, this is not a | | | | workshops, group coaching, newsletters, etc can |
| substantial commitment on their part, because | | | | still help people who don't have, or are not ready |
| they will not be as invested in creating results as | | | | to commit, money for your most valuable |
| you are. The barter must represent for them a | | | | services. Clients who spend time in your group |
| visible, conscious commitment, but not extreme | | | | activities also become longer term and more |
| hardship. When they are providing you with the | | | | valuable customers, since they will get to know |
| goods or services, the barter client must be | | | | you and understand how you operate and what |
| mindful of the real purpose of the barter. Use | | | | you have to offer. Reserve your most valuable |
| your judgment. After all, you are giving up time, | | | | time and energy for clients who are willing to fully |
| money and effort, and you are doing them a | | | | commit their time, money and effort to have you |
| favor by accepting barter. | | | | help them create powerful results in their lives. |
| 5. Keep the barter/pro-bono relationship | | | | Creating a "tiered" structure of offerings will |
| business-like. | | | | ensure that the right people will come to you at |
| A big pitfall of pro-bono or barter arrangements is | | | | the right time, ready to pay you what you |
| that the commercial nature of the transaction | | | | deserve for a successful livelihood. And if this |
| tends to get blurred, and emotions become | | | | does not satisfy the client, say no and look |
| involved. Create a written, signed contract and | | | | elsewhere. There are always people who value |
| issue an invoice for the full amount. Have your | | | | what you offer and who are ready to pay you |
| barter client do the same. The two invoices | | | | the rate you deserve! |