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Why Bartering Doesn’t Work! 6 Reasons To Avoid Bartering Like The Plague

Oh, I know, I know: money is tight and if you swap services, you’ll avoid costly fees and get what you need anyway, right? Wrong!

As a business coach, I often hear dark tales of bartering gone wrong. In fact, it’s become part of my 7 Deadly Sins of Entrepreneurship. Avoid this move like the plague!Advice to #Entrepreneurs: Avoid bartering like the plague! Click To Tweet

6 Reasons to Avoid Bartering Your Services

Bartering sets you on the path to ruin for the following reasons; it:

  1. Undermines your Value –My fave mantras is: “if they pay nothing, it’s worth nothing.” How do you charge what you’re worth when your current client is paying nothing? And, how do you later on justify your fees?If they pay nothing, it’s worth nothing Click To Tweet

  2. Moves You Down the Priority List – Somehow, your bartering partner places “paying” work above your needs and the next thing you know, your work is delayed.

  3. Less Than Stellar Service – The downhill avalanche exponentially builds so that late work turns into shoddy work. After all, you’re not paying for the work and have no right to complain, right?

  4. Eliminates Recourse – If you’re really upset about the untimely delivery of your promised service, what do you do? You can’t withhold payment because there isn’t any. And, if you’ve already delivered on your side of the bargain, what do you do?

  5. Plays Fast & Loose with the IRS – My CPA sources tell me that you’re supposed to report bartering as income, but I bet one of the goals of bartering is to avoid taxes! Clearly, taxes are outside of my core competency, but you go deal with the IRS.

  6. Ruins the Relationship – The poor experience of the business relationship often leads to the end of the relationship!

Let’s be clear: If you value your services and if you value the other person, you won’t barter. Instead, create a business relationship whereby you pay for their services and vice versa. I often smile when I think of 2 clients in particular: one $500 payment feels as if it’s gone back and forth 10 times!

BUT, we still have a great relationship. What’s your experience with bartering? Please share in the comments below.

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