To barter or not to barter

Becky Kilimnik

Even during a stint where I had a strict no-bartering policy, I would still find myself saying "yes" to friends that would ask for small favors ("can you make a business card for me?") in exchange for small services ("I’ll watch your kids for an evening so you can go out").

Whether you consider bartering small or larger projects, there are some general guidelines to follow to ensure friendships, relationships, and reputations come out of the agreement unscathed.

1. Don’t be afraid to say no

If you’re a people-pleaser, it’s really easy to get swept into projects that take more time than the asker realizes. Your cash-paying gigs should always take precedence, because cash offers you the most flexibility in growing your business and supporting yourself. If you don’t have time, you simply don’t have time.

However, there are cases where work is slow and perhaps you really need a service that you can barter for (I’ll put together some digital content for your FB page if you can install my toilet). Or, more commonly, you want to help a friend.

In these cases, you could consider bartering, but please, look before you leap. Understand exactly what you’re bartering, and what you’re bartering for (and make sure the other person understands as well). See Item #3. Also, be wary of bartering with friends (see Item #5). Once you understand more about the project, or how that project will affect your friendship, you may or may not decide to move forward.

2. Never do anything for free

At least, not because you think it’s going to lead to a paying gig. Because it won’t. Don’t be lured by the "we’re a new business and we have no money, but once we get a budget we’ll start paying you" line. What happens when those newbie entities, with weekly turnovers in staff, suddenly do get money? They don’t give it to the guy that they know would do it for free (if they even remember who you are at that point).

If you do something for free, it’s called volunteering. And volunteering is fine, as long as you think of it for what it is. Do it for your church, your mosque, your temple, your kid’s girl scout troop, your local grassroots political movement. Do it because it gives you a warm fuzzy feeling inside and you believe in it. Don’t do it because you think it will lead to paying work. That’s not the point of volunteering, anyway.

3. When you do barter, make sure you both understand the scope of work expected on both sides

I’ll admit, I’ve bartered for a lot. Trying to be the breadwinner as a freelancer through the Great Recession meant I had to in order to survive. I’ve bartered for medical services, salon services, eye insurance, attraction tickets, babysitting, and food. Scope was usually where it would get out of control.

It’s easy to say "sure, I’ll make you a brochure" or "I’ll edit your Web site." How hard can it be, right? After all, you’re a rock star and you can churn out 5 brochures a day if you have nothing better to do. What if the other person doesn’t understand that a brochure also requires stock art, copy, and printing, and assumes you can provide that as well? (Can you? Probably not for free, in which case you’re now spending money to do something for someone else.)

The solution is to have a written agreement—a contract, yes—between you and your bartering partner, which outlines exactly what you agree do to and what they will get in return. And, it’s important to talk through (actually talking, not emailing) each of the line items that you will offer, and what you’ll get in return. Just like you would with a cash-paying client.

This isn’t just for you—it’s for the other person as well. The guy that agrees to renovate your office in exchange for a web site has equipment rental fees, supplies, and contractors or workers he needs to pay (which is why Item #4 is important).

(Along the same lines, don’t ever "barter" a retainer. There’s no telling where that will lead. It only ends in hurt —if it ever ends at all.)

4. Only barter with other entities the same size as you

One-on-one bartering is the best. Small business to small business can work as well. Don’t go taking on the big guys, however, if it’s just you. Bartering is different than contractual work, and it would be difficult for you to go after a larger entity if they did not fulfill their “obligation” (but, it would be very easy for them to go after you).

5. Bartering with friends is tricky

I have a little formula that I think best sums up whether or not you should barter with a friend:

6. Don’t ever barter for equity in the other guy’s company

Not only do countless articles warn against this common mistake, but it just doesn’t make sense for anyone. Whether we like it or not, graphic design is not considered to be an essential component for an early startup’s success. Once the company has honed their prototype, started manufacturing, received some funding and is ready to start selling to the masses (i.e. needs your services to build their Web site, package their product and create amazing digital content) they should be in a position to pay for those services. If they’re not, they’re doing something wrong (and you’d only be signing yourself up for equity in a failing business).

7. Once you enter into a bartering agreement, treat it with the same respect as the contracts with your paying clients

It’s really easy to start thinking of bartered work as volunteer work (but it's not), and you know that paying gigs take precedence. However, if you’ve agreed to do a service in exchange for another one, you are, essentially, being paid. Just not with cash. So, do right by your bartering agreement and treat that project the same as your money-paying gigs. And, don’t be afraid to hold the other person to their end of the agreement as well. Schedule that appointment for the eye exam before you’ve completed the brochure. Do your part, and collect your "pay."

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