In the fourth grade, it was OK to trade your banana for a pack of gummy worms.
But you’re an entrepreneur now, and bartering your awesome services for someone else’s isn’t as good of an idea as you think it might be.
Sure, it may seem like a capital notion at the time. You get something and someone else gets something with no money exchanged. Especially for startups, service bartering is tempting.
Here’s why service bartering is dangerous for startups and established entrepreneurs:
Bartering services defeats the purpose of entrepreneurship.
Full disclosure: if you think we’re about to tell you starting and running a business is about the almighty dollar, you’re dead wrong. Sure, you have revenue goals and a mission to accomplish. And you need money to do that, but it’s not the end game.
Your revenue serves as funding to manifest your mission, your dreams and the freedom you desire. So in trading services, and “saving money,” you’re not receiving the revenue required to keep going.
Money is an effect of the actions you take as an entrepreneur. Bartering puts the kibosh on that idea, which leads us to the second point…
Your business is worth way more than that.
Bartering is seductive because it seems flattering. After all, someone needs your services. But that’s exactly the point: someone needs what you have to offer.
And those services are worth every penny. Not to mention, creating satisfied customers accelerates your business growth. When you charge for services, instead of trading for them, you cast a much wider net.
As the sales rack up, you’ll receive more positive customer feedback, which you can leverage on your website and landing pages.
How do you spot a bad bartering offer?
It’s often a wolf-in-sheep’s-clothing scenario that can be difficult to spot until the damage is done.
The following situation may happen to you.
You’re a startup, and the wheels have started turning. You’re landing clients, working toward greater visibility, and meeting other entrepreneurs who offer guidance and support.
That’s great, but then you’ll find yourself in a networking event conversation that turns toward bartering. It will look something like this:
The Bartering Conversation
Other Person: So what do you do?
You: I’m an app developer. My program allows users to apply filters and photo edits to pictures without having to share them on social media.
Other Person: That’s cool. Why did you develop this?
You: Well, I started in website design, and in talking with clients, I found that many of them were sick of everything being a social platform. People simply wanted to play with their gadgets without their cousin on Facebook knowing everything they read, watch, take pictures of, and listen to.
Other Person: Man, that’s a great idea. I never thought of that as an industry pain point. You sound smart.
You: Thanks. What do you do?
Other Person: Well, I’m a consultant for an email marketing automation company. Say, why don’t you give my team access to your app, so that they can take pictures around the office. In return, I’ll give you six months off my services. You in?
No, you’re not in. Please, just tell “other person” no thank you.
While it’s important to form relationships, it would be a better idea to generate leads through your own traffic. To turn this situation around, form an affiliate program instead of a bartering offer.
That way, you’ll expand your reach, and everyone will get paid for their unique service offerings.