Archive for the ‘Barter’ Category

How to Politely Decline Barter Requests

Requests for barter can be the bane of a new business owner’s existence. For a zillion reasons, barter isn’t the wonderful alternative that so many make it out to be (but that’s a different post–or several, lol).

Whatever your feelings are about trading services, the topic of this post is how to politely decline barter requests when you’re not interested. Here are some of the ways I’ve phrased this:

“I’m not accepting barter clients at the moment, but I’ll keep your offer in mind for future reference.”

“Thank you for your kind offer. I have found that it’s much more difficult to keep track of bartering (trade) services. Plus, those services have to be reported as income come tax time, without the benefit of actually earning the cash with which to pay those taxes. To keep it all simple and uncomplicated, I strictly work with clients on a cash basis.”

“Thank you for your kind offer. I don’t need [whatever they are offering in exchange] right now, but I’ll keep this in mind if I ever do.”

“Thank you for your interest. I reserve all my trade and pro bono work for my pet charities/causes.”

One additional thought:  Some might suggest tying your own offer of paid support in with the polite decline to trade, the idea being along the lines of “hey, let’s talk about how my administrative support can help you move forward in your business so you can start earning better and actually pay for the services and things you need.”

Of course, you wouldn’t word it out loud that way, but that’s obviously one of the goals we work toward as we administratively support clients. By helping them get their business organized, humming along smoothly and moving forward, they will eventually start earning better because they’ll start making faster progress on getting things done and have more time to focus on growing their business, working with more clients, and doing more marketing and networking.

However, what I’ve found is that those who offer to trade really aren’t in any position to pay for your services or have no intention of paying for your services even if they were (the use ’em and abuse ’em, get it for free camp).

And you know what rule #1 is for any target market and ideal client:  You can’t afford to work with anyone who can’t afford you. They must be able to pay in order to be a client.

For that reason, it’s perfectly sound business sense to simply decline the request with grace and not bother to even try getting them interested in your paid support. Just continue focusing on those potential clients who are eager for your support and can easily pay.

So how have you phrased things when you’ve had to decline a barter request? Please do share in the comments so we can help each other out!

To Barter or Not to Barter, That Is the Question

A group of colleagues and I were having a conversation about crappy clients who don’t want to pay professional fees.

My advice – get rid of those losers. You’ll never be able to do your best work or move forward and grow your business if you keep saddling yourself with them.

That seemed to strike a pretty unanimous chord so I asked everyone if they experienced these frustrations on a regular basis.

A member commented that she has clients who really like the word “barter,” but bartering doesn’t pay her bills.

Truer words have never been spoken!

Oh, the ol’ “barter” game. Ugh. I see those articles that recommend bartering and it’s such BS.

Bartering might work on a one-time, very quick, simple, straightforward basis here and there, but not for long-term, ongoing situations, and only if the terms are very explicitly spelled out and what you get in return is really and truly of value to you.

And I tell ya, people in our industry who barter usually get the short end of the stick in these situations. I’ve seen it time and time and time again.

They will bust their butts giving these people their all, but far too often, when it comes time to pay the piper, barter clients make it their last priority, can’t seem to spare the time once they’ve been helped or give back absent-minded, second-rate work in return like it’s a bother to them.

They have a way of conveniently forgetting the terms or coming up with all kinds of other excuses about how they didn’t get what they expected so they’re not going to honor the terms of the deal.

Oh, and don’t forget that most of these clients automatically assume that you’ll be doing work first before they have to give back in return, instead of the other way around.

I bet you did, too. 😉

Let me share a story…

Many years ago I had a client who was constantly getting involved in one new side business venture after another.

To clarify, when I have a client who has more than one business he/she wants support with, I charge a completely separate retainer for each additional business. I don’t allow them to mix and mingle work for different businesses. I’m not here to work for free and I’m not offering two for one bargains.

So anyway, this client was always trying to get me to accept stock and percentages in these new companies instead of having to pay actual money for my services.

It was always made to sound like I’d eventually make waaaayyyyy more money with these options and ownership than I would with my retainer.

I always politely declined, and finally, after being pestered to death about it for the millionth time, had to once and for all get super direct and tell him in no uncertain terms, “look, I’m just not interested – stop asking.”

Stocks and percentages that may or may not come to fruition some day don’t pay my bills today.

I also wasn’t interested in the convoluted accounting, reporting and admin involved in trying to keep track of what my shares were worth from one minute to the next.

I like to keep my life and my business SIMPLE. There’s nothing more straightforward than “I do this and you pay that.”

Well, guess what? Every single of one of these little side ventures went nowhere.

If I had accepted stocks and percentages and incentives as payment, all those months and months of work would have been done for free. And I would have had to get rid of that client because it would have soured the relationship.

No, I just am not the least bit interested in getting myself into situations like that.

If you want to accept an ongoing barter arrangement, use your business noggin and be discerning about it:

  1. Don’t give away the farm.
  2. Don’t let it take up more than 10-20% of your time/client roster. (The rest needs to be reserved for cash-paying clients.)
  3. Draw up a contract like you would with any other client and spell out the terms of the trade very explicitly (e.g., exactly what work you’ll do, how much you’ll do, what the limitations are, what the dollar value is, what you are to get specifically in return, when you’re to get it, etc.).
  4. Make it clear that if you do a certain amount of work in a month worth X dollars, you need to be paid back in kind the same month (not months down the road).
  5. Include a clause that provides for cash payment in full being immediately due if the client breaches their end of the bargain or arbitrarily decides to terminate the arrangement.
  6. Invoice for the work just like you would in a paying situation so that the client sees on a regular basis exactly what they would have been paying in dollars.
  7. Bill on the same schedule you would for any other client.
  8. Stop selling yourself short. Remember that you are giving them something of great value. You make sure they understand and remember that and maintain the right attitude about it, too, by doing all of the above.

Keep in mind, too, that “barter” does not mean “free.” You are both still required by law to report the value of each other’s services as income come tax time.

(Which, by the way, is a whole other reason I don’t like barter: having to pay cash money in taxes on income I didn’t receive in actual dollars.)

And consider this… if this were any other retainer client, they would be paying the fee upfront before you started working. Why should a barter arrangement be any different?

If they want you to work on trade, insist that they deliver their trade work first before you lift a finger.

If they are serious about the arrangement, it shouldn’t be a problem. Remember, you’re doing them the favor, not the other way around.

And for goshsakes, stop discounting your fees!

Why on earth would you think to do that? Is the client discounting their barter services from their normal cost? If anything, you should be RAISING the price of your barter services just for the fact that you are granting them an exceptional benefit that comes at a much higher cost to your business.

The bottom line is this — offers to barter and trade or give you stocks and percentages in companies are just BS ways people try to get out of paying you fairly and squarely.

It’s not your job to subsidize other people’s businesses – you have your own to take care of. And that ain’t gonna happen if you’re giving all your time and energy to clients who aren’t paying for the privilege.

Never be afraid to say no to cockamamie schemes and flat out tell folks that the only currency you deal with is of the cold hard cash variety.

Is Barter Ever a Good Idea?

Dear Danielle:

I’ve just been approached by someone who is a great contact and may be able to refer me to her clients down the road, but she is wanting to start out bartering for services. Is this ever a good idea? I’m also not really sure that I need what she is offering, but she could end being a paying client at some point.

If you don’t need what she has to offer, there’s no reason to enter into an arrangement that will only expend your business time and resources without getting anything of value in return except for the “promise” of possible referrals. Not a good business move.

I would graciously decline that offer, and instead propose that you become referral partners. You both get something of equal value that way.

Is barter ever a good idea? Well, if you ask me personally, I would vehemement shout “No way!” I have been burned several times, and this is even when expectations and agreements have been clearly spelled out ahead of time.

Are there ever any good barter experiences? I’m sure there are. But most of time, in my experience and based on what I’ve observed in other situations, it’s the Administrative Consultant who usually ends up with the short end of the stick when it comes time for the other person to live up to their end of the bargain.

People just don’t tend to value things unless they pay for them and have some skin in the game, so to speak. And let’s face it… when we’re approached by someone wanting to barter, it’s because they want something for nothing. You can’t let their poor business circumstances (including starting a business without proper capitalization) become your problem.

Now if you do find yourself with a barter opportunity that you think will be beneficial and of value to you, my advice would be to really lay the cards on the table with each other. Find out as much as you possibly can what the other person’s expectations are and what they intend to offer. Tell them exactly what you expect in return and when. Make sure there’s a high level of alignment (in terms of equal value, expectations, delivery times, etc.), negotiate the bugs, and then put it all in writing.

Otherwise, I would simply avoid situations that will only end up creating negative energy and wasting your time.

Is Barter a Good Idea

Dear Danielle:

I’ve had a businessperson approach me about bartering services. Do you think I should do it?

In theory, barter can be great as long as it’s an equal exchange that both parties feel is fair. Problems arise when people “forget” what the terms of the exchange are or don’t live up to their end of the bargain, which in reality is what tends to happen too often.

This is besides the obvious fact that barter doesn’t pay your bills.

So the first question to ask yourself is whether the other party is offering something that is even useful or of value to you. There is no point at all in bartering just for bartering’s sake.

If you do decide to barter, keep in mind that barter services are considered reportable earnings. And you want to treat the barter client as you would any other client. Have them sign a contract (be sure to very clearly and specifically spell out the terms of the trade arrangement), give them your new client welcome package, track your time and bill according to your usual rates. That will become the basis in determining the value of what they owe you in trade services.

Determine all of the details and agree to all of it BEFORE any work is ever performed. And because you will be basically extending credit, you should also work out the timelines so that you aren’t in effect waiting an outrageous amount of time for their trade “payments.”

For example, you might agree that you will both extend each other services immediately and concurrently with each party tracking his or her own billable time to be reported and “billed” to each other at the end of each month. Or it might be decided that they are to provide services to you for a month, bill you for the value of that time/service, and at the end of that month, then it’s your turn to provide an equal value of services.

I think you get the idea, which is basically that you don’t want to expend any of your business time and resources without receiving something of fair and equal value in exchange.

Another drawback to barter is that it’s frequently not treated as seriously or professionally by one or the other party. When money is not involved, people have a tendency to “forget” to extend the same professional courtesy and respect toward the arrangement as they would with any other business transaction and relationship. For example, they may blow off appointments without any notice, they may not give the work the same priority as their other work, they can be more demanding and less communicative.

You will want to voice very clearly and assertively, both verbally and in writing, your expectations for delivery, communication, trade and outcomes before you enter into any barter agreements.