Here are the rules for bartering. Another way to generate money in this economy is trading goods. Wondering how to trade your cleaning services for other goods? Consider a barter exchange. It’s like a warehouse where various businesses trade their services instead of paying cash. Here are the rules to make your next barter deal work to your advantage.
Rules For Bartering
Does your cleaning business have rules for bartering? As in trading, you give me something. I will give you something in exchange.
Now I do have somebody that wrote into the show and they asked this question. “I’ve been having issues with a friend. I was trading a service. The service she provides me is about the same as me cleaning for two hours. Now I’m cleaning for four hours and she’s been leaving the whole sink full of dishes and expecting things I did when I had the extra time.
I have no clue how to tell her this no longer feels fair and I keep justifying it to myself as just helping a friend.”
The First Rule of Bartering
So, the first rule of bartering is never do it directly. You heard me never do direct trades. That is, your friend gives you something and you give something in exchange. Here’s the reason why it’s never fair.
You might be starting out as fair, but it quickly goes off balance. Now I don’t know what the service your friend is providing, but let’s pretend your friend is a potato farmer. Your friend is going to give you potatoes in exchange for you cleaning up. Very quickly, you’re at $600 a month in cleaning.
Your $600 of cleaning per month is going to go out of whack when you realize that your family cannot eat $600 a month worth of potatoes. So now you’re stuck in this deal. You’ve made this agreement, you are friends, and now you feel weird and awkward because now you’re just “helping a friend.” That’s not how to run a business.
What are Barter Exchanges?
So, I want to tell you about barter exchanges. And one of the very first jobs that I had before house cleaning was, I was a barter broker. I worked for a trade exchange called ITEX and what we did, we had a great big storehouse where people would give us their goods.
They would sell them to us. They warehoused them inside our exchange. So, let’s say that you’re a house cleaning company and you’re going to donate $500 a month, $50 an hour. That is 10 hours of house cleaning that you’re going to run through the trade exchange per month. Don’t give it to your friend, but run it through the trade exchange.
How it works is like this. You make up 10 vouchers for one hour a piece, and you give those to the trade exchange. They credit your account for $500. There are lots of companies that will say, well, listen, I’m a hotel. We have so many nights that we don’t sell. We have empty rooms sometimes, and we’ll use these as part of the exchange.
How to Use the Barter Exchange in Business
We’re going to give these rooms to the barter exchange. We’re going to sell these to the exchange. So now the hotels are available. So, I could go in with my $500 and I could buy a night at a hotel. And you say, well, I don’t stay at a hotel. I don’t need it. The cool thing is there are lots of businesses like the pet groomers and the misuses and all the different people who have smaller businesses.
It might be a house painter. It might be somebody who does ad copy for the ads that you write. It might be somebody else who specializes in direct mail marketing, who could help you put the ads together. It might be a graphic designer for your social media. It might actually be somebody who boosts social media.
We Barter in the Savvy Cleaner Program
I know that the Savvy Cleaner training program that we run is in a barter. So that instead of you paying cash for your monthly membership, you could pay with your barter dollars. You see how that works. So, what happens is with your $500, you can go in there and you can spend your money anywhere in the exchange, in exchange for your membership per month, right?
You’re going to give 10 hours of cleaning per month. Now here’s where it gets cool. Let’s say that you’re a startup business and your business is kind of slow and you’re trying to get off the ground and you’re trying to get visible. What’s awesome about this is if you only give 10 vouchers, how far is that going to go?
Well, we already know that you’re a potato farmer. $600 of cleaning a month, not five. So, what happens is they might get all of your vouchers, but here’s the catch. They got to pay the other a hundred dollars in cash.
Barter Customers Can Turn Into More Business
So, let’s say that you have several different clients and they all want to participate in your service per month. They all may only get one or two hours. And then all the rest of the cleaning, they have to pay you in cash. So, it’s a really great way to pick up extra business that starts out as a barter customer. And they may eventually, and occasionally have barter vouchers to use towards their cleaning credit.
The cool thing is once you go to their house and you do the walkthrough and you build a relationship with them, that goes on a waitlist client. So, at any time you can call them up and say, “Hey, listen, we’ve got a cancellation. I know that you’re a barter customer. Would you want to have us come over?”
So even if you didn’t sell it for cash and it’s this dead time, maybe you could sell it to a barter customer. Not only that but you get listed in their directories wherever their directories go. So now your business just went up both in the search engines and also as a another way to market your business and another way to be out there, right?
The Second Rule of Bartering
The second of the rules for bartering is to make sure that you know, upfront and you have specified how many hours per month you’re going to donate to the exchange because if it’s only 10 hours, it’s only 10 hours.
So, you don’t get to a customer’s house. You don’t do a walkthrough and then have them say, uh, well, can you do like the next 10 cleanings for whatever.
You’re not going to go off-book, you’re not going to do side deals and you’re not going to let them take away all of your cash. You’re only going to do however many hours you allot.
The Third Rule of Bartering
Rule number three, you have to spend your money inside the exchange. So, plan vacations. I know lots of amusement parks. It costs them nothing else to have barter certificates. And so, I’ve gone to lots and lots of amusement parks, and I’ve stayed at lots of five-star resorts on my barter because it’s a reduced fee. They can offer it for less money. It doesn’t cost them anything.
If someone else comes to participate, it’s a great way to use your barter dollars.
Also, if you have a team of people that you are employing, you can have a great big party, let’s say at an amusement park and you pay for all of it with your barter dollars, right? So, you have to use your barter dollars in order for it to be worth it.
The Fourth Rule of Bartering
Another rule of the bartering industry is you must pay taxes. This is considered other income. So, when the money comes in, they will keep the ledger. They keep how much money you spent, how much money you earn, and they give you a monthly report or statement that shows how much when you came in and attack a tax report at the end of the year.
So, you can pay your taxes on that. So, the rule is you pay your taxes. That’s legal, but it’s another whole way to bring in business. So those are the rules of bartering. Again, I want you to think of it as an opportunity to do business because it’s another way to get out there. It’s another way to be seen.
It’s another way to be visible. And it’s a more fair way to interact with your friend in a way that doesn’t feel so personal. Like they’re taking advantage of you and you’re just helping out a friend.
*** PROMISED LINKS AND GOOD KARMA RESOURCES ***
The Art of Barter: How to Trade for Almost Anything – https://amzn.to/3wAwBzM
The Bartering Mindset: A Mostly Forgotten Framework for Mastering Your Next Negotiation – https://amzn.to/3r95pam
The Hardcore Prepper’s Guide to Survival Bartering: Live Without Dollars and Without Debt – https://amzn.to/36xsxpq
No Cash? No Problem! How to Get What You Want in Business and Life, Without Using Cash – https://amzn.to/3xHvhN2
How To Negotiate and Get What You Want: Getting to Yes in A No, No World: A Guide to Haggling, Bartering and Bargaining Your Way to Success – https://amzn.to/3k62626