Three Steps to Successful Business Bartering

Have you ever traded services with another small business owner without money exchanging hands? Bartering is a way to fulfill a business need by trading. It can be increasingly popular in tough economic times.

Bartering arrangements are like any other business relationship, and there are steps to take to ensure you're supporting your small business and creating the foundation for a successful experience.

Qualify the Exchange

Before agreeing to barter, measure what you're giving and what you're receiving in return. The two components should be of relatively equal value.

And just as you would when you hire someone, be sure to check references, ask for an overview of experience and conduct an interview to make sure your personalities work well together.

Make It Official

A written agreement outlining the terms of the bartering arrangement can be the most important part of the relationship. Make sure it clearly outlines who is doing what, as well as a timeline, deadline and/or milestones for the arrangement.

You'll also want to plan your communication processes so you and your bartering partner are clear on how and when you will communicate with each other.

Treat It Like Income

Any bartering income you receive is taxable and needs to be reported with the rest of your income. Be sure to consult a tax professional for advice specific to your situation.

For more on bartering, including the advantages for a small business owner, read: Discover the Rewards of Small Business Bartering.

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