Bartering for Small Biz: Deciding What to Barter

Regardless of whether you are in the early stages of your sole proprietorship or are a seasoned entrepreneur, you may have considered non-monetary ways to exchange goods and services.  And you aren't the only one.  Numerous small businesses opt to utilize bartering to save money and make use of overstock.

Bartering involves exchanging a set of goods and services for another set of goods of services.  And note, there is usually no exchange of money in a barter relationship.  Before you start humming the barter melody, you'll have to give some thought as to what you want to barter. 

What to barter?

Does your company have excess inventory? Or maybe you have excess space that you lend out in exchange for using another company's machinery.  Some non-monetary arrangements may trade advertising space for web design services.  Consider variables such as seasonal trends for your business, the value of what you are offering for barter, and flexibility regarding timeliness of the exchange.

Luxury or necessity?

Some barter arrangements may give your business access to services or items that you wouldn't otherwise have been able to consider.  And while that may be great and forward-looking to exchange for inventory or technology that would be unique and interesting, if your business is struggling to stay afloat it is vital to seek out barter relationships that you actually need.  Look to barter things that will preserver your company's budget---i.e. saving on something that you would have spent money for, but instead can receive through an in-kind exchange.

Sample barter agreement

Here is a sample barter contract to take a look at.  You can work with an attorney to customize a barter agreement for your small business.

• Sample Barter Contract/Exchange Agreement (from .docstoc)

You can also view sample forms & contracts on FindLaw:

• Forms & Contracts: A to Z (from FindLaw)

Related Resources:

• Short of Cash? Barter! (Small Business Notes)
• Barter Organizations and Contracts (Examiner)
• Make purchases without cash (CNN)
• Guide to Business Barter (Business.com)
• Choosing a Business Structure: the Sole Proprietorship (FindLaw's Free Enterprise)
• Pros and Cons of a Barter Exchange (FindLaw's Free Enterprise)
• Taxes 101: Bartering and Uncle Sam (FindLaw's Free Enterprise)