The concept of bartering is not new. Over the years, I have bartered services for things like accounting, catering, ad space and photography. I view it somewhat like a marriage: It's rarely ever an equal 50/50 split, and as the seasons ebb and flow, the values may shift. Recently, I had a conversation with a savvy woman who has been a financial planner and visionary for three decades. She told me that in the not-too-distant future, bartering will be a common form of trade. Facing the fact that the deficit in 2020 is predicted to be 20 trillion dollars leads to me to believe she may be correct.
Last month, I was speaking to a trainer who told me she had 30 clients in her boot camp program, but she was not making enough money. When I asked her if everyone was paid in full she replied confidently, "Yes." I asked her to pull out her roster and go through each client one by one.
It turned out that 12 of the people in her camp were there on barter. A college student offered to babysit her kids. Another said she would put a boot camp sign in the window of her business. Another offered her manicures.
She was not taking advantage of all of the services. It added up to over 3,000 a month in lost revenue, and when she looked at the value she was receiving, the scales were sadly unfavorable.
The good news is that bartering, when done right, can be a valuable asset. Let's face it; just about everyone wants what we have to offer: a fit body, longer, stronger, more energetic years and ultra-health. Our services could be far superior when it comes to bartering -- much like selling an air conditioner to a Texan in August.
With bartering services, there should be a start and end date as well as a midpoint to evaluate if the relationship is working for both parties. Put an upper limit on the value of a service exchange and get the terms in writing. Exactly how many haircuts can you get for a month of training? If you are making a net gain on your barter, that’s considered income, according to the IRS. You and the person you are bartering with must list the market value of what you receive as taxable income. Exchanges require filing tax form 1099-B. On a positive note, you can list any expenses to offset some of its tax liability.
As with any decisions you make, you should have peace about them. It's always a good rule to sleep on any important decisions. If you feel like a deal is not in your favor, don't be afraid to say no. The best barter is when you both feel that you are getting the best end of the trade.
Kelli Calabrese is the Master Coach for Phil Kaplan's Be Better Academy, an eight month transformation to discovering the career possibilities inside you. This self-searching, mind shifting curriculum unlocks the potential in trainers who desire to have a career and life they can live to the fullest.www.KelliCalabrese.com, www.BeBetterAcademy.com.
