Awhile ago, fellow writer Peter talked a little bit about barter, and how to use it when a client has no budget, as well as a few other tricks. We always think money makes the world go round, but if you're working with an individual, stand alone businesses, there's a lot more than money to work with. I've done quite a bit of bartering in the past year, and there's a few steps to make sure it's a win, win situation for both sides.
1. Determine the Value: This is the biggest portion of what the barter will consist of. Things with an intrinsic value typically don't work well in a barter situation. This intrinsic value on your side can work in your favor if you play it right. If you are shooting for a client that would add to your portfolio, that is worth far more than the items you'd be exchanging. The reality is, items and services that have a set price are the easiest to barter with. If you are working with a client with a set monetary budget that doesn't match your fee, substitute the rest with barter that equals your full fee. This is great, especially if it's something you plan on buying down the road.
Example: We recently bartered a full wedding for design services. Over $6k worth of services. We agreed to this because we believed it was worth the value of the services exchanged and they were things we needed. We are getting ready to launch three new websites, and also needed client print correspondence. These were things we could have done ourselves, but felt that the flow with our current brand was imperative. We had worked with the designer on our previous brand, and he approached us about the barter because he was getting married and knew we were in need of the other services. The key was that it is a wedding we are extremely excited to shoot. If it was a client that we weren't excited for the wedding, the barter would not have been worth the same amount intrinsically and worth the monetary exchange.
2. Timing: This is a touchy subject for both sides. In the wedding industry all money is received prior to the wedding date. Ninety-nine percent of wedding photographers do this, it's nothing unusual. So if we were looking to exchange services, we'd expect whatever we were to barter, to be received in full prior to the wedding. In the case of some services, it might be worth more to the other party to do half prior and half after. This is all dependent on each party, and is a case by case basis.
In our wedding that we bartered, all the design and logos that we have bartered for are due before the wedding. We typically work with a three payment system with our clients. So if you are working with a deposit, you need to figure out if the deposit is worth waving. In our typical case, when we get a contract back, the deposit is due at the same time. In this case we did not put an immediate date on the deposit that we usually do. But, there are still three exchanges of goods, all prior to the wedding.
3. Contractually Sound: Your contract states a money for goods and services. Set up your barter contract with your lawyer. You don't need to have a different contract drawn up each time. Get a general contract that allows you to swap out the goods and monetary value. In this case, you also need to have the monetary value outlined in the contract should the other party not deliver. They should be responsible for the full fee, if they are to back out on their end. It would forfeit the barter on their side.
Our contract for barter, replaces the payment system as a barter system, with dates that the items are due, just as if it were a monetary payment. There is also a paragraph that outlines what were to happen if one client reneges on their portion of the agreement.
4. Join an Organization: This is not a must do, but there are organizations such as ITEX, IMS, and the IRTA. There are also area specific barter organizations. In Maryland and Virginia we have Barter Systems Inc. Do a bit of research on the organizations and see if they can help you. If you already have a couple companies you would like to barter with, start a conversation, the worst they can say is no.
We are not part of an organization, due to the fact we do a case by case basis. If we were to start building a house, or start a venture that we would need an influx of services, we would join because it would be beneficial for us to save the money we would other wise spend on those services.
5. Think Outside the Box: I know a lot of photographers barter sessions with each other. Which is an easy way to get your own family session, free of charge. But what if you need clothes, a hair cut, or even landscaping work? Barter! If it's a company that needs an updated set of photos for their website, outline it to them! Offer the services in exchange for the goods. Barter obviously doesn't pay the rent, but it can help in a multitude of other cases.
Last year, I traded photos for a crossfit membership for a set number of months. Which would have been almost $800 out of my pocket. In that case they approached me since I worked out there, and offered monetary compensation, in return I offered up the barter.
There are people out in the world who live 100% off bartered services. Tap into other things that you might also do, whether it is graphic design, web design etc. You might specialize in weddings or commercial photography, but you can still barter head-shots to a law firm in exchange for contract services. Be sure to check with your accountant on the taxes.
I'd love to hear some creative ways that you've used barter in your business! Post them below!