When it comes to owning a small business, you try to save money where you can. And with that comes opportunities to work with other small businesses for trade, instead of cash.
When companies are just starting out, there are a lot of needs, a lot of wants and not a lot of cash to get it all done. So you look to trade services to cut down on the cost of things like a website, a logo or anything else one might need to get started with their business. The question is, while you may be getting a deal in terms of spending less money to get the job done by offsetting the costs with trade, is it worth it?
Of course, when everything goes smoothly, anything is a good idea. But we all know as business owners that rarely that is the case. Best case scenario for trading services is that both companies agree to terms, both companies get the job done as quoted and both companies get something from the deal.
But how many times does it go bad? Probably often enough for companies to be scared off from ever trading services. The problem is, things go bad, people can be unreliable and often, when dealing with a company that is just starting out – they don’t have the business sense to work themselves out of a problem quite yet.
And when things go bad, they can easily turn ugly. Let’s say Website Design, Inc needs their office painted and are in negotiations with Wall Painters, Inc to create a website for their new business. They agree that the costs of each project are similar, so they shake hands and both get to work. The painting company gets started painting the office space, but gets half way through the project when they decide that the painting project is going to cost more than the website, so they try to charge more. The website company thinks that since they already agreed to terms, that they should finish the job, no questions asked. They cease working on the website until the paint job is finished. Now both companies are upset, neither has a finished project and no one is getting any value and has wasted a fair amount of time. Even if both companies finish the projects, neither will really be happy going forward.
If you are going to trade services or products with another company, get it in writing. You should either both write up a contract with what the agreement is going to be, or have one singular document that states the situation up front. What is to be done, when is to be finished, and what the finished product is supposed to look like. Then, there is no debate as to what needs to get done.
Bottom line? There isn’t a definitive answer on whether trading services is a good idea. Only when the services are mutually beneficial to the companies is it something to look into. But even if it’s mutually beneficial, the savings in cost might not offset the increase in management and stress that come with trading services. Before entering into an agreement with a company, make sure they are someone that you want to work hand in hand with and that you can keep up your end of the deal.