I’ve been looking at the photo header on the blog (the pinecones and candle) and feeling like it’s out of date. Well, not only is it out of date since I took it to illustrate a story on free Christmas decorations, but I’m not sure it represents “suddenly frugal” as well as another image might. The image that keeps popping into my head is a change jar, but not any old change jar–a cool, hip change jar.
Yeah, I know, change jars are neither hip nor cool, but that’s where my mind has been going when I think about “What picture says ‘frugal’?” And in my mind a penny pincher is a lot like a frugal person, in that she’s counting her spare change and keep it in a change jar. Whatever. (Do you have another image that screams “Frugal!” If so, let me know what that is.)
Anyway, I tried taking a picture of our change jar–a bunch of coins in a blue mason jar, but I couldn’t get the lighting right so that the jar didn’t wash out or the flash didn’t reflect on the glass. So I gave up.
Then I got to thinking: wouldn’t it be awesome if I could get an illustration of me holding some sort of cool, hip change jar? Yeah, awesome if I had the budget to hire an illustrator, and given the current economy, I simply do not.
The recession aside, I think I may have figured out how I can get my illustration without breaking the bank–I’m going to barter for it.
The last time I bartered with someone was at least two decades ago. There was a design company that offered to create custom stationery and business cards for me if I, in turn, would do some promotional writing for them. Together, we figured out how much the stationery and business cards would cost, and I gave them the same value in writing services.
In some of my wedding books, I suggest bartering as a way of saving money on a celebration. I still tell the story of my friend who bartered with the limousine company that transported her wedding party. In exchange for a free limousine, she wrote a brochure for the company.
It isn’t just writers that can barter for goods and services. This recent Wall Street Journal article describes a number of companies that, when tight on cash, turn to bartering. These businesses range from movers to a refrigeration company.
This article also outlined associations and membership organizations that let companies and individuals set up an account (for a fee), and then deposit and withdraw barter dollars based on services given or received. I don’t know about you, but if I’m going to go through all of the trouble of arranging for a barter deal, I’m going to try to avoid paying for anything at all, the least of which is a membership fee in a barter organization. This Planet Green article, by the way, lists free barter services with which you can register.
So while I consider how I’m going to find an illustrator with whom I can barter my services, I thought I’d share with you these 5 tips you need to keep in mind when bartering goods and services:
1. Understand the value of a barter. Just because you want to barter with someone doesn’t mean that they’ll find value in the services that you have to offer. I’m lucky in that I know how to write and write well. Pretty much every small business needs writing services of one sort or another. The same could be said, in this day and age, for website design or computer programming. So I would imagine someone wanting to offer these kinds of services for barter wouldn’t have trouble finding any takers. Bottom line: make sure you have a service to offer that is potentially as valuable as the service you’re looking to receive.
2. Have a clear idea of what you need ahead of time. Don’t waste your time or anyone else’s by being all wishy washy about what you think you might possibly want via a barter. Come up with a concise description of what service you need and what service you can offer so that when someone asks, you can tell them in a sentence or two. If you hem and haw or sound like a space cadet, no one is going to take you seriously.
3. Do your homework when looking for potential barter partners. Like with most things in business, networking and word-of-mouth recommendations usually pay off in the long run. If, like me, you have a bona fide project for which you want to barter, tell everyone and anyone you know about your needs–and the services you can provide in return. If you belong to a networking organization or a local Chamber of Commerce–even a playgroup with other moms–let them know about your desire to barter as well. Don’t know anyone locally with whom you can barter? Then check places like Craigslist, which has an entire section, under “For Sale,” for bartering.
4. Get it in writing. When you find someone to barter with, make sure you get your agreement in writing. Not only do you want to include the basics of who and what’s involved, but also you should spell out the value of the services and the time line by which it will be completed. Remember, just because you’re giving and getting something for free doesn’t mean that you shouldn’t get a contract for the exchange. This will, hopefully, help you from getting ripped off.
5. Understand the tax implications of bartering. Again, just because you’re getting something for “free,” that doesn’t let you off the tax hook. Here’s how the Internal Revenue Service (IRS) sees bartering:
“If you engage in barter transactions you may have tax responsibilities. You may be subject to liabilities for income tax, self-employment tax, employment tax, or excise tax. Your barter activities may result in ordinary business income, capital gains or capital losses, or you may have a nondeductible personal loss. Barter dollars or trade dollars are identical to real dollars for tax reporting. If you conduct any direct barter – barter for another’s products or services – you will have to report the fair market value of the products or services you received on your tax return.”
This potential tax implication is yet another reason to make sure you keep good records about the give and take of bartering, and why you want to have your agreement in writing. Of course, ask your tax provider how he/she thinks you should handle any bartering done during the tax year. (Note to self: ask my own tax provider this question when we meet to do our taxes next month.)
Do you have additional thoughts on bartering? If so, let me know.