by Nicole Deitrick
A business will cost you one of two things: time or money. When you have less time, it will cost you more money. When you have less money, it will cost you more time. It is a general rule, of course, but look at your expenses: The more time something saves you, the more money it costs.
For example, Walmart is usually the cheapest place to shop for groceries. But when you factor in the big parking lot, the milk being in the back of the huge store and the long line you will have to wait in to check out, it probably wasn’t the fastest way to get your gallon of milk. Your other choice may be your local 7-Eleven. Park right out front, run into the small store, stand in a short checkout line, pay more than you should for a gallon of milk and be on your way in less than five minutes. Time vs. money.
When I started out as a massage therapist, I had very little extra money. I quickly learned to put my spare time to work for me. I love to barter, and I love that I provide a service others want. There are few people I have met over the years that honestly do not want a massage. In my experience, most people that turn down massage are those who cannot justify spending their money for it. But when they have a service I need (plumbing, carpeting, painting, babysitting, etc.), they are more than happy to trade for it.
I bartered my time answering phones for a hair salon in lieu of rent for the first couple of months when I first went into business. I bartered for business cards, catering for open houses, carpentry work and more. If there are materials involved, I pay for the materials but we barter for the actual service. The problem I fell into was setting clear boundaries. There were times when I provided more massage than the value of the service for which I traded. Setting clear expectations on both ends in writing will save you some headaches down the line.
There are sample bartering contracts online that can assist massage therapists in setting those clear boundaries, and also establish that this is a true business exchange.
It is also important to understand that the Internal Revenue Service (IRS) recognizes bartering as a legal tender, and expects to be notified of such transactions. Ideally the barter is an even exchange, and it should not have a financial effect on your taxes as the “expense” should cancel the “income.” The proper form to use is 1099-B, which can be downloaded from www.IRS.gov, or include it in your taxes as “other income.” Make sure to check with your local accountant for any additional information.
Some of the positives of bartering include:
- Referrals from the person/company with which you are bartering
- Barter using gift certificates that can be given out to friends and family; therefore, growing your clientele base
- Invest your time while saving your cash reserves/cash flow
Some of the negatives of bartering include:
- If you are too busy, you may not be able to justify setting time aside to “pay” your dues
- You may have a difficult time setting clear boundaries
- Barter must be equally desired on both ends
- It may interfere with your client’s boundaries, creating a dual relationship
Sometimes you may be approached by someone who wants to barter for your services, but you are not interested in what he or she has to offer (an avocado-green sink, for example). This is a barter situation that is not equally desired. The perfect solution to this type of situation comes in the form of a bartering network. This is typically a network of people with goods and services they are willing to barter. Sometimes the goods or services are listed for a dollar value; sometimes they are listed as a point value. The wonderful thing about these networks is you earn “points” or “credit” each time you provide your good or service to someone in the network. You then are able to use your credit with anyone else in the network who has something you want or need. You are no longer bound to the person who needed what you had, which opens up a whole world of possibilities.
For example, Joe the Plumber uses his credits to purchase gift certificates from you; you earn credit from his “purchase,” which you can use for brochures from Kathy the Printer. Kathy the Printer can then use her credits to have Bob the Caterer put on a spread for her open house, and Bob the Caterer can use his credits to have Joe the Plumber install the fabulous retro avocado-green sink he just picked up.
While bartering has been around forever, the recent economic situation has barter becoming more prominent in the business world. It was reported 65 percent of Fortune 500 companies barter their goods and services. The Internet makes bartering convenient, and there are many bartering sites that link up to other bartering sites—providing even more ways to gain and spend your credits. Most bartering sites charge a membership fee (either annual or monthly), a transaction fee (similar to eBay), and most will provide accounting services for your barter transactions. Bartering networks provide a fair, legal and ethical way to exchange services.
It is also important to keep in mind that barter should not replace your cash income, it should supplement it.
In our industry, we typically make money per appointment. Each appointment that goes by empty, unfilled, has essentially expired, perished. There is no way to recoup that lost income. Instead of wasting that appointment, why not recoup your potential loss with full value—points earned that can be used toward something you want or need?
If time equals money, how are you investing yours?
Nicole Deitrick, L.M.T., is founder of TradeJa, an online barter network designed specifically for the wants and needs of natural-health educators, practitioners and the bodies they work on. She is also owner of North River Body Therapies, a wellness center located in Florida, as well as a NCBTMB-certified educator for www.BodyWorkShops.com.