By definition, barter is the when parties swap services or resources. But in business terms, it’s an exchange that ends usually with everyone a winner. All parties involved in bartering hold onto their cold hard cash and don’t lose a cent. There’s no worries about getting ripped off as a buyer or seller, so it’s an exchange that’s high on trust, low on tension. And finally, the government doesn’t get its hands on any of the proceeds. Bartering is such a great system, it’s no wonder it’s been around nearly forever.
Historians and archeologists reckon that bartering is a human business practice for the ages. It goes back as far as written history, and perhaps even further into mankind’s (and womankind’s) history of business practices.
Between humans, the actual business practice of money came long before money was invented. In written history, as far back as 9,000 BC, shepherds used cattle as a means of exchange-from sheep to cows, camels to goats. Then when farmers came along during the course of the next couple thousands of years, grains and plants became the hot commodity in the world of bartering.
Bartering may have dissipated over the years, but it by no means went away. That’s the amazing thing about bartering. It still is, to this day, the ideal method of business exchange for some business folk, including companies with millions in assets. But it’s especially helpful for small businesses looking to get a leg up on their competition.
Listen to people talking in today’s business world, and you’ll hear stories such as the programmer who helped to code an interactive Web page for a startup graphic-design company, in exchange for a logo design for his own startup surf-board design shop. Then there’s the story of the new Internet advertising firm rolling out an ad campaign for a restaurant. Later that year, the restaurant hosted a “free” party and dinner for that ad firm’s clients.
Examples in today’s business world abound for bartering. The reason is that bartering still has many advantages to it in this modern business world.
For instance, for companies that are just starting to build up their assets, bartering is an opportunity to save their hard-earned cash. Even established companies love the chance to keep their money in the bank. With bartering, a company can get what it needs, while providing a service that the other company needs.
And because there is no money passed between pockets, the taxman does not even need to know about it. That saves you, and your accountant, the trouble of figuring out one more piece of business income or expense.
Lastly, deals involving money may whip up the old Scrooge mentality-a combination of greed and mistrust. With money deals, you may always be left wondering if you got the short end of the stick. Not so with bartering. With bartering, you get exactly what you need. And in return, you give a fair share of goods or services.
There’s no need to be a Scrooge here. Instead, the whole transaction is one of trust and understanding. Generally speaking, bartering for goods and services feels more worthwhile than paying money, whether you’re bartering for a dinner party for your clients, Internet advertising space, or whatever it is that you and your bartering partner agree to. Perhaps it’s because you can actually feel the value of your own goods and services. Or it may be just because you don’t have to open your wallet.