Exchange Rate

Use barter to build your business.
Magazine Contributor
2 min read

This story appears in the May 2007 issue of Entrepreneurs StartUps Magazine. Subscribe »

Question: I just started my own web design firm and don't have much money left for anything else now that I've bought my new computer, printer and software. What tips do you have for making my company's dollars go further?

Answer: One way to conserve cash is to use barter to build your business--that is, swap the products and services your business produces for products and services offered by other companies that have what you need. Let's say you're looking for someone to help you contact local newspapers, TV stations and websites to pitch stories about you and your company. If you can find a publicist who needs to redesign his website, you may be able to convince him to waive all or part of his fee in return for helping him with HTML coding and programming. Likewise, media outlets such as newspapers and radio stations are often receptive to bartering advertising slots for products and services they need.

However, recognize that while barter may be a good deal for you now as a one-person business, it can become expensive once your company grows and you need to pay employees to help you fulfill your barter obligations. Also remember that barter transactions are taxable events and need to be recorded "on the books," just like any other sale. For example, if you ordinarily bill out your time at $100 an hour and you spend 10 hours redoing your publicist's website, you're going to have to report sales of $1,000, which is the fair market value of the job, explains Brad J. Taylor, a Springfield, New Jersey, CPA who works with small and closely held businesses.

Rosalind Resnick is the founder and CEO of Axxess Business Consulting, a New York City consulting firm that advises startups and small businesses. Reach her via her website at www.abcbizhelp.com.

More from Entrepreneur

Get heaping discounts to books you love delivered straight to your inbox. We’ll feature a different book each week and share exclusive deals you won’t find anywhere else.
Jumpstart Your Business. Entrepreneur Insider is your all-access pass to the skills, experts, and network you need to get your business off the ground—or take it to the next level.
Create your business plan in half the time with twice the impact using Entrepreneur's BIZ PLANNING PLUS powered by LivePlan. Try risk free for 60 days.

Latest on Entrepreneur