Trading Post

This story appears in the April 2000 issue of Startups. Subscribe »

Last year, freelance public relations consultant Virginia Randall received free dry cleaning in exchange for her professional expertise. While clean clothes certainly don't pay the bills, this kind of bartering arrangement does have its place among homebased entrepreneurs. In a classic bartering arrangement, professionals exchange goods and services in lieu of cash, just as Randall did with her local dry cleaners. This obviously isn't a recipe for getting rich or even staying solvent, but it is particularly helpful in those inevitable downtimes.

"There's nothing worse that meeting a new client and showing them a resume with big time lapses," Randall explains. "But bartering during slow times can really keep your work up-to-date and allow you to get products and services you don't have to pay cash for. It's also great PR for your business."

Obviously, you need to exercise discretion when entering into barter arrangements. Be sure you're dealing with clients who, in exchange for your services, will offer something equally valuable. In other words, you don't want to create a marketing plan for a local food retailer and receive a free turkey in return. And you don't want to let barter get in the way of attracting paying clients. Randall, who advises entrepreneurs to never let barter business take up more than 25 percent of their time, also stresses, "It's a good stop-gap but certainly not a mainstay."

For more information on bartering organizations around the United States, visit the National Association of Trade Exchanges at Nate.org.

Julia Miller is a Los Angeles-based writer who specializes in business and marketing. She can be reached at juliam129@aol.com.