When you are an entrepreneur starting out in the world of business all alone, it’s hard to say “no.” You want people to experience your product or service so that they can go and tell others how much they love it. Inevitably, someone is going to approach you wanting the big bad “B”-word… a BARTER. It may seem like a good idea. Money is probably tight and someone is offering you a product or service you may need in exchange for what you offer. A win-win, right?

Wrong.

So, so wrong.

First off, bartering is a tax headache. The IRS knows about bartering and you have you report it like cash – but not like cash… it gets extremely confusing. Just run a little search on “reporting bartering on taxes” and you’ll see.

Next, be prepared to feel used. One of you is going to feel like you are getting the short end of the stick when it comes to your trade-off. Both of you may end up feeling this way even though one of you probably IS getting the better end of the deal. Keep in mind that one of you probably needs the other more, and that type of business relationship is never, EVER, going to be mutually beneficial.

When two people come together because they are both lacking something, nothing positive is gained. For example, someone may offer something like a “free” massage in exchange for a headshot. If I don’t have the money for a massage but I really need/want one, then it is going to sound tempting. But, what it’s really saying is that I don’t value massages enough to save money for them. And the massage therapist is basically saying that he needs a headshot, but doesn’t value my work enough to save up his money for it. (For the record, I do value massages.)

Two wrongs don’t make a right. Two negatives don’t make a positive.

Consider the most egregious ramification of the “B”-word:

It is going to devalue your service or product, whether you think it will or not.

Even IF word never hits the street that you bartered for something, that one businessperson is forever going to think of you as someone who will give away what you have for free. I cannot stress that “IF” enough. In today’s world, nothing is a secret. Assume at least five other business owners will know by the end of the day.

When word spreads that this is how you operate, lots of bartering offers will surely come your way. Maybe you can get some landscaping done at your house, a free night out at a restaurant, or some new paint for your office.

Quick question, though… will your mortgage company accept a barter, too?

Agree? Disagree?? Post your comments below!