It's guest post week here on New Venture Mentor and today we have an awesome post from Nikki Yeager about how you can use bartering to help you start building your business when you don't have the money to pay for what you need. Here's Nikki:
One piece of advice I always give my clients who are starting businesses on a budget is to barter, barter and then barter some more. I've yet to meet an entrepreneur who has fewer than 50 marketable skills. In the same vein, only two entrepreneurs I've ever met have had enough money to start their businesses without major financial sacrifice. So why aren't we trading those skills for goods and services that usually contribute to startup costs?
If you're new to bartering, here are some questions that will help get you started:
What do I need and what do I have? This one is obvious, but so few people do this mental calculation. When considering starting a business (or growing your current one), make a list with personnel, physical and financial needs in one column and available resources, skills, and money that you have in the second column.
For example, my newest company provides holistic products to pregnant women. When I did this exercise with my partner we first asked ourselves what we needed. The answer: printed reflexology socks, educational consultants to teach clients the proper use of our product, and endorsements from qualified practitioners. What we had between the two of us: $2,000, an idea, marketing and design skills, formal education in Reflexology and Polarity Therapy and a sales plan.
To get started, we matched up items from category one and category two.
We ended up trading a referral listing on our site and feature on our blog for peer reviews by fellow Holistic Health Practitioners, we gave a wholesale discount and speaking gigs to practitioners who were willing to do educational sessions for their clients and the $2,000 was freed up to buy inventory. All in all, we were able to buy product, build a partnership network and create sales people out of local practitioners with no more than $2,000 in cash because of the power of bartering.
To replicate this, simply inventory your resources and your needs on a sheet of paper, then get creative in matching them up.
What can I offer this company or contact? The key to bartering is to figure out what you have that specifically relates to another person's wants or needs. This is different than the point above, because it's not just a matter of labeling what resources you have, but how do your specific resources benefit the companies and contacts surrounding you?
I like to use this principal at networking events. When I start conversations, I don't just introduce myself and then explain what I do; I start conversations with probing questions. What are the needs of the person I'm talking to? If they provide graphic design services, how do they promote themselves? Do they need help getting clients?
As someone who has a background in sales, I can help optimize a website for lead generation or give concrete tips on how to up-sell current clients. In this particular example, I have something that makes me a valuable contact and potential bartering partner. If I happened to need graphic design help, it would be easy for me to suggest a barter arrangement since I've already identified my value add.
When you focus a conversation on how you can benefit the other person, you will (1) understand their business and what they can offer you on a much deeper level because you've gotten to the heart of what they do and (2) have a natural segue into suggesting a barter arrangement because you'll know exactly how you can help.
Can I trade my business' products or services? I always prioritize bartering my business' products or services over unrelated personal skills. Why? By giving someone a sampling of your products or services, you are creating an advocate for your business.
If I were to trade a pair of reflexology socks to someone in exchange for help writing educational content for our subscribers, I'm getting a service I need while still getting my product out into the world. The person helping me with content may end up giving my product a good review on our website, recommending my company to friends, and/or buying additional products in the future.
Doing this, you'll still get goods or services that you need but you're also creating a future customer and advocate.
In short, any service, good or product you need to start a business will come at a price, either dollar-wise or barter-wise. Before a single penny leaves your pocket, ask yourself “is there a way to get this without spending money?" With this mindset, you can lower your startup costs until they're nearly nonexistent.
Nikki Yeager is an Entrepreneur, Writer, and Startup Consultant. She currently sells non-gendered children's clothing through her clothing line, Every Bean, and is Co-Owner of The Relievery, a holistic products and education brand.