Risky business – the advantages and pitfalls of exchanging of trading services in business
Oh yeah, we’ve all been there, money is tight, you need something done, and then a “friend” or, more likely, “a friend of a friend” or a “social media friend” pops up who needs something done but doesn’t know how to pay you, or vice versa and…
So you both come up with the bright idea of services trading.
What could possibly go wrong?
A metric tonne, trust me.
So is trading services a good idea?
Let’s break this down (pardon the pun) into digestible pieces
What are the advantages of trading services?
- You can save money – usually no money is exchanged between parties.
- ·Things get done (if all goes to plan). There will always be times in business where cash flow is tight, and in order to grow and increase cash flow, we need the skill sets of other people. Trading services is one way of achieving this goal without having to dip into cash reserves.
- You can be flexible and creative in the way you go about providing services.
- Can be immediate – when you trade services with someone who has a perceived profile you may jump the queue – for example: trading graphic design services with a business coach with a waiting list.
- Can create meaningful relationships – there is a certain amount of trust required in trading services and if the arrangement goes well the good will with each other should continue;
- Creates business network – trading services gives you an opportunity to work with someone in a different niche and this can lead to good business referrals.
- Honours different skill sets between traders – when you trade with another service provider with different skills, you are sending the message that you believe both your skills are equal value. This is an important feature to understand because often in the online small business world, coaches are given higher esteem than virtual assistants or online business managers.
Disadvantages of trading services?
- Relies on honesty of each party – there is a high level of trust required in this kind of arrangement. Both party needs to be genuinely committed to fulfilling the promise, particularly when their end of the bargain has been fulfilled. In my practice, I have seen numerous services providers, particularly VA’s, OBMs, graphic designers, and photographers who have been asked to swap services by an online business owners, particularly “business coaches”, satisfy their promise and then wait for the business coach to set aside time for comparable value of coaching calls.
- No guarantee of quality – There is never a guarantee of quality, and when you haven’t “paid” for services it is difficult to enforce any consumer protection laws.
- Usually not defined in any detail – My experience is that most entrepreneurs do not set out the relationship in any contract or document which outlines expectations and promises. These kinds of arrangements is often (but not only) done in the “honeymoon” phase of friendship when neither party would be comfortable setting boundaries.
- May not be protected by consumer protection or warranties – unfortunately, this is often the case but depends on jurisdiction.
- The swap, by its very nature may not “equate” with each other – This is an important issue to consider before the swap takes place – an example may be swapping coaching services for web design work is not comparable and it is probably not appropriate to swap time for time. This needs to be established before the arrangement is locked in so everyone is on the same page.
- It may end up with “good” trade for “bad” trade – In my 30 years of mediation, this is one of the difficult issues for people to understand from their own perspective because, if it is not defined in advance of expectations
- It requires skill and willingness to be fluid in comparison – In a trade of services you need to be willing to be relaxed, fair and honest – these are all skills that need to exist before the trade happens. You also need to be willing be patient, because sometimes (often) your trader will do things differently. That doesn’t mean it is bad, but it may be so different or off the mark from what you were expecting that it may lead to a break down.
- Open to exploitation – I could rattle off several “business” coaches and business owners who are known for their exploitation of others during trade. One coach I have seen will offer “coaching” and then hand ball her latest evergreen “coaching course with a grossly inflated price in exchange for detailed website and graphic design work after the agreement has been agreed.
So what do you need to do if you really want to trade services?
- Agreement, agreement, agreements in writing, just like you would with any other kind of business relationship. You’re not playing games here, you are trading your well honed skills with someone for a service you need. You need a start and end date and a whole lot of stuff in between, like what services will be delivered, when and how. If you need an agreement template click here.
- Be clear about your expectations – in writing, in an agreement – be reasonable, don’t ask someone to do something you wouldn’t be willing to do for another person. Make sure you set out the time to be spent by each person, tasks to be completed and have real discussions about what that might look like so it is a fair exchange. If you have a profile do not exploit that power or pressure another person into an agreement. We call that in the legal world, unconscionable conduct or undue influence. In the shamanic world, exploitation is a form of toxicity that will make you sick and will take your karmic path on a ghastly journey.
- Communicate – make sure you keep the lines of communication open, factor communication into the agreement and communication the rules of engagement. If everything starts to go pearshaped, keep communicating but do it without emotion, and try and do it in writing (so you have evidence) – stick to the facts, be honest, bring it back to the agreement and if you are not having any luck – you can always try mediation.
- Be respectful – You should always be respectful, even if you think the service trade has been complete crap, I’ll tell you why. Everyone has different standards of work, and sometimes someone’s “best” may only reach your mediocre, don’t drag them, it’s not unbecoming and it’s unprofessional, particularly if you start spreading nasty rumours. Just. Do. Not. Do It.