Bartering is the exchange of equally valued products or services with another individual or business. Just about anything can be bartered as long as both parties involved are in agreement with the terms. Small businesses benefit from bartering by trading services and products that are renewable rather than paying cash for the same services and products.

Understand the tax ramifications of bartering. The Internal Revenue Service considers the fair market value of whatever you receive through bartering as taxable income and requires you to report it as such. Be careful to avoid getting caught unaware by reading up on bartering and taxes at the official IRS website. Search for topic 420 to learn more.

1. Get bartering advice from a professional bartering consultant.

2. Get help with bartering by joining a bartering group online.

3. Investigate the people and companies you barter with.

Action Steps
The best contacts and resources to help you get it done

Hire a bartering consultant

Look for a bartering consultant with the experience to help you avoid pitfalls on your road to success. Discuss not only the fees of such a consultant, but also obtain a detailed explanation of what the consultant will provide to you in return.

I recommend: Tom McDowell's Barter Trainer Program provides you with bartering information via training, software and consulting. The Sideroad helps you connect with experts in a variety of fields so you can get the bartering training and advice you need before considering bartering.

Log into a bartering site

Educate yourself on bartering, and expose your bartering offers to others by joining bartering groups. There are many bartering groups online, and most are free to use. Explore each site to see how transactions are handled before you list your products or services.

I recommend: Swaptree provides you with an online tour of the website so you can learn more about them before you decide to join. BarterItOnline explains all of its policies in writing so you know exactly what you're agreeing to before you commit yourself to the group.

Research the companies you barter with to ensure they are ethical

Make sure you're dealing with honest people and companies. When dealing with an individual, ask for a written contract in order to protect yourself. When dealing with a company or a corporation, take the time to research the history of the company before you proceed.

I recommend: Search the Better Business Bureau to make sure there are no complaints against a company before you agree to do business with them. Click on a state to gain access to local chamber of commerce websites so you can find out if the company you're considering doing business with is a member in good standing.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Arrange a meeting with management of local stores to discuss bartering your products or services for theirs. Go in prepared to provide solid numbers for the value of your barter offers and ask for similarly valued products or services in return.