Most of the time you will have to work in exchange for money. After all you still have to pay the bills. But there are times where your services are just what someone needs; and their services are just what you need. Instead of making a monetary exchange, you can swap services. There are some perks to this method of working that far outweigh the perks of getting paid in cash.
Pros of Trading Services
I am a big fan of swapping services instead of money for many different reasons. Here are a few that stand out:
Tax Implications – While technically taxes should be paid on all services, goods, or cash that comes into your possession, I often find that trading services leaves it more open to interpretation. Considering most trades are for relatively low monetary amounts ($100 or less) I feel it is easier to just trade rather than keep track of money coming in and going out.
Bigger Better Work – If I were to charge for my services the other party would have to come up with the money, I would have to create an invoice, and I would have to cash a check. By trading services all the busy work is skipped so I can put more time into the project. This means that they end up with a bigger value than if they had simply paid me, and I expect the same from them.
Relationship Building – Trades are done because it’s a good deal for both parties, and they feel it costs them less than if they were to purchase the services or goods. This helps to build the relationship, and in the future they may either hire you for pay, or refer you to a new client. It is all about networking, and the little favors go a long way.
Cons of Trading Services
While there are great benefits, you have to be careful not to trade too much. There are a few things to look out for:
Tax Implications – Claiming the monetary value of the trade may put you in the dilemma that you owe money next tax season. This could mean that your trades, which did not net you any cash, cause you to owe money to the government.
Paying the Bills – Trades are great, but they will not put food on the table, or keep the lights on. There is a line where you have to say “No” to the trade and pursue work that pays real money.
Being Used – Some people just want to take from others without giving back. A trade should be an even exchange, yet there are people that will take $100 worth of work for you, and only give $50 in return. When this happens all you can say is, “fool me once…”
Wrapping it Up
Trades are great. I can get what I need for a little extra time and effort instead of cash outlay. And at this point in my life I am still young and can put in some long hours. While I make sure to keep clients around that bring in regular paychecks, I like to trade for those small projects that come up just here and there.
Do you prefer to work for trade or for cash? Why do you feel one is better than the other?
