Construction, community, and cash (or lack of) come together in bartering, an old concept that’s new again in the post-building-boom economy. While most remodelers still do business the old-fashioned way — with contracts, invoices, and checks — at least a few are among the estimated 400,000 U.S. businesses that barter goods and services.
For remodeler Jimmy McKinney, bartering has enabled him to conduct cashless transactions on services that range from painting to printing to dental benefits for staff.
“I got involved with bartering a year and a half ago,” says McKinney, owner of J&R Construction Services, of Lexington, Ky. Through a local association called the Genesis Trade Exchange, he can apply “trade dollars” to transactions with about 400 other businesses. For every $100 in services he delivers to a member, he gets $100 in his trade account, for which Genesis serves as a third-party record keeper and charges a 7.5% transaction fee.
Recently for instance, McKinney’s company did a $2,000 siding job for a restaurant in the network. He later applied that credit toward $2,000 worth of painting performed by another member. For a $17,000 attic job, the homeowner (whose business is in the exchange) paid $4,200 in trade dollars and the rest in real money.
Bartering helps McKinney do more for less and introduce his services to a wider audience. His staff enjoy it, too. Last year’s holiday party was held at a member restaurant, and “the only thing we had to pay actual cash for was alcohol,” he says.
What our readers say about bartering:
Wes Carver, Wes Carver Electrical Contracting, Doylestown, Pa.
“I am bartering a little bit with John Gemmi [Gemmi Construction]. We just bought a building/storefront on a busy street in our area and are in the midst of renovating the entire building for offices and a showroom. John’s guys are doing the finish work, and we are going to wire his showroom in the next few months.”
David West, Meadowview Construction, Topsfield, Mass.
“I have yet to barter any services. I find that there is rarely an equitable arrangement, as pricing is too dissimilar.”
Ben Morey, Morey Construction, Signal Hill, Calif.
“Most of the deep-sea fishing trips we take are bartered. The Phillips brothers, who we fish with, are some of the best white sea bass fishermen in Southern California, so we are willing to pay the price if we can barter. The other good thing about this is that the guys we fish with have introduced me to a lot of people we have done work for.”
Brad Little, Case Handyman and Remodeling of Charlotte, Charlotte, N.C.
“I’m trading handyman work with an advertiser for some print ads.”
Bill Smith, Daja Nu Design Remodeling, Arlington, Mass.
“Over the past 25 years I’ve bartered with a select few people — family, friends, and subcontractors — and found that most times I’ve felt taken advantage of. When I started up Daja Nu, one of the first rules I came up with after the Golden Rule — “This time, make money!” — was a “No family. No Bartering. No Apologies” rule. This rule has only one exception: Investors!
“If a family member or close friend wants to invest a certain amount of capital in my company now, I offer a whole package of services and payback possibilities including bartering, annual small-project work, and a five-year principal and interest payback option.
“I’ve found this to be the best solution for me since a large group of folks over the years were typically looking to me for help, and it was seriously impacting my ability to make money. Now, the help is still there, including bartering possibilities, but I’m much more up-front about it.
“I also should mention that there are IRS implications to consider, too. My best advice to anyone interested in bartering is to keep it all above board and be up-front about any expectations — not only for yourself, but for your payback of time for your services.”
Charlie Graves, Graves Bros., Rochester, N.Y.
“I am a member of IMS Barter, a Rochester–based company that barters services between IMS members.”
Ed Cholfin, Advanced Kitchens, Atlanta
“We have bartered specific services in the past with customers. I am presently working out a trade for services with my photographer that she proposed. Each opportunity needs to be assessed on a case-by-case basis to see if it is viable for us and the other party.”
Dennis D. Gehman, Gehman Custom Remodeling, Harleysville, Pa.
“We’ve always done bartering, although we may not call it that. Here are some ways we’ve bartered, listed by what we did first followed by what we got:
1. Made a custom pencil-post bed in exchange for a copier;
2. Did free design work on a commercial project that won a national CotY Award for a marketing/graphic design business in exchange for graphic design for our business;
3. Did exterior capping on a radio station in exchange for radio spots;
4. Set up showroom displays for a high-end appliance dealer in exchange for them referring us to install appliances for their clients.”
Steve Taylor, Synergy Basements, West Chicago, Ill.
“In the past, we have performed basement remodeling work in exchange for IT work. It works out well when you do this because both parties involved get services they want done at cost. We actively look for trade partners who are interested in this venue.”