Need some fancy equipment or a service but don’t have the cash on hand to pay for it upfront? There may be a better solution than taking out a loan.
Find out which company has that product or service available. Then consider whether they would be interested in something your business has on offer - better yet, reach out to them. If you come to an agreement where you switch goods or services instead of cash, you’ll have yourself a contra deal.
Bartering like this is an old system of economics so it’s important to get your basics down.
First, make sure you understand the pricing of your products or services. How much are the raw materials, the basic cover costs, the man hours? This will help you determine the breakeven point for each product and give you an indication of how competitive you are in your industry.
Then do research on their products or services - what prices are considered competitive in their industry?
This will help you understand if you’re making a good deal or if you’re at risk of losing money at the negotiation table.
Whether you decide to calculate the prices on the basis of hour for hour, dollar for dollar, or project for project, get it in writing and make sure you hold up your end of the deal as if they were paying you in cash.