The Art Of Bartering While Bootstrapping
The Art of Bartering While Bootstrapping: Startup On A Shoestring - Part 6 of 6
Be A Gunslinger.
When you’re building a business, especially bootstrapping and doing it for the first time, plan to fly by the seat of your pants every once in a while. Things move fast, agility is key, and the one who masters his or her resources most efficiently perseveres.
About three years ago, I co-founded a company called Pixilated. Pixilated provides photo booth services for events; weddings, corporate, bar/bat mitzvahs, birthday parties, trade shows, conferences, etc. We built and configured our own equipment to create the most refined, efficient photo booth services company on the east coast.
Without diving too deep into the technical side of the business, allow me to divulge the situation in which Pixilated was launched. We were attempting to build and systemize a highly technical, labor-intensive, trend-driven business with intentions to grow nationally by way of franchise or some other similar turn-key format.
We launched at the end of 2011, while the economy floundered. We were not a necessity at any event; at least not as essential as a caterer, DJ or band, venue…you get the point. We were simply an add-on, an accessory...a photo booth. People weren’t spending money.
But guess what!? We killed it. We killed it because we made the decision to not work for money, but for value. It was a new angle. A necessity.
Sure, our initial plan has changed course several times since day one, but we continually assess, and thus, continually grow.
Side note: Did I mention my wife was 5 months pregnant when we started the business? Or that my first son was a two month old when I quit my 9 to 5? Or that I had to sell my house to make ends meet when we had our second son only 15 months after the first? We were cash strapped and had a short runway.
It was during this period that I honed one of my greatest skills: the ability to barter.
Barter like it’s the fuckin’ Wild West
What value do you bring to the table? Do people want your services? Do they need your product?
Trading products or services, in some ways is actually better than buying and selling, especially in the early days of a cash-strapped startup. Here are the four reasons why:
- Exposure – When you barter, it’s a two-way transaction. It’s a buy and a sale at the same time, assuring your product is alive on the street, or that your service is in action and on display.
- Practice – When people are trading, the agreement tends to be a lot more loose than when people are buying or selling. This lax nature lends itself well to trying out new methods, new technology, training employees, etc.
- Testing – What a great opportunity for proof of concept, right? Rather than have someone pay for the next big “flop”, a barter agreement for something of lesser value (or even a donation) will relieve the pressure and let you fail quick and move on.
- Value – You might have something that people are willing to trade big ticket items for. Test the waters…figure out what your true value is. It may be more than you think.
Assess What You Have. Assess What You Need. But most of All…
Know your COST!
Is it a product? Is it a service? What pain points do you relieve? What’s your value?
There are a lot of factors that play a part in bartering. Most of all, you need to know what your cost is. How much does your product cost to produce & deliver? Be sure to factor in the labor and materials necessary for your service.
What about your time? At the early stages, when you’re broke YOUR TIME is your proverbial “Ace in the hole.” As your business matures, the value of your time as founder/partner/CEO/what-have-you skyrockets and your time must be a factor.
In it’s infancy, your business needs you to add value without cost – so roll up your sleeves, Boss-man.
At Pixilated, we focused on trading with big brands for exposure at large events. We traded for ad space with publications both online and offline. We continue to donate our services to large charity events, and often are rewarded with sponsorship status and all that comes with it. We’ve bartered with small bars and restaurants to test new photo booth software and equipment because it guaranteed us a sample audience on an “off-night”.
Interested in bartering with Pixilated? Get in touch!
Bartering Tip, Tricks, “Dos & Don’ts”
- Know your worth, find the synergy, and equate value. Make sure the trade is fair, but also make sure the other party vibes with you. If you aren’t on the same page from the jump, this isn’t the right trade partner for you.
- Don’t be cheap!
- Close the loop. Be very clear about what you are giving and getting. Gray area leaves you vulnerable to be taken advantage of.
- Let people know you are open to bartering. If you don’t ask, or put it out there, you may be missing opportunities!
- Convert your trade partners to customers. What better way to demo a product or service? Make it so good that they keep coming back even after they’ve got nothing left to trade (except for $$$!)
- Only barter with the real decision makers. Typically sales people and account execs are not good trade partners because it doesn’t directly affect their commission. Make sure they can “walk the walk” and deliver on their promises.
DOWNLOAD THE STARTUP ON A SHOESTRING
Please let me know your thoughts in the comments section below. Thanks!
This article, The Startup Scene Is The New Wild West. Be A Gunslinger is the final part of my six part Startup On A Shoestring series.
Part one, 5 Tips To Starting A Business On A Shoestring Budget can be found HERE.
For more tips, follow Nicolas China on Twitter @Nico_C7.