Last week, an entrepreneur who was interested in one of my services offered – rather than paying for my mentoring program – to “exchange our services” instead.
In other words, I would provide her with my service in exchange for hers.
Is this something you’ve already done?
I’ve noticed that it’s quite a familiar practice among entrepreneurs, more especially among:
- Women (whose work has been so undervalued for so many generations that it is difficult for them to feel comfortable with the idea of making money, whether consciously or not)
- …who struggle to make a living from their activity (I have NEVER met any entrepreneurs who fully live off of their business and trade with others. NEVER.)
- …and/or who have a less than ideal relationship to money (who have many limiting beliefs in regards to their self worth, are not very open to receiving and associate money with negative thoughts and aspects).
Whatever the type of activity, I STRONGLY discourage this sort of practice.
This is why I discourage exchanging services without money:
>> Exchanging services without payment is a waste of time and money.
By making some “room” in your agenda for this client, it prevents you from actually serving a “paying” customer, which therefore considerably reduces your potential turnover.
In my case, for example, I never take more than 3 new clients per month (for quality reasons and in order to be able to mentor each of them with the required availability). If I were to “give” away a free spot, in doing so I would reduce my sales to a maximum of 2 that month (not to mention that I also have a maximum capacity in terms of the number of clients I mentor simultaneously).
Basically, the more you give away your services in exchange for others, the more you reduce the time you can monetize. By doing so, you therefore reduce your potential (monthly and annual) turnover.
Even when you are far from being at full capacity, it is important to “leave some room” for your future clients…
As we all know, “nature loathes emptiness”, unless you fill your agenda with a whole bunch of things “to keep yourself busy until you have more customers”, it is unlikely that your long-awaited customers will actually show up…
>> Exchanging services without receiving money prevents you from investing in your business.
One of the main reasons why I never give away my services for free is that I have fees associated with each client.
Included in the rates of each one of my services is the compensation for my time but not only! It also includes:
- The hours spent by my assistant for the administrative follow-up (the drawing up of the contract, invoices, creation of the document sharing space, answers to various questions…) which are paid by the hour,
- The depreciation of the various investments I made to set up my services (creation of online tools for clients, numerous training courses, a certification to have the right to conduct the “Financial Archetypes” test, as well as consultations with the lawyer who drew up our contracts that protect both the client and my business, etc.)
- The costs directly related to the proper functioning of the service itself (a quality internet connection, rental of workspace in some cases, payment of additional services such as in my situation, the institute that conducts professional personality tests for my clients, etc.)
All in all, it’s several hundred euros that are directly reinvested for each new registered client as well as for other professional services and products.
Even when this is not yet the case (in the start-up phase of an activity for example or before reaching financial equilibrium), not receiving money in exchange for your services slows down one’s ability to invest in the future.
How can we surround ourselves with qualified professionals to continually improve our services if we do not maximize our revenues?
>> Exchanging your services without receiving money is NOT a civic act.
For each exchange of value, a part of it is given to the state in the form of taxes. Except in the case of an exchange of services: no invoices means no taxes!
Regardless of one’s political views, we can all admit that we are lucky enough to benefit from public infrastructure. Paved roads, schools, hospitals, libraries, electricity, clean water at hand… our lives would be very different if everyone managed on their own (and they would also be a lot more stressful, and shorter… as history has shown).
As an entrepreneur, we are fortunate enough to be able to contribute to the collective welfare through our activities, but also through the value we create and the contribution of our taxes.
To exchange services is to steal from the community.
>> We do not declare our exchange, we settle it between us, we escape from collective exchanges that are regulated by money and allow social redistribution which benefits everyone (and for those who think that the tax redistribution is not high enough, make sure you then generate more value so as to contribute even more strongly to the taxes of your own community/country!
>> Exchanging services without receiving money does not guarantee results.
Without an exchange of money, no right to complain or claim is possible in the event of any wrongdoings on behalf of either party.
>> If the client disappears without giving any news, all the work provided by the service provider will have been in vain. It’s time, energy (and money or at least a loss of income) that is lost forever.
>> If the service provider disappears, decides to stop along the way or does not fulfill his or her mission in terms of the required level of quality, the client has no possibility of appeal… It’s impossible to get a refund for the lost time and unfulfilled expectations!
Investing in a particular service is a strong commitment on both sides:
- This allows the client to commit to maximizing the service provided to them by becoming highly involved (and therefore achieving the expected results, possibly even beyond that).
- This allows the service provider to commit to fulfilling their mission (including an obligation of means set out in the service contract or agreement).
For my part, the few times I tested an exchange of services (at the very start of my activity), the results were nowhere to be found. Without investment, nor taking risks outside of the time invested, it’s a lot harder to have the discipline to follow through with the entire process (on both sides!).
Not to mention that the “real customers”, those who actually pay, will always have priority when it comes to their to-do list and agenda. Therefore, the collaboration could well possibly go down the drain as soon as one of both parties has a work overload.
In conclusion, I strongly advise not to exchange services with anyone.
However, if you really want to work with someone who is also interested in what you offer, my advice would be to charge each other!
This money exchange (even if it appears to be the “equivalent of not paying yourself”) is the guarantee of:
- Maximizing your respective turnover potential,
- Increasing your investment potential, in regards to your services and your activity in the broader sense,
- Fulfilling your civic duty as a creator of value,
- Maximizing your results & those of your client
I hope this article proves useful to you. Feel free to share your comments or questions at the bottom of the page!
Solène is the Chief Empowerment Officer of Creators for Good.
She developed a methodology that allows Global Citizen to start and grow their own impactful businesses from anywhere in the world – and with no need for investors or government support.