Every small business will eventually be faced with the prospect of entering into an exchange of services. You’ll ask yourself if you should forgo the revenue opportunity. The answer is usually “Yes”. Here’s why.

While you don’t get cash, you get services you would otherwise pay for. This reduces expenses, and in many cases enables you to take steps to improve your business which you could not otherwise afford. Your accountant will tell you to record the transactions as revenue on both sides, and to issue credit notes. She is right – this way the amount of business you conduct is still reflected in your overall revenue totals – important for many reasons including figuring out how much work you’ve done for how much money.

The major caveat has to be – are the services offered in return services you need or want? This is not worth doing just for the goodwill – although goodwill does factor into the decision. To get around this, I recommend never broaching the idea of contra services unless the other partner has indicated a need for your own. It is rude and potentially sabotages relationships to discuss purchasing services, then suddenly suggesting that you will pay in kind.

“I would be open to discussing exchange of services, if that’s of interest to you.” Stick to this line as your way on introducing the concept. It ensures that both sides are willing, and don’t feel obligated to play along.

Removing that imposed obligation is critical, because it allows you to benefit from a new perceived obligation – an alliance. When a service partner has performed services for you, you will feel obligated to refer them. It’s natural, and you can speak from experience about how well they executed. You don’t get the same perceived obligation in a transaction where money changes hands – think how hard it is to get testimonials from your customers.

The trick to making a barter or contra job work for you is for it to be roughly equitable. Be up front about this for best results. “I normally charge $2500 for this – how does that compare?” If the answer is $2000 or $3000, you are in the ballpark, and this should work fine. Don’t be stingy, but don’t give away too much for free, or you will build hidden resentment.

Finally, also be up front about passing through direct charges for materials, sub-contractors etc. These are not the important parts to making this work – so don’t lose money on them and build value for your own services instead. Even if you aren’t being paid.

They are a relic of the past. There are still a few industries which prominently feature finders fees as a way to incentivize business referrals, but there has been a marked move away from these in the past decade.

The reason? it began with the corporate malfeasance early in the millennium at companies like Enron and Tyco (I was in Sr Management at Tyco when the CEO and CFO were indicted, and know the culture first hand). Out of these debacles came new standards of corporate governance, including the widely adopted Sarbanes Oxley – which by the way isn’t law in Canada, but is a de facto standard for corporate governance.

Governance guidelines like these were designed to eliminate kickbacks, and ensure supplier selection fairness. Interestingly these were more of a problem for public sector suppliers, but that irony went largely unnoticed. Kickbacks and finders fees had way too much in common to eliminate one, and not the other. The very thought of finders fees raised eyebrows in corporate accounting, and the concept soon was banished from most major organizations.

This has eventually trickled down to Small-Medium Enterprises, to the point where asking about finders fees is generally considered distasteful or insulting. There are a few industries where they still are common, interestingly including human resources and recruiting – folks you might think would be early adopters of new governance standards.

So what’s the alternative? The generally accepted one is mutual referrals. This is actually a great alternative, because as the bonds between referrers grow into a strategic alliance, accountability increases – which can help assure customer satisfaction on both sides. This is clearly aligned with the aims of referrals.

The hurdle is one of inequity. If you expect the value of referrals to be equally matched, you are destined to be disappointed. Instead, look at any of this business in either direction as “found” – work for which you did not have to do the business development. And rely on that increased accountability – it can end up being more lucrative to have reliable partners than reliable volumes of referrals. Because the goodwill that they generate is transferable to you, and builds your own credibility. And in these days of good governance, the subtraction of finders fees allows mutual referrals to become self governing.

Twitter and Facebook for B2B? Really?

I have to admit being resistant to acknowledging that these social media conventions might have a place in my business - or that of my clients and colleagues. But I realized that I was being old school, and didn't really know enough to judge. So I thought that I would invite in my friend and colleague Kim McLaughlin of Lyra Communications to fill in the gaps for me and a few clients of the same mindset.

So what did I learn? Well Kim was quick to disappoint me. You can't make money on Twitter, she said.

But wait, you can extend you network, promote your expertise, deliver information, and develop relationships. Hmm... these sound suspiciously like all the precursors to business development excellence. There's just no active selling. That's okay, active selling should be the least of your business development activities. What this sounded like was referral marketing, and word-of-mouth campaigns - the two mainstays of SME business.

And Facebook? Well, it may be less important, but it works in essentially the same way. But on Facebook you need to be a person, not the company you represent. Fair enough, that's the basis for any lasting relationship, business or otherwise.

And then there is YouTube. Video is changing the landscape for information, conveying personality, and most importantly extending reach. Canadians spend more time watching YouTube than reading books. Guess this changes my plans to write that pragmatic marketing bible I've always had lurking in my head.

The time involved in managing social media properly, and using it as an effective tactic for your company's strategy (Kim reminds that it isn't a strategy in itself) frankly scares me. I have trouble getting through all my e-mail, let alone tweeting and updating social networks. But that's because I didn't grow up with it the way the rising generations have, and to them it's second nature. And e-mail is old fashioned. My 20 year old co-op student might be a great choice to tweet on behalf of Growth Path - and I can feel good about giving him the opportunity, and in joining the social media revolution.

For my weekly business networking group, I was recently examining how women tend to be better at building relationships, but men are better at using them strategically. These are generalizations of course, but they got me to thinking about strategic alliances and networking relationships in general.

Strategic alliance can have a tremendous effect on your ability to build your business without adding extra resources & infrastructure. These abilities can help you close more business, and bring in business from new directions. That’s what’s in it for you. The questions most people don’t ask is why the other partner would want this relationship. Because it will help you, and you’re a nice person? Because you might, eventually be able to direct business their way?

Answering the WIIFM question should be a priority. A solid rationale can help cement a deal. To return to the gender differences in approaching this, and I’m going to generalize – not stereotype – men tend to ask this question up front. And they aren’t offended if someone asks it of them. Women are much more inclined to evaluate character and working style to determine a fit.

There is value in both approaches – and the risks are quite different. In one, the relationship will sour if the results don’t match expectations. In the other, if the process of working together gets too difficult, the relationship is jeopardized. What gets interesting is managing a strategic relationship that isn’t confined to a single gender – it makes us think in alternative ways – and that’s always good. And being able to address WIIFM from either perspective should be part of your planning process in developing strategic alliances.

“If you build it, they will come.” The line is from the movie Field of Dreams – a fantasy, but many people seem to think this about having a booth at a trade show. If we have a booth, everyone will stop by. Alas, that is seldom the case. Now I don’t plan to get into the aesthetics of booth design or how to make it appealing, or the value of giveaways – which I’ve never had use for but too many others I respect swear have value. Regardless of the appeal of your booth, preparation is key to success.

I break this prep into two pieces – booth prep, and attendee prep. Booth prep is how your booth team responds to passersby. Attendee prep is how your team walking the floor does so effectively.

Booth prep:

I’ve always been a proponent of a brief Booth Camp before the start of any trade show you exhibit at. This involves gathering every person who will work the booth – or hang around it – for a 20 minute session to get them all on the same page.

1) Hone their pitch. You have about 7 seconds to tell passersby what you do, before you lose their interest. Be able to succinctly describe what your company does, and the value in this.

2) Have an engagement strategy. Many people like to open up with a question – “How do you do this…? Does your company need X?” This will engage some, and intimidate others. Some launch right into their pitch. “Hi, We help owner-managed companies grow.” This cuts losses immediately because the uninterested move on – but you may lose the opportunity to engage. A third approach is an attempt to draw passers-by into conversation “Glad to be in here when it’s so cold outside today.” None of these will always work, but some are better suited to your personality than others, so do what works for you. Or mix them up.

3) Make eye contact. None of the above have a chance if you don’t lock eyes.

4) Record leads. If you depend on sifting through business cards later, you’ll be amazed how many people run out at trade shows. Or have two-sided cards with no room to scribble notes. Have a simple lead sheet to fill in name, company, phone, best time to follow up, and any notes on special interest. This enables tracking the leads to see how many result in meetings or sales later on, to truly judge the value of the trade show.

Attendee prep:

1) Have a purpose. This could be to identify suppliers, meet potential clients, or just gather competitive info.

2) Review the list of exhibitors. Know who is there, and who you want to see.

3) Use this list to schedule meetings in advance. If there are half a dozen key contacts, send them an e-mail asking to meet for 15 minutes – no more – and set a time. Don’t schedule meetings back to back – they will run late or run long, and you don’t want to be the one running late. Try not to schedule more than 5 in a day.

4) Be certain to drop by to say hi to people you know. This establishes your presence, and give you something to discuss later. If they aren’t there drop your card at their booth and scribble “Missed you – we’ll catch up later”.

And now you know why people say “I’m working the show”. Now make your presence at the show work for you.