By Wayne Mates
Cash can be in short supply for many entrepreneurs, especially solo practitioners or small businesses. Particularly, if you are in startup mode, you will want to preserve money until you know if you have a viable business opportunity. Cash conservation is king. So rather than spending cash, trade your services for the services or products of others.
First, why does barter work? It works because your service or product is traded at a wholesale value for the wholesale value of the other business’s product or service. It may look like a retail trade but it is really your wholesale cost vs. your supplier’s.
Second, in many circumstances, it allows one or both parties to rid themselves of excess inventory. Have too much of X in the warehouse, rather than have a sale, barter it away. Figure out who could use it and offer to make a trade for something of value that they have. You both reduce your inventory exposure and gain something of value you can use. Granted, you may have to pay your inventory supplier for what you traded, but you now have something of value in its place to use in your business.
Let me give you an example of how barter has worked for me. My publishing company produced a series of Town Almanacs in Maine. I relied on advertising revenue to cover costs and produce a profit. Most of the advertisers were local businesses and some were low on cash. There were instances when I traded “space” for goods. It would not be unusual to trade for gift certificates, meals at restaurants, hotel rooms or office supplies. I even traded once for a washer and dryer which I needed. Many of the items were used to reward staff, while others were used for business promotions. They were all of value to my business. And, of course, the ad space was of value to my customers. No cash traded hands and the transactions were for the most part off the balance sheet.
What can you trade for? You are not likely to trade with a large national company or store, so focus on bartering with local businesses. What do you need? Office space, office supplies, web design, internet hosting, rooms for meetings? What can you offer to secure what you need? It doesn’t need to be your main product or service. It can be something entirely different which may be useful to another business.
You can find many business barter sites on the internet. I have not used any of them so I cannot vouch for them. They are certainly worth visiting to get some ideas on what you can do. Anytime you can trade services and/or product, you will come out ahead.
Illustration copyright and courtesy House of Paincakes
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