| Business bartering is one of the most effective | | | | of bartering. |
| ways to preserve cash and working capital for | | | | 3. Manage or Improve Cash flow |
| the companies that know how to effectively | | | | Bartering can be a great way to meet the needs |
| execute this strategy. Bartering is by far the | | | | of your business while maintaining a positive cash |
| oldest form of commercial transaction in the | | | | flow. For example, it's a great way for businesses |
| world, and still remains one of the most effective. | | | | with highly seasonal revenue or income variability |
| In barter arrangements, products and services | | | | to maintain operations without resorting to fairly |
| are exchanged with other parties for their | | | | expensive financing measures like asset-based |
| products and services. And everybody gets to | | | | borrowing or account receivables factoring. |
| keep their money. | | | | It can also be a way to systematically reduce |
| Using barter in your business | | | | costs of materials and services from your |
| 1. Advertising And Media | | | | suppliers. Make a list of your suppliers, and see if |
| Barter arrangements can be very useful for | | | | there are ways that you can barter with them |
| gaining placement in newspapers, trade | | | | directly or arrange a triangulation. This is especially |
| publications, and other media advertising outlets. | | | | worth it for products and service suppliers that |
| The founder of $100 million dollar newsletter | | | | you use regularly. |
| publisher, Boardroom Inc, talks about how he | | | | Potential Mistakes In Bartering |
| started his early marketing outreach by | | | | 1. Inefficient matching |
| negotiating with publications to place his ads in | | | | It may take quite a bit of time and effort to find |
| exchange for shares of stock (for each | | | | the perfect partner to accomplish a barter |
| subscriber brought in by his ads). | | | | arrangement with. If you do this wrong, you may |
| Auto dealers can negotiate radio, TV and | | | | find that your barter arrangement is not worth |
| newspaper ad time in exchange for vehicle leases. | | | | the time or the services that you put into it. Take |
| Service professionals can negotiate a certain | | | | the time to think about what you would want in |
| amount of billable hours or project work in | | | | exchange for what you are prepared to offer. |
| exchange for advertising placement. | | | | 2. IRS trouble |
| 2. Liquidate Excess Inventory Or Monetize | | | | Do not make the mistake of thinking that |
| Capacity | | | | bartering offers you a tax loophole. According to |
| Hotels with extra rooms to spare often will swap | | | | the IRS, it does not. Consult with a competent |
| these in exchange for needed services. Product | | | | CPA or tax attorney when you are ready to use |
| manufacturers can often arrange for direct | | | | bartering as a strategic part of your sourcing or |
| swaps with other companies, or even take part in | | | | cost management system. |
| "triangulation" arrangements which feature a three | | | | 3. Barter Networks and Exchanges |
| way trade of goods and services. | | | | The biggest mistake you can make here is to |
| Even if you're a service professional selling your | | | | overlook barter exchanges. The next biggest |
| own time and effort, there are ways to barter | | | | mistake is to choose the wrong one. Make sure |
| your services. In my business coaching practice, I | | | | that you choose your barter exchange very |
| have shown professionals how to turn their | | | | carefully according to the size of their network, |
| expertise into tradable product (directly and | | | | the number of members and even their level of |
| indirectly) that gives them access to the power | | | | activity. |