| In these tough economic times, it can be difficult | | | | really need advertising, you might make an |
| to obtain funding through the usual channels of | | | | advertiser a 1.2:1 exchange in their favor. Yet, by |
| lending. Fortunately, there are many nontraditional | | | | the same token, if one of you has to perform |
| sources of funding which other small business | | | | special services to complete a barter transaction, |
| owners have relied on in the past, and which you | | | | make sure that any contract reflects that these |
| can use to your advantage. Here are just some | | | | costs will be extra. |
| of the resources you might want to consider: | | | | 3. Special offers to customers One final method |
| 1. Friends and family Many small business owners | | | | for funding can come from offering customers |
| have used funding from friends/family to get their | | | | discounts for volume purchases, advance orders, |
| small business off the ground. If you are going to | | | | and similar agreements. You should especially look |
| go this route, it makes sense to have a written | | | | for minor benefits which can be provided at low |
| agreement specifying the terms of the loan, | | | | cost (or no added cost) to the customer, and use |
| repayment, interest, and so on. This can prevent | | | | these freebies to make your special offer more |
| many arguments and hurt feelings if the business | | | | enticing. Even if you have a service, the same |
| struggles early on. It also creates clarity for the | | | | basic principle can apply through the use of gift |
| small business owner as to whether or not the | | | | certificates or free consultation. Just be certain |
| business can be a profitable operation. | | | | that there is an eventual expiration date, or some |
| 2. Barter with other small business owners | | | | other adjustment for when your expenses |
| Through barter, it is possible to find another | | | | increase. In summary, with a bit of shrewd |
| business owner whose products/services can be | | | | planning, many sources of funding can be found |
| exchanged with yours. However, as with the | | | | which are atypical, yet highly useful to the new |
| friends and family option, you'll want to specify in | | | | small business owner. Still, when creating any |
| advance what the terms of exchange are, | | | | contract, it is strongly recommended to have an |
| preferably in dollar figures for services performed. | | | | attorney review the terms and conditions of any |
| Keep in mind that the exchange need not | | | | agreement so that common pitfalls are avoided. |
| necessarily be a 1:1 exchange; for example, if you | | | | |