NFIB

Barter: Traditional Practice for Today's Businesses
04/ 15/ 2002


Have you ever had trouble scraping together the cash for a marketing brochure you really wanted to do? How about the holiday party you wanted to throw for your staff? When a customer places an unusually large order and you have to throw a lot of your resources behind it, does that strain other things for your company?

Bartering may be the answer for you. A traditional practice, bartering has come back in a big way. Workshop contributor Edith Helmich shares ideas from other small business owners.

Barter involves trading one commodity or service for another of comparable value. In earlier times, barter was used more often than money, but the practice fell into obscurity over the years. Then, as now, businesses tended to have more services and products than cash on hand.

Few companies have a budget that can accommodate all the unexpected expenses, sudden opportunities, or dreams of expansion that are part of a successful business. One cost effective way to obtain the services or products that accommodate those needs is to barter.

Opportunities to barter are limited only by the imagination and creativity of the business owner who wants to try a new way of financing business projects. For example, a restaurant owner might offer to cater a holiday party for a local cleaning company in exchange for laundry services. A print shop could offer to print brochures and business forms for a furniture company in exchange for office furniture. An accountant may consider it advantageous to offer tax preparation services to a construction company in exchange for office remodeling. The possible applications for barter are as varied as the products and services that make up the business community.

There are some rules that govern how successful a bartering venture will be. Some of the basic rules are:

1. Use a marketing approach to initiate barter agreements.

2. Barter with an intent to obtain equal value, not an advantage.

3. Finalize your agreement in writing.

4. Set a timeline for completion of services or delivery of products.

5. Treat a barter agreement the way you would treat a valued customer.

It is common practice to barter individually, but a cooperative barter venture offers more flexibility and opportunity. Members of a barter cooperative typically agree to a fixed value for their service or product at the time they join. Records of credits are recorded centrally, and can be earned by providing a service or product to any member. Members may then use their credits at any participating member's business. Careful records are important and staff to keep those records can be voluntary, or paid through a membership fee -- or with barter credits!

Whether an individual or a group arrangement is used to set up a barter, the end result is a cash-free benefit for your business. Some old ideas -- like barter -- have stood the test of time and are worth resurrecting.

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