BARTER IS THE OLDEST WAY OF INCREASING PROFITS

By Scott Davidson

Barter Expert

Ask 100 entrepreneurs and you will get 150 different stories about how they have used barter.  Some have just traded products or services with another company, some will use local barter companies with a limited number of members and then there is ITEX, an international barter organization with thousands of members worldwide.

Can You Use Barter?

Ask yourself:

Ø      If business slows, will you have to lay off well trained, trusted employees? 

Ø      Do you have inventory that you can't move just sitting on the shelf costing you money?

Ø      If you can turn your unused capacity and inventory into lawn service, painting, entertainment, supplies, marketing support, printing, equipment repair, etc., would you?

Ø      Do you have customers that wait for you to have sales and reduce your prices before they come in?

Ø      Are you so busy that you don't need any more business, however, you do have some products that you wouldn't mind getting rid of?

Ø      Do you have employees that are filling the day with busy work because there is not enough real work to do?

Ø      Do you need to add more space because you have too much slow moving inventory?

Ø      Could you use the cash you save by using barter to grow your business?

What Barter Does For Your Company

Yes, the case for barter is in the numbersthe profit numbers.  What Entrepreneurs very rarely think about is their unused capacity and what it is costing them.  The cost of extra space to store the products that aren't moving.  The extra cost of paying employees for busy work that is not profitable.  The extra cost of discounting products or services that aren't selling.  The extra cost of taking cash out of your business for personal expenses.

Barter keeps your employees sharp and motivated.  This works in two ways for Entrepreneurs.  First by keeping your employees busy you keep them sharp.  Second... by using your barter dollars to reward your employees, you keep them motivated.  During slow times, your barter business may allow you to keep your valuable employees instead of having to lay them off and then incurring the cost of trying to rehire or retrain new employees when business gets better.  If you can keep your staff in place during tough times, you will be in a better position to take advantage of the inevitable recovery at your competitor's expense.

Even companies that are so busy that don't need any more business can use barter to move products that they would normally put on sale.  You will be able to keep your pricing in tact by selling your products through the barter organization.  You can bank your barter dollars for use when you do have time and need to spend them.  No matter how busy you are, you can always use more cash flow in your business unless you are in the service business and you are selling your time for money.  In this case, you may not have any excess time to sell.  This is when you would turn off your barter offering and only turn it back on when your time frees up.  This is when you would use the barter dollars you have banked during an earlier time to generate additional cash flow.

How South Florida Entrepreneurs Are Using Barter!

A local Entrepreneur that sells toner uses barter for services that would normally cause him to take cash out of his business.  He then reinvests the cash he saves to buy more inventory that he can move quickly, giving him more buying power and helps to increase his profit margin. 

The Sales & Management Group www.mybizuniverse.com, a business consultant for Entrepreneurs, offers unfilled seats to workshops and other services on barter during slow times of the year.  They use the barter dollars to rent boats and take customers up the intercoastal or on fishing trips.  This helps them keep their customers happy and their bottom line positive.