Recently we were looking for an internet marketing consultant to assist us with some new marketing initiatives that we had planned for our 13-year old business plan consulting firm, BizPlanIt.
We spoke to a handful of firms that seemed like they could do the job for us and received quotes in the range of $6,000 – $10,000 for the deliverables that we required. The quotes seemed pretty much in line with our expectations, so we all we had to do was decide how we wanted to pay for the work.
We could write a check out of our business bank account which means we were funding the project out of internally generated funds. We could borrow from our line of credit at the bank or even use a credit card which means that we would have financed the work from externally generated funds.
So, while we were making our funding decision, one of the two firms that we liked the best called and asked if we would be willing to trade his work for a business plan. We asked a few questions about the business and the purpose of the plan and then agreed to the proposed trade.
What we agreed to is called a barter transaction. Our purpose in writing this blog posting is not to explain the ins and outs of barter. You can find all you ever wanted to know about barter simply by doing a search on Google or by visiting the International Reciprocal Trade Association (http://www.irta.com/).
What occurred to us is that barter is nothing more than another form of finance. Barter is a financing alternative just like a line of credit, accounts receivable financing or leasing. When it is appropriate, it is perfect. It is appropriate when you have something that someone else wants or needs and they have something that you need.
IRTA says on its website that from 2001 to 2008 the annual value of barter trade increased 25% from just under $8 billion to $12 billion.
So, the next time you are trying to figure out how to pay for the new truck or the internet marketing consultant, don’t overlook the opportunity to barter.
Happy Bartering!
Have you used barter as a form of financing in your business? Comment and share your thoughts here on our blog or join the discussion on our Facebook Fan Page.
About the Author, Jimmy Lewin
I have been a member of a barter network for over 10 years and have found it a great business tool when properly planned and managed. Like any other asset, the use of bartering should be deliberate and should contribute to the strategy and goals of your business. I show you how in a new webinar series; Barter Your Way to Business Success.
http://barterasabusinesstoolseries.eventbrite.com/
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Barter can be used to finance everything from employee perks to marketing to catering. Make sure you look at your cash expenses and be careful not to barter so much that you're not able to cover cash expences! it can be easy to get carried away. When you open up to barter / trade you're tapping new markets, either directly or by plugging into an existing network, and this can bring you a lot of new business opportunities.
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I set up a bartering site in Ireland as I found myself going down the road of barter with business and I thought why not help others to develop a network of businesses who also want to barter.
www. barter-it.ie offer two platforms – one free to the public and one for business. The Members Lounge is where you can meet other like minded business people away from the public gaze
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Your right about new business opportunities, it's great!. It's like a bug and when you catch it, you find it hard to go back.. don't you think?
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This is a valuable article and great idea for anyone who is in the early stages of business start-up. Waiting until the funds are found to pay directly for all that needs doing can really slow down a business start-up. If we follow your bartering advice, we stand a good chance of cutting down the timeline between idea and income, or between idea to proof-of-concept to being an attractive investment prospect. I work with people who, as a result of the recent economic shifts, find that they must reinvent themselves as entrepreneurs rather than employees – this is a helpful concept for them to understand.
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This is a valuable article and great idea for anyone who is in the early stages of business start-up. Waiting until the funds are found to pay directly for all that needs doing can really slow down a business start-up. If we follow your bartering advice, we stand a good chance of cutting down the timeline between idea and income, or between idea to proof-of-concept to being an attractive investment prospect. I work with people who, as a result of the recent economic shifts, find that they must reinvent themselves as entrepreneurs rather than employees – this is a helpful concept for them to understand.
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Helpful article, thanks. I've switched over to bartering recently for most of anything I can get without having to shell out cash. There are a couple sites out there to use, to connect with people who are looking to trade/swap items or even services (carpentry work for auto work, etc). One of the sites I use is Baarter.com – http://baarter.com
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