Fast Start Barter System from Bob Meyer
Get immediately download Fast Start Barter System from Bob Meyer
Your children do it in school, just like when you were a kid. Remember? If you didn’t like what you found in your lunch box – say, a liverwurst sandwich or a carrot – you traded it for something more appealing. If lucky, you walked away with a cream-filled Ring Ding or a scarred rubber ball. Your kids, of course, are even smarter. They’re trading for more than their lunch, probably CD-ROMs, computer programs and the like; after all, it’s the value-charged, performance-minded ‘90’s – just like the “real” world of business, where bartering has gone big-time.Despite the views of some accountants, who occasionally advise that bartering could leave a client without enough incoming cash, businesses of all kinds are trading more than ever for various products and services. Indeed, bartering has become a business tool for thousands of companies, from restaurants to multi-billion-dollar corporations, who trade their products or services for some other nonmonetary asset. Even accountants themselves do it. Typically, companies trade what would otherwise become unused capacity for a regularly used item that otherwise would have cost cash. James Dee Johnson & Co., an eight person accounting firm in Oklahoma City, barters to mow its lawn, advertise its services and provide dental care to its entire staff. “We’ve utilized bartering through the economic ups and downs since 1983,” said the firm’s owner, James Dee Johnson.
Bartering is an age-old practice that has always been particularly common among businesses in small communities. But it has exploded in recent years into a sophisticated undertaking backed by a huge network of third-party players. Perhaps imbedded with the spirit of trade-savvy school kids, meanwhile, many business owners and executives have thrust bartering into a multi-billion-dollar industry that spans the globe. To it champions, bartering has become a vitally important tool for maximizing a company’s return on its assets while building a network of potential cash customers as well as trading partners. Bartering’s role in the performance strategies of businesses may have grown in significance during the recession of the late ‘80s and early ‘90s, when more and more businesses sought ways other than direct sales to maintain production and the inflow of supplies. Companies are “starting to understand how they can use their products and services as a form of capital to buy things they need,” said Bob Meyer, editor and publisher of Barter News, a quarterly trade journal.
“We operate a 70% capacity, but with barter it’s 90%,” said Shyka Cohen, owner of SCE Realty, a small real estate management firm in New York. In exchange for sending out its maintenance crews to paint and install sheet rock in other companies’ buildings, SCE earns trade dollars through Barter Advantage Inc., a local barter exchange, for purchasing business services it frequently uses, like printing and for employee benefits it could not otherwise afford, like dental and medical care.
UNLIMITED SELECTIONS:
The types of connections offered by bartering are virtually unlimited. To name just a sampling; Hotels unlock their rooms for advertising space in newspapers and magazines; printers roll their presses in exchange for legal services; manufacturers trade widgets for shares of another company’s stock; accountants offer tax preparation services for seats on airplanes; and employers of various kinds barter to provide incentives for employees, such as vacations at exotic resorts. “One of the nice things about bartering is that it enables you to be more generous with employees,” said Ken Mara, president of Worldwide Security salespeople who meet their fourth-quarter sales quotas, he noted, will receive Florida vacations, including airfare and luxury hotel accommodations – all paid for through bartering.
Experienced traders will carefully monitor their level of bartering throughout the year, making sure that their balance of trade dollars doesn’t get too far on either the positive or negative side.
On the other hand, some traders let their balances build up in anticipation of a major or seasonal need. Worldwide Security will amass tens of thousands of trade dollars toward the end of the year in anticipation of a major advertising campaign its usually runs in the first quarter. “When I’m planning to put on a big blitz through a radio campaign, I start banking credits,” said Mara, noting that he barters with 10 broadcast stations.
MIXING BARTER AND CASH:
In retail barter exchanges, most transactions are done completely cashless. An exception will most likely occur in unusually large transactions, say, for $1 million worth of advertising. If a deal can’t be closed with that much in trade dollars, the two parties might agree to mix cash into the deal. “If companies cannot offer their products at 100% trade, they cannot be part of Cascade,” said President Steven White, noting that cash is included in only about 5% of the trades his company brokers. In corporate barter exchanges, where trades are generally done on a larger scale, cash is more commonly included.
NATURAL FOR ACCOUNTANTS:
The growth of bartering is happening at a good time for accountants, whose diversification into different practice areas coincides with a demand for various types of business services. “Accountants and attorneys are the bread and butter of barter exchanges,” said McDowell, adding, “As CPAs become more diversified, it brings more value to them in exchanges.” He added that many CPAs get involved in barter exchanges just to see how they work, often after hearing about them from clients. Once involved, “CPAs become some of our best members,” McDowell said. “They often have clients with excess inventory, and they recommend them.
Professional services firms also make good prospects for joining exchanges because their fixed operating and capital costs don’t usually increase through bartering. “We’re a natural for accounting firms,” said White.
BARTERING IN THE FUTURE:
Like many industries, bartering is caught up in pressures to become more efficient, faster and more wide spread. The National Association of Trade Exchanges along with many of the larger barter companies are looking at the Internet, improved software programs and modern technology, to make sure bartering plays the same important role in the future and the future of business.
Get immediately download Fast Start Barter System from Bob Meyer
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