Smarter to Barter
While the economy was crumbling at their feet, Americans began to wonder if the “money blanket” they had always covered themselves in to provide security and happiness was worthy of their trust. Soon, they began to search for options to get the things they wanted and needed without exchanging money. Welcome back the barter system and networking.
According to Wikipedia, bartering is a medium in which goods or services are directly exchanged for other goods and/or services without a common unit of exchange (without the use of money). Barter usually replaces money as the method of exchange in times of monetary crisis, when the currency is unstable and devalued by hyperinflation.
Bartering for small business offers many advantages over cash exchanges. For startups, bartering for marketing services can save $1000’s of dollars. Such as a photographer who needs a website developed, hooks up with a web developer who needs professional photos for his websites he is designing. They trade services and wha- la, they both get what they need to better their business and it didn’t cost a dime. Another example would be a merchant gives goods to another organization to be sold at an event. In return, the merchant receives free advertising for their business. Get creative, I am sure you can barter your talent to someone who needs your serives/product. According to the IRTA (International Reciprocal Trade Association) business-to-business barter transactions generate $12 billion annually through the modern trade-and-barter industry.
If bartering for services and goods sounds like a good fit for your business, keep these facts in mind when getting started. Be sure to attach a time or money value to your service or product. You want an even exchange so everyone is satisfied. In addition, bartered goods are taxable. According to the IRS tax website, “Income from bartering is taxable in the year in which you receive the goods or services. Generally, you report this income on Schedule C, Profit or Loss from Business Form 1040.” You might also consider a barter exchange group to quickly get your business in the mix. These normally operate on trade credits, which can be spent at a later time with other members of the exchange.
While bartering is flourishing as an option for small business during difficult economic times, another technique is also gaining momentum. Networking offers business owners and sales representatives the opportunity to make themselves known, often resulting in sales and long-term business relationships.
Networking has become one of the most popular ways to get in touch with potential business associates, locate old friends, and find romance and even to launch your career. The World Wide Web has made our world smaller by offering expansive social networks like Facebook and MySpace to get people talking. According to iStrategy Labs, the social networking site, Facebook. has experienced 246 percent growth in 2009 among users age 35 to 54. What? That’s right 35 to 54. Even more surprising, that demographic is doubling every month. People are online and networks are growing. Online networking has gone viral.
If you’re an entrepreneur, it’s almost essential to have an online presence and even participate in some social and business networking. From going to meet ups to find potential clients to a birthday party to find a maybe co-worker, get out and talk about your business. Networking face to face is the best tool, and to get face time, we can do it more efficiently with online networking. Businesses from large corporations to Joe’s Pizza Shack are getting a Facebook and Twitter account and seeing results. Connecting on a one-on-one level is the new black for business. Networking online allows business owners to accomplish this without physically being there.
So, armed with all this information, you might see why it just seems smarter to barter and nicer to network. At least until the economy allows America’s purse strings to loosen up a bit.
(Illustrations by: Aaron Murray)