Regardless of the economy, small businesses the world over are champions of doing more with less. The goals are lofty and far too often – bank financing is hard to come by and cash flow is stretched way too thin. Smart business owners have looked to barter for centuries and today; well, barter is the new, hot thing!

Barter can do a lot of things for today’s small business:

• First and most importantly, it can turn excess into liquidity, via a barter exchange by carrying their trade credits on their books. Few small businesses operate at 100% capacity all the time. Liquid assets carried on a company’s balance sheet translates immediately into better financial ratios and positively affects financial benchmarks like EBIT and EBITA. The more bankable your company is, well the easier it can be to get bank loans, better banking terms or even position your small business for a future sale.



• Barter can improve cash flow. When you can turn your excess into something that your company needs and that you are currently paying cash for; you can redirect your cash into other areas; which in turn, can increase your profit margins.



• Companies that barter, rarely pay full retail. Consider this – when you barter your services, your are in essence paying with the hard cost of your own goods or services. Because barter is done retail to retail; you are actually purchasing with an instant discount. Depending upon your small businesses’ cost of goods sold, you may be purchasing on barter at .40 cents on the dollar. The savings of course, is cash that positively impacts the bottom line on your Profit & Loss statement.



• Barter is a great way to rewards key employees and a stellar way to compete with other businesses for talented employees that you may not be able to otherwise afford. In many cases, it is possible to pay key personnel less than they would receive working for your competitor, if you provide benefits such as vacations, day care, massages, dry cleaning, gift certificates for fine dining – all of which can easily be obtained via barter. Studies have shown that salary is not the top reason why key employees stay with their employer. After a certain point; it is all about the perks and the benefits.



• Companies that have seasonal merchandise are a natural for barter. Rather than move out-of-date inventories for a fraction of normal retail; barter at full retail is usually a much better financial option. In addition, companies that have left over hard-goods inventories in small quantities can move them via barter and turn into something else – advertising, janitorial services, asphalt… the sky is the limit.

Small businesses that consider barter as a business strategy gain all the way around. In good times and in bad. Using what you have to get what you need and want is smart.

Be smart. Trade smart.