This is an excerpt from 19 Ways To Survive: Small-Business Strategies For A Tough Economy
If you take the time to get involved with barter and join a barter group, you may find that you have suddenly accumulated a significant number of new customers and new barter dollars. The next step is determining how you can now use these dollars to reduce your expenses. Because barter dollars may seem easy to make, it's tempting to squander them all on fun trips and merchandise. While it is usually easy to trade for just about anything, the key is to first get this new revenue stream to pay for purchases you need to make anyway. Thus, the barter dollars that your business is earning is actually paying your bills!
5.1 Paying your bills through barter
When you start to actively barter, you will find that many service-oriented businesses are willing to barter. Therefore, there is a great opportunity to reduce your business's monthly cash bills by using barter. Chances are there are services you already purchase that you can transfer over. Some candidates for switching from your current vendor to a barter company include:
- Accounting (e.g., yearly taxes, regular payroll)
- Bookkeeping (e.g., monthly management and reporting)
- Legal services (e.g., business entity creation, filing articles)
- Pest control (e.g., onsite spraying)
- Technical support (e.g., computer services, repair, regular maintenance)
When our business went through this exercise, we took a rigid stance and transferred any service to a barter vendor even if we liked the original provider. While this may sound difficult to do at first, the payoff was worthwhile; our business saved thousands of dollars in cash each year.
5.2 Paying yourself through barter
As a business owner, you typically pay yourself some sort of salary or profit sharing. Therefore, you can also use barter to chase goods and services for your own personal use. In this case, you have to make sure that you are handling the purchases you make as money drawn from the business and as always, should check with your bookkeeper or accountant to make sure you are following all the appropriate rules for your business. However, once you determine how you can pay yourself through barter, you may find a wealth of services that you can barter such as the following:
- Gardening (e.g., lawn care, tree maintenance)
- Pool service (e.g., regular maintenance, repairs)
- Personal accounting, bookkeeping, or legal services
- Merchandise - this can vary wildly from furniture to jewelry to children's toys
- Vacations (e.g., trips that can include hotel accommodations)
- Restaurant bills
5.3 Paying your employees through barter
Obviously, barter will not allow you to pay any cash bill with barter dollars; however, this doesn't mean that you can't reduce your employee expenses with barter. For instance, there are times when you may have an employee complete overtime to perform a particular task. If that task can be outsourced, chances are you can barter it. Some ways to reduce employee expenses through barter include:
• Outsource employee tasks to reduce head count: Look at your employee tasks and determine if any can be given to another vendor. For example, if you have a part-time bookkeeper, why not outsource the task to a bookkeeping firm for barter? You will reduce your employee overhead and be able to spend your barter dollars.
• Employee bonuses: With the range of items offered on barter, you can change employee bonuses from cash to simple gifts such as restaurant gift certificates or vacations.
• Company team building: Instead of paying for off-site team building activities, take your employees to a vendor in your barter network.
• Employee salaries: Occasionally, your business will have a product or service that your employees want to purchase. Rather than going through an official sale, you can also choose to barter with your employees to make the trade.
Just remember to contact your accountant to ensure that all bartering you do with your employees is consistent with local laws. In some cases the employee benefit may need to be included in the employees' payroll as it may be considered a taxable benefit.
Special to The Globe and Mail
Lynn Spry and Philip Spry are the co-authors of 19 Ways To Survive: Small-Business Strategies For A Tough Economy, published by Self-Counsel Press. This excerpt was reprinted with permission.Report Typo/Error