Someone recently asked how barter actually saves me money as a business owner. I was thrilled to answer her question because the subject of barter is one of my favorite topics! In fact, as a business coach (I coach residential maid services in business growth), I have a popular workshop on that very subject called, of course, "Barter Is A Guaranteed Sale". Business owners who get stuck in a rut and stop thinking "out of the box" don't always "get it" at first. It takes a while to sink in. I know, because I was one of them, for too many years. I argued "why would I barter with you; I'd rather have the money". Here's the deal, when you barter you are bartering with someone who won't hire you for whatever reason (can't afford you, not sure they need you, uncertain of your skill level). A barter client is supposed to be someone who was not your client in the first place and are not planning on hiring you. In other words, you never convert a "cash" ("cash" meaning "paying client" whether by check, credit card, or real live greenbacks) client to barter, that's a mistake and evidence that you don't understand barter. You convert those "no thank yous" to barter! If they have what you want or need, you've just made a guaranteed sale on your light days! Now, if you barter for something you don't need, don't want, or can't use then you've wasted your money as it will cost you something to deliver your portion of the barter. Also, if you pay more than "regual price" for the barter then you will also waste money unless your margins are extremely low. If you are in a labor driven business (a business like maid service) your margins are pretty high so you can only barter for goods and services you need and at prices you would have paid. (by "margins" I mean the cost associated with delivering your part of the barter--your labor costs)
Let me illustrate for you:
If I'm in need of about $1,000 worth of printing (brochures, business cards, stationery) and I have no money in the bank to pay for it, I know I'll have to sell about $2,000 worth of cleanings to pay my printer (because my direct labor cost on the cleanings will be a little more than 50%, I can't sell just $1,000 worth or cleanings. I'd only have about $450 of profit to buy my printing). But, if I knew another printer in town that will match the price I was quoted by my existing printer (who, by the way, won't use my service because "he lives in an apartment and doesn't need cleaning") and who lives in a big house (the new printer, that is), has kids and pets and "would love to have housecleaning but can't afford it right now" I have the perfect barter opportunity! He's not a client any way. Your not his customer because you've been using the other guy for years. That is the perfect barter contact. If he's been getting cash out of you he's not likely to barter, but since you aren't his customer he has very little to lose and his wife will be thrilled with their new maid service! The best part of all, you only clean their house on your "light days" so for a maid service that would be a Monday or a Tuesday, never a Friday. He gets $1,000 credit for maid service (or mail him 10 $100 gift certificates) and you get your printing NOW! You'll deliver your $1,000 worth of cleanings over the course of 10 weeks or 20 weeks, depending on whether they go with weekly service or bi-weekly service. So, you just got your $1,000 worth of printing on "credit / no interest"! And now, the best part--if they fall in love with having their house cleaned every week (and who wouldn't!) they will either hire you to continue or you will come up with more printing projects for them to do! You sold that work on a light day, so you didn't turn down any "cash" clients for his spot, your employees got more work on their schedule, which makes them more happy with their paycheck, and you didn't write a check out of your checking account for the printing. You paid approximately $500 plus payroll taxes for that $1,000 print job!
Let me illustrate for you:
If I'm in need of about $1,000 worth of printing (brochures, business cards, stationery) and I have no money in the bank to pay for it, I know I'll have to sell about $2,000 worth of cleanings to pay my printer (because my direct labor cost on the cleanings will be a little more than 50%, I can't sell just $1,000 worth or cleanings. I'd only have about $450 of profit to buy my printing). But, if I knew another printer in town that will match the price I was quoted by my existing printer (who, by the way, won't use my service because "he lives in an apartment and doesn't need cleaning") and who lives in a big house (the new printer, that is), has kids and pets and "would love to have housecleaning but can't afford it right now" I have the perfect barter opportunity! He's not a client any way. Your not his customer because you've been using the other guy for years. That is the perfect barter contact. If he's been getting cash out of you he's not likely to barter, but since you aren't his customer he has very little to lose and his wife will be thrilled with their new maid service! The best part of all, you only clean their house on your "light days" so for a maid service that would be a Monday or a Tuesday, never a Friday. He gets $1,000 credit for maid service (or mail him 10 $100 gift certificates) and you get your printing NOW! You'll deliver your $1,000 worth of cleanings over the course of 10 weeks or 20 weeks, depending on whether they go with weekly service or bi-weekly service. So, you just got your $1,000 worth of printing on "credit / no interest"! And now, the best part--if they fall in love with having their house cleaned every week (and who wouldn't!) they will either hire you to continue or you will come up with more printing projects for them to do! You sold that work on a light day, so you didn't turn down any "cash" clients for his spot, your employees got more work on their schedule, which makes them more happy with their paycheck, and you didn't write a check out of your checking account for the printing. You paid approximately $500 plus payroll taxes for that $1,000 print job!
Barter is a guaranteed sale! Once you really "get it" you will ask every single prospect who inquires about your service, "so, what do you do for a living............" If they do not convert to a cash sale, keep their name and number an contact them later if they have something you can "trade" for (and only if they did not convert to a client)! I have a full two-hour workshop on navigating barter relationships. There are many, many ways to deliver your barter jobs in a more profitable manner than you think! There are also pitfalls and perils you MUST know about before becoming a "Power-Barterer"! I do about $20,000 in barter a year through an organized barter association called ITEX. You can get burned or you can leave money on the table, and you can get in trouble with the IRS if you don't know what you're doing. The safest way to manage barter is through a "trade" organization. I have a terrific broker (Gary Smith) who is very helpful. For information on my "Barter Is A Guaranteed Sale" Audio CD, visit my website. If you enjoyed this post, please comment! I welcome your feedback. Or visit http://www.themaidcoach.com/
