As we start to pull ourselves out of this recession it’s important to understand how the art of bartering can assist us to improve sales, profits and allow us to close more business.
Many business owners are leaving deals on the table as they have lost, or are not aware of the art of negotiation and barter.
In the early days of my business many sales were closed by bartering services so that the business deal could be consummated. Many times the client or I were in a cash crunch and we negotiated and bartered to close the deal.

The exchange of services and cash were crucial to the survival of the business.

Stories of bartering exist in my family since I was a child so I believe I gravitated to it more naturally in my business development. My grandfather was lobster fisherman in the spring, a farmer throughout the summer, a logger in the winter time and he also had his own gravel pit. When did he and my Grandmother have time for 11 kids? (That’s a story for another time)
I remember many family stories of fields being ploughed, or the delivery of produce to pay for services that were needed around the farm. People have been bartering since the dawn of man. There is no proof of a society or economy that relied primarily on barter but there are many examples in history of major countries bartering their wares for other products and services.
As a business owner you can barter to purchase what you need or want, and pay for them with the additional sales of your goods or services.

Bartering helps improve cash flow as it allows you to pay for what you need with your own goods or services, allowing you to preserve working capital for other expenses.
When you use barter, instead of cash, to purchase needed goods and services, you reduce your cash costs by paying for them with revenue generated by incremental barter sales. This means that new sales are made by bartering which help reduce cash outlays for overhead costs. Obtaining these overhead services through barter rather than writing out a cheque saves you cash.
Bartering can also allow you to move excess inventory and improve inventory management by converting excess products into valuable goods and services. If you barter, you avoid having to liquidate excess inventory through drastic discounting.
So the art of bartering and negotiating can help companies enhance productivity and put inventory, equipment and employees to good use, creating new revenue that would not have been available otherwise. That new revenue can be used to finance the purchase of new equipment, raw materials or services to support the business. Essentially, a company can move less productive assets and exchange them for more valuable goods or services through the help of a barter exchange.
Bartering benefits your company and your clients with a mutual benefit in exchanging goods and services rather than cash, and it also enables those who are lacking hard currency to obtain your goods and services.
In the last year I have recommended some of my clients to join “Trade Exchange” a local Kelowna company to help expand and grow their business. Using a trade organization helps foster new relationships, markets your products to new range of potential clients and helps you to Build your Business.

Donald Robichaud is the President of FloodLight Consulting and can be reached at 250-768-9415

This entry was posted on Wednesday, March 31st, 2010 at 6:05 pm and is filed under Sales. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.