The other day I was telling my son about someone I was trying to recruit into my barter exchange. To my surprise he said he hoped they won’t join. When I asked him why he said that too many of the businesses that I barter with go out of business. I couldn’t help but laugh out load. He’s right! Too many do go out of business and I think I know why.
First, let’s be honest here; cash is better than barter. Yes, I said it…. and it’s true. So with that in mind, any business that already has all the cash business they can handle shouldn’t bother with barter. So the businesses that should be using barter are the folks who would like more business than they currently have. Many of the organizations in that category are great healthy businesses that simply have some excess inventory or service capacity that they want to take advantage of. These are folks with vision who can think outside of the box and are interested in new ways to expand their business. Those are generally the best people to barter with.
Another group of potential barter partners are the folks that have businesses in various stages of failure. These are folks who are using barter in desperation because their business is going so badly that they are willing to try anything to keep it afloat. As you may have guessed these are less than ideal people to barter with. Not only are relationships with these businesses often short-lived, but it is not unusual for people to be more …. morally flexible… as their financial situation goes downhill.
The solution is simple; Use barter as one of your many tools to keep your business profitable so you never fall onto hard times. Use it early. Use it often. Find a mentor who has experience with barter to help you get the most out of it. Businesses that I’ve bartered with don’t fail because they trade. They do however sometimes fail because barter was their last resort.