The 5 Most Important Ways Bartering Can Jumpstart Your Business
June 18th 2020
- ATTRACT NEW CUSTOMERS
- INCREASE MARKET SHARE
- IMPROVE CASH FLOW
- UTILIZE EXCESS CAPACITY (BUSINESS WASTE)
- EXPAND YOUR PROFESSIONAL NETWORK
Starting your business can be tough, especially when there are so many obstacles you need to overcome. And that doesn’t even include the amount of money needed for startup capital. Because the businesses community is ever changing, you, an entrepreneur, will need to adopt now more than ever. New startups or businesses that have started within the last year or two are of specific concern.
Bartering is one of the oldest forms of business. Although this form of commerce dates back farther than we know, it has come back stronger than ever. Here are the five biggest ways bartering through a barter exchange can jumpstart your business. If you don’t know how a bartering exchange works, please check out our homepage for helpful resources.
1) ATTRACT NEW CUSTOMERS
Let’s say you have the best concept, service, or product out there. Regardless of what anyone else says, attracting new customers is no easy feat. One of the best ways to gain brand new customers is by utilizing a bartering exchange. A bartering exchange will market your business to their existing network and help send you new, unsolicited business. Especially in the early stages of a business, exposure is everything. You never know how a customer’s experience can help you exponentially grow and gain more customers (this is extremely beneficial when your business relies on referrals).
For example, let’s say you’ve just opened a new restaurant. Since you’ve just opened up your doors, you don’t have a consistent customer base yet and are slow during the week. Being able to barter a few tables’ worth of meals at your restaurant during a slow week is a smart way to keep your serving staff happy and busy, help fill up the restaurant, and eliminate food waste. The best part about this is that 9/10 times the new customers you bring in will have never eaten at your restaurant before. If they enjoy their meal and service, then it’s likely they’ll not only return as a repeat customer, but it’s also likely that they will tell their friends and family about your new restaurant. And this isn’t even the best part; unless those referred friends and family members own a business and are also part of your bartering exchange, they will come in and eat as cash paying customers. Now that’s one heck of a win-win situation!
2) INCREASE MARKET SHARE
Building and increasing market share is hard at the best of times. When you’re in the early stages of your business, the odds are stacked against you even moreso. This is why bartering can be an extremely useful tool in order to gain more of the market share, which is very much tied in with our first point (Attracting New Customers). However, focusing specifically on building your market share is vital for long-term success.
Since everyone in a bartering exchange is hoping to save their cash, they’re highly motivated to prioritize purchases with other members versus non-members (although, family and friends may be an exception). A lot of people will actually be willing to pay a higher price point when they barter, due to their specific Costs Of Goods Sold. This means you may land a job without having to discount your prices, even if your competition has a lower price point. This alone has become a big reason as to why members find a bartering exchange so valuable; they provide you with that competitive advantage over your competition.
3) IMPROVE CASH FLOW
Everybody would love it if they could make more money. But let’s be honest, when you own a business it seems like more money is going out than in. Cash flow is vital to a business’ success, and establishing consistent cash flow can be challenging even in the most favourable circumstances.
However, bartering is an effective approach to improving your cash flow. By using barter, you can purchase certain goods and services for your business (or personal life - but let’s chat about that another day) without having to spend Cash/Canadian Dollars. Instead, you’re able to pay for the goods and services with your Barter Credits. Remember, you’ve earned these Barter Credits from brand new business that have been sent to you by your barter exchange. Therefore, when you’re using your Barter Credits, you’re actually buying goods and services at your incremental cost of goods. Every time you barter, you get to keep your cash and increase your cash flow. Despite where you are in your business life cycle, increasing your cash flow will always be important. But establishing your cash flow during the onset of your business is vital. So partner up with a quality barter exchange, utilize their expertise (which you’re already doing if you’ve gotten this far into the blog) and set up your business for success!
4) UTILIZE EXCESS CAPACITY & IDLE INVENTORY
Due to recent events (for those of you who are reading this at a later date, we wrote this blog during the Corona Virus Pandemic), the majority of businesses are experiencing sales at a slower rate than usual. This means that the majority of businesses have excess capacity or idle inventory that they may find difficult to move. Fortunately, we have a solution. And yes, you’ve guessed correctly; the answer is Barter!
Bartering is an effective tool in a normal business setting. But if you want to get the most value out of your barter exchange, you need to focus on your idle inventory or spare capacity. If you’re currently reading this, you’re probably a newer business who likely has idle inventory or spare capacity. So why let empty seats or an empty service slot go to waste each and every week? If you’re a capacity based business, you likely have a very low incremental cost of goods. For instance, it costs a theatre or venue space absolutely nothing to sell additional tickets to a show/event, as long as the show isn’t sold out. Besides a sold out show, there’s no reason as to why they shouldn’t barter extra tickets, especially because these unused tickets become worthless as soon as the show/event is over and thereby wastes potential value.
You might be thinking, “Barter definitely makes sense for a capacity based business, but what about someone who sells hard goods?. Can I still barter? And more importantly, can I barter effectively?”. Well guess what, our next blog is going to be a must read for you. But I’ll give you the Sparknotes’ version as a teaser.
For someone who owns a hard goods business, focusing on offering your idle inventory to a barter exchange is key. Whether it’s off-season items, an old brand, close to expiry items, overstock, or just plain old slow moving merchandise, they take up much-needed space on your shelves. Of course you’d love to see them go, but it may prove to be harder than you think. Some businesses believe they have to discount these items in order to move them. Well I say screw that! You didn’t work endless hours just to discount your products. This is why we suggest using a barter exchange; you can sell your products for their full value rather than at a discounted rate. That’s right, we actually encourage you to never discount your idle inventory when selling it on barter (Please note that BarterPay Niagara does not support or allow for any price inflation). Joining a barter exchange will provide you with an effective resource that will help you move your idle inventory. You’ll also receive full value for these products, which you can then turn around and utilize down the road.
5) EXPAND YOUR PROFESSIONAL NETWORK
One of the hardest challenges as a new entrepreneur is getting your name out there. This can become especially challenging for people who find it unnatural or uncomfortable to socialize and network. However, expanding your professional network is necessary for growth and optimizing success. There are plenty of different networking events and groups out there, and a lot of them can be overwhelming. However, joining a barter exchange can help ease that anxiety; it’s a more approachable alternative to more confrontational socializing. While a barter exchange’s primary focus isn’t networking, you still get the benefits of joining a business community. For example, BarterPay Niagara has around 400 members (which grows every week) and has multiple events that offer opportunities for growing your network. BarterPay Niagara also prides itself on only offering their membership to quality and respectable businesses. That way you can feel comfort knowing that you are creating a truly “professional” network.
So there you have it. You’ve now familiarized yourself with the five most important ways that bartering can jumpstart your business, brought to you by our self-proclaimed barter experts. I know I just said self-proclaimed, but since we’re part of the largest and fastest growing bartering exchange in the country, we like to think we know what we’re doing… at least a little bit.
Stay tuned for our next blog post where we’ll chat about broker-member relations.
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