The future of bartering !

Bartering has been around for centuries in some form or other with both individuals and businesses swapping items and services. But, what does the future hold for bartering especially for small and medium sized businesses (SMB)?

Well, in 2011 services and goods to the value of $12 billion were exchanged without any cash passing between the businesses involved. It is believed that more than 400,000 businesses around the world decided that they had something to swap and conducted business in this way. Whilst no figures are yet available for 2012, it is estimated that the volume of swapping was forecast to increase by anything between 5% and 10%.

It is the word “cash” that has been referred to above that is of particular relevance. This is because, in the current global economy with some countries going into and out of recession, it is the ability to raise cash to buy goods and services that is a problem for many small and medium size businesses. The problem is especially prevalent with new business start-ups.

Yes, when a new business sets out on its journey to eventually become a multi-national cash rich corporate entity there are so many things that can get in the way, not least of which is cash flow. It is difficult enough for a new business to win customers but it can be even harder to get those customers to pay their invoice on time. It becomes a vicious circle- if you can’t get your debtor monies in how can you take on more work if you have no funds available to pay for stock etc.

Herein lies one of the major benefits of bartering because no cash ever changes hands when your business swaps something. This means that any cash that the new business had intended to set aside to buy such things as office furniture, computer, photocopier, machinery and advertising to name but a few can be used to take on further work that you are paid in cash for.

Another benefit to your business of bartering is that it opens the door to more new customers that you may not have come across in the normal way of trading.  Some of these customers may wish to exchange goods by way of swapping but some will undoubtedly wish to conduct business in cash thus enabling you to further increase your bank balance.

Another consideration is that a new business would often require an overdraft facility to assist with cash flow on which interest and arrangement fees are required. By bartering goods and services, this may result in a reduced borrowing requirement thus containing the expenses of the business.

So, the future of bartering does look healthy and, especially with world economies in the state they are in, it is almost certainly going to continue to expand for the foreseeable future. As an ever-increasing number of businesses join the bartering community this will create further opportunities.

Globally, there are over 500,000 business trade exchange members. Thirty three per cent of small businesses in the United States of America enjoy the benefits of bartering.  Are you going to be the next new business that starts to dabble in swapping goods or services?