Using Barter in Your Startup
If you’ve recently started a new business or are thinking about starting one, then you might be aware of the cash flow challenges that await you. However, consider a strategy that both startups and established businesses have used since commerce began that can help you preserve precious cash while still obtaining the goods and services you need to run your business: barter.
Barter is the exchange of goods or services between businesses or individuals. It can be especially beneficial for small and startup companies, because it allows each party to get what it needs by providing a product or service to the other party instead of laying out cash.
For example, consider a small Web site development firm with five employees. It wants to grow by gaining market share, but it can’t afford to pay for professional advertising or marketing services. If it could find an ad agency in need of Web site development, the firms could trade services with each other, each obtaining a valuable service it needs without having to spend money to get it.
Bartering can work just as well for manufacturers and retailers that have excess or outdated inventory that won’t move, which they can exchange with other businesses for needed goods or services. This allows companies to get some value out of inventory that they may otherwise have to mark down substantially or simply write off as a loss.
One of the best ways to engage in barter is to join a large barter exchange group with an excess of 1000 members. VCA is one of the few exchanges that can offer you this and the only one in Arizona. Here is the main premise behind what we do:
Companies sell their goods or services to other businesses in the network and receive trade credits (or barter “dollars”) in exchange, which they can use to buy goods and services from other member businesses.
VCA offers full business consulting to start ups that will explore all avenues of cash expenditures that may be needed during the first year. We develop a plan with you that may include a line of credit to help get you started without the out of pocket cash expense.