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Recently we were looking for an internet marketing consultant to assist us with some new marketing initiatives that we had planned for our 13-year old business plan consulting firm, BizPlanIt.
We spoke to a handful of firms that seemed like they could do the job for us and received quotes in the range of $6,000 – $10,000 for the deliverables that we required. The quotes seemed pretty much in line with our expectations, so we all we had to do was decide how we wanted to pay for the work.
We could write a check out of our business bank account which means we were funding the project out of internally generated funds. We could borrow from our line of credit at the bank or even use a credit card which means that we would have financed the work from externally generated funds.
So, while we were making our funding decision, one of the two firms that we liked the best called and asked if we would be willing to trade his work for a business plan. We asked a few questions about the business and the purpose of the plan and then agreed to the proposed trade.
What we agreed to is called a barter transaction. Our purpose in writing this blog posting is not to explain the ins and outs of barter. You can find all you ever wanted to know about barter simply by doing a search on Google or by visiting the International Reciprocal Trade Association (http://www.irta.com/).
What occurred to us is that barter is nothing more than another form of finance. Barter is a financing alternative just like a line of credit, accounts receivable financing or leasing. When it is appropriate, it is perfect. It is appropriate when you have something that someone else wants or needs and they have something that you need.
IRTA says on its website that from 2001 to 2008 the annual value of barter trade increased 25% from just under $8 billion to $12 billion.
So, the next time you are trying to figure out how to pay for the new truck or the internet marketing consultant, don’t overlook the opportunity to barter.
Happy Bartering!
Have you used barter as a form of financing in your business? Comment and share your thoughts here on our blog or join the discussion on our Facebook Fan Page.
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