This month we're thrilled to bring you this guest blog from Sam Pearce (left) founder of Mum’s The Boss, an award-winning support network for mums in business.
If you are in business your aim should be to sell your product or service and to make money. But there are times in the lifecycle of a business when bartering can be of enormous help.
The concept of money as a unit of purchasing power is something which has evolved over the years and is now accepted as the norm. However bartering still goes on in communities where cash is not available, such as prisons (where cigarettes form the basic unit of currency) or the school playground (where children regularly swap or trade the contents of their lunch box). Early civilizations relied on the exchange of goods and services to survive.
As a small business owner, cash flow can make or break a business. Bartering comes into its own whenever cash flow is tight, particularly when trying to get a new business off the ground and later when a business is going through a process of rapid growth. The importance of a support network
Top of your to-do list, as a business owner, should be to build a support network. This can include family, friends, social networking sites, business forums, a business coach or mentor, mums in the school playground, face to face networking – it all counts. People often view ‘networking’ as a means of attracting clients and generating sales. But your support network can be just as crucial when it comes to sourcing suppliers, partners and other business owners to collaborate with.
Here are just a few examples of ways you can utilise your support network when cash is tight:
- How a new business can benefit:
1. Setting up a professional infrastructure. When you are a new business you want to hit the ground running – this might mean having a website, business cards, promotional materials, a logo, etc. The problem is, you probably don’t have the cash available to pay for all of this upfront, and you don’t quite have the skills to do it yourself. So now is a good time to barter some of your product or time to get a really professional image right from the start.
2. Building up a portfolio. When you are a new service provider you have the chicken and egg problem of needing clients but having no evidence to support what you do, save perhaps some qualifications. This may be the time to barter some of your product or time in return for testimonials, a design portfolio or ‘Clients’ listing.
3. Getting yourself seen. Advertising is a costly business, which is why business owners invest so much of their precious time networking. However, sometimes you just need to get your business in front of people. Can you barter some time or product to get some promotional material produced or for free advertising or advertorial content?
- How a growing business can benefit:
1. Upgrading your infrastructure. If your business is growing quickly you may find yourself outgrowing your website, your premises or your brand. In order to capitalise on your success and your momentum it is often necessary to make large upward strides before you can afford to pay for them. Now may be the time to barter for a new website with added functionality or some help fine-tuning and developing your brand.
2. Getting the support you need. Or it may be a case that you lack the confidence or knowledge to take your business to its full potential. This may be the time to barter for some coaching. Sometimes a small amount of fresh input at the right time can make all the difference.
3. Outsourcing, freeing you up to do what you do best. You’re in a time/money trap where you can’t yet afford to outsource, but you need more time to grow your business. If you can barter with a couple of suppliers to outsource your admin, book-keeping, PR, etc, it can free you up to get on with the important business of making more money so you can then start to pay these suppliers.
- How to barter successfully
Our business would never have got off the starting blocks without bartering. We have bartered yearly memberships in return for a new website from a fledgling web designer and free advertising in magazines; offered free advertising on our website in return for sponsorship, discounted venue rates and a virtual tenancy with a business incubation unit; and received free business books in return for reviews; the list goes on. Successful bartering depends largely on the quality of the relationships you build. To barter effectively for your business you should:
· Build genuine, strong relationships with people before you need their help
· Be generous – if you’ve helped someone out they are much more likely to help you in return at a later date
· Be honest about what you need and what you are prepared to offer in return
· Highlight the benefits to both parties
· Always keep your side of the bargain
· Don’t be afraid to ask – but give people the option to say no and still remain friends!
Whether your business provides a product or a service, remember you always have your own personal unit of currency available at your disposal. As long as both parties are happy with the deal, the ‘monetary’ value of the exchange is irrelevant. And don’t underestimate what you have to offer – just because it’s not ‘hard cash’ doesn’t mean it’s not exactly what someone else is looking for.
Mum’s The Boss provides online business resources on its blog and runs face-to-face child-friendly networking groups across 6 counties.
Thanks for some great advice Sam.
