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    Posted August 22, 2014 by
    jdesmarais
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    Phoenix, Arizona

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    Why Rolex, Mercedes, PepsiCo and Small Businesses Are Using Barter to Grow Without Cash

     
    When launching, sustaining or expanding a business in today’s tough economy, capital is the name of the game. You’ve got to be smart with every dollar you spend.

    Legal and accounting services, company websites and social media marketing, software, bookkeeping, and office supplies – all are essential to a start-up or expanding small business, and all cost money… or do they?

    What if you didn’t have to eat up valuable cash or credit for any of these items? “You don’t,” says Ana Hawk, founder and CEO of one the fastest growing barter organizations in the world, InstantBarter.com. “Everything you need, want or desire for business can be bartered. Barter is the oldest method of exchange in the world. Before money food, tea, weapons, spices and even human skulls formed the basis for everyday trades.”

    “Barter is not just for small businesses. Mercedes Benz negotiated a barter deal of their buses for bananas in a deal worth $65m. And PepsiCo had a longtime Russian barter arrangement where it traded cola for Stolichnaya vodka. Donald Trump has used it. Staples trades excess furniture they can’t. Hertz barters use of their vehicles with Rolex as an employee retention strategy. After 10 years of service Hertz employees have been rewarded with a Rolex. Hertz gets those watches without cash in exchange for Rolex’ use of their fleet.” continues Hawk.

    In the 1960’s many Americans started joining barter groups that acted like banks. The groups extended barter credit to their participants, for everything from goods and services, to saddles and horses. The provider’s account would be credited, and the buyer’s account would be debited.

    The same bartering system is flourishing today, except it’s doing so online through more than a thousand companies that function much the way their predecessors did. “It’s all just currency,” Ms. Hawk explains. “Currency is anything you and I agree has value and that we voluntarily trade.”

    Dr. Denise Brimmer CEO of ACD Christian Business Design, an Instant Barter member, had a great idea for a start-up but didn’t have the cash to get launched the way she wanted. “One call to Ana,” she says, “and everything changed. Before you knew it, I traded into the system services offered by our new company, in exchange for a new website, social media marketing, and accounting services traded in by three other companies that didn’t need our services but wanted the barter credit for other things. Now we’re thriving, using a combination of cash, credit and barter!”

    Here’s how barter works: The first thing you do is make a list of what you need, want or desire -- a new computer for your business, a flat screen for your den, a new paint job for your house. List in hand, you go online and join a barter company for a small, one-time fee and tell your assigned trader what you want. He or she goes to work for you, either locating what you need from existing barter inventory, or recruiting new members who trade what you want and into the system, as they prepare a list of their own. Rinse and repeat.

    As with everything, of course, there are advantages, disadvantages, and cautions to keep in mind. Some barter companies charge more than others – industry standard fees range from 5% to 15%. Instant Barter, however, takes a different approach at just 2.5% per transaction.

    In a tough economy, small businesses are smart to go with something as simple, tried and true as barter.
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