Traders' Forum...June 2017

Written by Byron Lester on .

Should I join a trade exchange if my new business has very little expendable income?

Answer: It largely depends on your business type. If your new business is in the service industry (carpet cleaner, pest control, or tree trimmer, etc.), I would encourage you to join a good trade exchange for a variety of reasons.

First, new customers will call. The cash expense for a business owner to make a service call on barter (if he or she does it himself), is simply the gas expense to get there plus equipment wear and tear. Consequently, very little cash has been expended for valuable barter dollars that can be used for advertising to bring in cash customers, printing, or other necessary business items necessary for success.

However, if your new business is product based (such as computer sales, building materials, etc.), you should be extremely cautious about joining an exchange. Until cash flow can be predicted, it would probably be a good idea to wait at least 8-12 months before joining.

The reason is simple. Any barter sale will take a product out of your inventory that has cost a healthy percentage of cash. If your cash flow is marginal due to a low sales level, you should likely wait until your cash flow increases to allow you more creativity on the buying end. Always remember that bartering should be used as a SUPPLEMENTAL tool to extend your buying power! You must have a certain level of cash flow to benefit wisely!