An Overview

• Can you use new business?
• Do you have un/underutilized products or services?
• Do you have products and services you need to purchase for your business?
• Are you finding it difficult to compete with the "big boys" with the "deep pockets"?
• Wouldn't you like to have a competitive edge?

Barter is an excellent way to get the new clients you need to grow your business. Barter can help you utilize your products and services more fully. Barter allows you to purchase some of the products and services you need for your business without spending cash. This article will give you an overview of how you can use Barter to grow your business.

WHAT IS BARTER?

Barter, also referred to simply as trade, is the oldest form of commerce or business in the world. Barter is simply the exchange of one product or service for another without the exchange of cash. Described another way ? barter is using what you have to get what you want or need. Virtually all of us have experienced barter, particularly in our youth ? trading baseball cards, doll clothes, etc. Businesses of all kinds and all sizes, from home-based, self-employed companies to multi-billion dollar corporations, are trading more than ever for a wide variety of products and services. Barter is now a multi-billion dollar per year global industry. Herein, we will show you how you can take advantage of the opportunities afforded by barter to grow your business.

HOW DOES IT WORK?

There are a number of ways and types of barter that you can utilize to grow your business. The two types of barter that are the most accessible and easiest to utilize are discussed herein. They are Direct Trade, or one-on-one trading, and trade via a retail Trade or Barter Exchange.

Direct Trade, or one-on-one trading, is where you offer to trade your product or service with a business owner or professional who offers a product or service that you want. An example would be a restaurant owner who offers to trade a certain number of meals to a printer to have their flyers printed.

A Trade or Barter Exchange is a network of business owners and professionals who have agreed to offer their products and services on a trade basis to other clients of the exchange. The exchange markets your products and services to the other exchange clients. Utilizing a Trade/Barter Exchange is usually the most efficient manner to maximize the benefits of barter for your business since you do not have to negotiate and account for each trade yourself.

WHICH PRODUCTS AND SERVICES CAN YOU BARTER?

Anything that can be sold or bought on a cash basis can also be bought or sold through barter. Many people will buy your products or service, or more of it, on a trade basis when they would not do so on a cash basis, due to cash flow, their buying discount with trade, etc.

As we enter 2012, I often wonder what percentage of the people who make New Year’s Resolutions effectively incorporate those goals into their lives. Two common resolutions often made but usually broken in short order are diet and exercise. Why is that? Even though we know that diet and exercise will lead to better health and longer life, the daily grind to maintain these disciplines loses its luster because of the “work” involved. Therefore, we gravitate back to what tastes and feels good, and is convenient, easy, and fun. Thus, another New Year’s Resolution bites the dust.

I then wonder if traders know how easy it is to keep a New Year’s resolution to actually change their buying habits for the better. To be effective traders, business owners only need to commit from 15-30 minutes A MONTH out of their busy schedules. Notice I said 15-30 minutes a month – not daily or weekly! Now, let me show you how easily this commitment can be implemented with the ultimate goal of saving money, building new relationships and increasing cash business.

In January, use the current website to identify 4 to 5 immediate needs for business or personal spending. Simply review the categorical list and highlight your priorities. After this initial 15-20 minute task, call our office for recommendations, and then act on one of those needs. This can easily be done in a 30-minute time period. Since you have already identified your priorities, fulfilling your goals for the following months is easy. Simply make a commitment each month to contact our office on one need so that we can help you save money in one area of your personal or business life.

Sure, you may be excited enough with the results to give more time to trading for multiple needs each month, but making the commitment to do at least one should be your goal. By the end of 2012, you will have hopefully developed at least 12 new avenues in which to save that you were not previously using, built some new relationships, and likely received some cash referrals from your trade contacts.

There is very little downside to that 30-minute per month commitment, and it’s easy, fun and mostly convenient to boot!! Now that’s a New Years Resolution worth keeping!!

Could you please explain how the income tax situation works?

Each year MerchanTrade, as a third party record keeper, is required by law to report to the IRS any trade sales you have made between January 1 and December 31 of the previous year. Consequently, we will be sending out 1099-B forms around January 15 to report these totals. In addition to this information, we also include the name under which you file with the IRS – whether it is your corporate or business name as well as the corresponding EIN (employer identification 9 digit number) or your personal name DBA (doing business as) the business name you listed with us and the corresponding social security number.

The IRS taxes income from barter sales the same as cash sales. However, you have the option of writing off many barter purchases for business just like cash expenses, so feel free to take advantage of that option with a good CPA to advise you. We can even recommend some on trade should you need one.

If you have any more questions regarding the tax implications of your MerchanTrade participation, we encourage your calls or emails to our office. We will be happy to assist you in preparing for the upcoming tax season.