If you’re hungry for new ways to generate coffee business—and these days, who isn’t?—consider the oldest form of business itself: barter. Barter can help you attract new customers, maximize underutilized resources, and even reduce your cash expenses.
Although bartering, or trading, dates back to mankind’s earliest days, it’s very much alive and well in the 21st Century. About 20%-25% of the world’s trade is conducted through barter, according to the U.S. Department of Commerce, and it’s on the rise.
Better yet, barter works particularly well in the coffee and beverage industry, because it’s an effective way to utilize the “disappearing assets” that are our stock in trade.
“If you don’t sell perishables like bakery items while they’re fresh, or fill an empty table any given morning, you lose that opportunity to earn income,” says small business expert Ray Silverstein, author of The Small Business Survival Guide: How to Survive and Thrive During Tough Times.
“Once that moment is gone, you can’t get it back. Bartering eliminates waste, and that translates to greater profits.”
The Basics of Modern Barter
Back in the old days, bartering meant swapping, or equal trade: I’ll give you this if you’ll give me that. These days, most business owners don’t have the luxury of forging one-on-one deals. And thanks to professional barter exchanges like IMS, they don’t have to.
There are about 500 barter exchanges in the U.S. Many are local or regional; a few are national and even international. Either way, the barter exchange’s job is to promote its members’ goods and services to one another, while keeping track of everyone’s account activity. Members typically pay a one-time joining fee, plus modest transaction fees. Transactions are conducted using barter dollars or trade credits.
You’re In Control
One of the benefits of barter is that you can determine exactly what and how much you are willing to trade. For example, a restaurant can arrange to barter up to a certain dollar amount per month. It can also barter up to a fixed dollar amount per order, or stipulate a 50/50 cash/trade dollar arrangement.
According to IMS president, John Strabley, “No matter how you structure your arrangement, this allows you to anticipate a fixed amount of barter business each month. Although, now especially, many coffee businesses are happy to earn as many trade dollars as possible.”
What Can You Buy through Barter?
You might be amazed to learn what you can obtain through barter, especially if you join one of the big exchanges. You can purchase business supplies, personal services, accountants, dental…the sky’s the limit.
The Sky’s The Limit
How much additional business can you expect to generate through barter? It’s up to you. Active barterers often attribute 5 to 10 percent of their income to barter (which, by the way, is treated as cash in the eyes of the IRS). According to the Department of Commerce, bartering is now a $20 billion industry. It’s estimated that 65% of NYSE companies use barter, as do about one-third of all small businesses. Why not you?
How you implement barter in your business is your call. So is how you would put those additional barter dollars to use. But one thing’s for certain: if you’re looking for new ways to generate business activity, it’s worth your while to investigate what barter can do for you.
John Strabley is president of IMS, one of the country’s leading barter organizations. www.imsbarter.com– 800-559-8515.