You can trade what you have for what you want. You can start your own local small barter exchange. You can start an exchange for your community or Chamber of Commerce. You can serve your community and start a Time Dollar exchange. Or, you can start an online barter exchange and provide trading services to business members locally, across the nation or throughout the world.

The possibilities are limitless… It just requires some creative thinking and a paradigm shift to using alternative currency instead of cash.

Following is an excerpt of the DoBarter online Exchange Membership Agreement that can be found at: http://dobarter.com/Membership_Agreement.asp?

Member Exchange agrees not to use another on-line software provider relating to DarnFast Software Inc. (DoBarter/IBA) while using DarnFast Software Inc. (DoBarter/IBA) software and for a period one (1) day less than one (1) year after termination of use of DarnFast Software Inc. (DoBarter/IBA) software. Member Exchange agrees that violation of this creates a financial obligation of $100,000.00 USD from Member Exchange to DarnFast Software Inc. (DoBarter/IBA).

Member Exchange agrees that giving software providers or developers access to DarnFast Software Inc. (DoBarter/IBA) system software Site Manager creates a financial obligation of $100,000.00 USD from Member Exchange to DarnFast Software Inc. (DoBarter/IBA).

Member Exchange agrees use of DarnFast Software Inc. (DoBarter/IBA) system software gives Member Exchange valuable information into the software requirements of DarnFast Software Inc. (DoBarter/IBA) system software. Member Exchange agrees not create, participate in the creation of software relating to DarnFast Software Inc. (DoBarter/IBA) while using DarnFast Software Inc. (DoBarter/IBA) software and for a period one (1) day less than one (1) year after termination of use of DarnFast Software Inc. (DoBarter/IBA) software. Member Exchange agrees that violation of this creates a financial obligation of $100,000.00 USD from Member Exchange to DarnFast Software Inc. (DoBarter/IBA).

Because barter exchange members can earn Trade Dollars without significantly affecting cash flow, investors can buy speculative properties and wait for values to go up. In some cases, it’s even possible to walk away with a pocket full of cash.

Even if the investor is forced to sell at a paper loss, the sale can still represent a cash profit. Here’s how it works. Let’s say a business has an incremental cost of 35 percent in its Trade Dollars.

The business owner buys a piece of property for $100,000 trade, so the cash cost in the property is $35,000. If he sells it for $70,000 cash, he has still doubled his cash investment while reporting a $30,000 loss on his taxes. The IRS doesn’t care whether you pay for the property in cash or Trade Dollars. The reportable loss is still the same.

Investing Trade Dollars in improvements to a hard asset like real estate is another way to generate cash profits on Trade Dollars, since the investment enhances the cash value of the property. For example, a doctor has paid for replastering and painting of a house, had a new sidewalk put in, has renovated a garage, and made other improvements using Trade Dollars. Since the doctor’s cost of a Trade Dollar is only his time, the actual cost of the improvements is negligible.

Even when a contractor isn’t a member of a barter exchange, members are still able to finance improvements with trade. Vacations, vehicles and building materials can be bought with Trade Dollars, which can then be traded to contractors.

Where electricians, remodelers, plumbers or other contractors are barter exchange members, owners can easily upgrade the cash value their property. If the real estate is income producing property like rentals, the improvements can generate immediate cash through rent increases.

For example, one of our clients is a magazine. One of its major expenses is color separations. We found another business that does separations and signed them up specifically for the magazine client.

The pre-press company does the separations and film on trade, and the magazine charges cash to its advertisers. With the help of a creative broker, the magazine now turns its Trade Dollars directly into cash.

The separations were an established part of the magazine’s fixed cost, so it was fairly simple to recognize the barter opportunity. Creative traders can also develop new product lines or new ways of doing business that turn Trade Dollars into cash dollars.

For example, a parking garage teamed up with an oil change and auto detailing company. Parking customers find it convenient to drop their cars off and not waste time on minor maintenance. The parking garage pays for the work in trade, then charges cash to its customers.

With the help of creative trading, the garage owner found a way to offer a new service and generate a new source of cash flow funded completely on barter.

There are numerous examples of how businesses can turn trade dollars earned from new sales to new customers into cash sales to customers that aren’t members of the barter exchange. A lawn maintenance company can use trade dollars to purchase plant material and sod on trade. An auto repair company can use trade dollars to buy auto parts on trade that can be sold for cash.

With just a little creative thinking, the possibilities of using barter to expand a business and improve the bottom line are endless.

The mortgage, insurance and utilities on a hotel are fixed, whether the hotel is fully occupied or nearly empty. The incremental cost of filling an unused room is minimal. To pay for the extra house cleaning, laundry, and complimentary items such as soaps and shampoos, it costs about $20 per room night.

But just think about how much cash revenue that twenty dollars can generate. The people staying in that room order room service, buy sodas from the machine, magazines and gifts from the gift shop and eat in the restaurant. It’s even more lucrative if it is a resort. When a destination resort offers sports, tours and entertainment, visitors spend a lot of money on peripherals.

The hotel has generated cash it would not have had while producing full value for the room in Trade Dollars. In addition to the new cash flow, the hotel can use the Trade Dollars it earned from selling excess unsold inventory to offset cash expenses.

There are many other types of companies that can also generate new cash sales from participating in a barter exchange. These include, auto repair facilities that also sell vehicles, computer repair companies that sell computers and HVAC service companies that sell equipment. The companies can offer their repair and maintenance services on trade and also market vehicles, computers and equipment to these new customers to generate new cash sales.

Filling downtime with customers that might not normally spend cash on your service.  Or selling stock at regular retail for barter instead of marking it down for a sale for cash.

Conserve cash by buying things you need (or want) with barter dollars instead of cash.  Use the cash to reinvest in your business.  You can also give employees bonuses in barter dollars.  That can start a new incentive program or even give you the ability to give some sort of bonus in a year that might not have seen any bonus otherwise.

Improve your lifestyle.  Often when a business is new or in a down time, owners cut back on personal indulgences to put money into the company.  Barter dollars can be used to dine out, for vacations, for gift giving, anything that would be considered an indulgence if you paid cash.

A: Attorneys and doctors may have an ethical issue about paying referral fees, as it has the potential to be looked at as a conflict of interest. In addition, for attorneys there could also be issues with their Bar Association. I have heard this question many times from many attorneys that have a concern about referral fees and being in violation of the Bar.

Factually, barter exchanges do not charge or collect referral fees. A barter exchange is a business network with a payment platform much like the credit card industry. Members of a barter exchange business network pay a cash transaction fee each time they make a sale and earn barter dollars in the exchange that are deposited to their barter account. They provided a service to a member, they were paid in barter dollars, and the exchange charged a transaction fee, which is no different than if they were paid by Visa, Master Card or American Express, which charges a 2.2% to 3.8% fee + transaction and monthly fees for processing their charge.

The added benefit of being a member of a barter exchange, as compared to just accepting credit cards, is that the exchange also provides marketing, networking and advertising to a member at no additional charge, so that members end up getting new business from new customers that they ordinarily would never have had.

Members also pay a transaction fee when they spend their trade dollars, which is paid to an exchange for the service the exchange provides to help business reduce their cash requirements for purchasing, so they can pay for the products or services they need at the cost of their own products or services.

Never Ignore Customers’ Calls
by Dr. Jerry Osteryoung

If a customer calls to inquire about a product that you are servicing for them, and you do not have the information, you must tell the customer that you will find the information for them and when you will be getting back to them. Not calling them until you have the information — which might take several days or longer — is terrible customer service insurance news.

So many times, salesmen and service technicians think that it is okay to delay returning the customer’s call until they have some information to pass on. However, this is an awful policy because the customer does not know that you are looking for the answer. How would they know that you have not just forgotten about them or neglected to relay a message?

We had a kitchen stove go out on us, and cooking without a stove is tough. The local dealer did not carry the part that was needed for the repair, and it had to be ordered. When the dealer discovered the part was on backorder, they said they would get back with me and update me on the status of the order when they heard something.

I did not hear from them the next day, so I called the dealer’s service department and was told in a very negative tone, “We said we would call you when we hear when your part will be in!” I explained how important it was for me to have a rough idea of when the part would arrive, but was told that they would call when they knew.

I continued to call each day. It was not that I wanted to harass the dealer, but I just wanted to know when we would no longer have to think about going out for dinner. Was I trying to get the part sooner? No, not really. I just wanted to know when our lives would return to normal.

What should the dealer have done differently? All they had to do was call me each day and update me on the progress. It would have even been okay to call and tell me that they did not know anything new. Then, at the very least, I would have known that I had not been lost or forgotten.

A standard script would be helpful in cases like these. A technician could say something like, “I apologize, but we still have not heard from our supplier. If we do not hear from them by tomorrow, we will call them back.”

This all goes back to great communications. Each and every business must ensure that its communications with its customers are done in such a way that each one feels good about the interaction. Look at it this way, not communicating with a customer is still communicating, but the message being sent is all negative.

Now go out and make sure that you have a system in place to ensure customers receive periodic reports about the status of their orders or repairs.

As this also pertains to your barter exchange business, keep your members informed with a “touch system” and always let them know that you are working on bringing in new members that should be able to provide what they need.

Jerry Osteryoung is the Director of Outreach of the Jim Moran Institute for Global Entrepreneurship in the College of Business at Florida State University, the Jim Moran Professor of Entrepreneurship; and Professor of Finance. He was the founding Executive Director of the Jim Moran Institute and served in that position from 1995 through 2008. He can be reached by e-mail at jerry.osteryoung@gmail.com or by phone at 850-644-3372.