I think of marketing as being all about finding the right strategies and tools to help your company grow.
That means everything from finding competitive advantages to implementing multiple lead-generating programs to using a variety of ways, from traditional advertising to social media, to spread the word about what you have to offer.
ou also have to have in place strategies to keep costs in line – and find ways to get products or services your company needs to grow that you would normally pay for with cash, but which you might not be able to afford.
That’s where one of the oldest and most underutilized tools in the entrepreneur’s tool belt comes in. It’s called business barter.
It’s not rocket science and it’s not new, but for many small and cash-strapped businesses, it can be a very effective part of the arsenal for growth.
Running a small business, I like to keep my cash close and have to be careful about how I spend my money. I don’t want to spend on things I know I can barter for when I want something from someone, and I can give them something — my marketing services — in return.
Think I’m kidding? I’ve used barter for the last eight years to acquire everything from marketing materials to office furniture to a company car. Right now, I have three barter deals going for a complete website redesign; for a company rebranding (logos, business cards, etc.); and…for suits and ties.
Bartering can help your company look and act the part.
A former client really wanted to give off the image of being an artsy and forward-looking organization. Its furnishings didn’t go with the image.
So it bartered its marketing services with a furniture retailer — and when clients saw the new, higher-end and more artsy furnishings, they commented on how much they matched the company’s branding.
Companies have not only saved money using business barter but have also created revenue streams out of these transactions.
Take, for example, a small radio station in Florida.
It was having a tough time making revenue to keep its doors open, so the owner decided to trade his product – advertising – for other products and services.
His first barter transaction was to swap advertising time on his radio station for about 1,000 electric can openers.
Most might look at this and see no opportunity, but the owner saw plenty and decided to try to sell the can openers over the air.
After a very short time, he sold them all, and made enough money to keep the station open.
But he didn’t stop there. He decided to continue trading products and services for advertising time. Continuing on this path, he turned that once-struggling station into a company that now generates about $1-billion a year in sales.
That company, by the way, is now called the Home Shopping Network.
There are two types of barter that a small business can explore: a one-to-one trade or triangulation.
One-to-one trades are the simplest form of barter. You simply go to the most suitable business and propose a trade of your product or service for one of theirs.
One-to-one trades can also allow small businesses to enjoy significant cash savings, because they can trade something at retail for something of equal value in the marketplace.
For example, you might trade something you have to offer for $10,000 of equal retail value that might have only cost you $1,000 to develop. You end up saving yourself $9,000.
The other form of barter is called triangulation. That’s when you involve three or more transactions in a barter deal.
This form of barter comes in handy when the straight one-to-one transaction doesn’t work out because your initial partner is not interested in your product or service.
In that case, you can find another partner with something your initial partner may want. Get control of that product or service and then go back to the initial partner and complete the trade.
For example, let’s say you’re a creative agency and need new furniture for your office. You already tried trading your creative services with a furniture store but it wasn’t interested. So you ask what it would like. The answer: New carpets.
Knowing this, you go off to find a business that deals in carpets and propose a trade of $10,000 worth of carpet for $10,000 of creative services.
If they agree to the trade, you now control $10,000 worth of carpeting and can go back to the furniture store and trade it for $10,000 worth of furniture that you need for your own business.
If you’re going to try bartering, start with someone with whom you have a level of rapport. Maybe you know Web designers, graphic designers, printers or advertisers who might benefit from your products and services. If not, try out your first triangulation deal.
Be flexible and make sure you come up with a win-win proposition. If someone else charges more hourly for their work than you do, you may have to offer more hours of your time for less of theirs.
Think about the things that are missing in your business that you can’t afford to pay cash for but that would help your company grow better or stronger. Focus on going after barter deals for them.
Whatever you decide to do, start small. It will allow you a chance to refine your pitch, get comfortable with the process and become a seasoned specialist in business barter.