Is Bartering in Your 2009 Business Strategy?

In my post “Will Sharing The Customers’ Risk Become The New Customer Experience Best Practice?” I replied on February 10th that …

“As it relates to small business owners and the current economy I suspect that the age-old practice of bartering (with the help of the internet) will surface to a level not seen in the past.”

As it turns out a recent article in the Wall Street Journal (February 17th – “Barter Fits the Bill for Strapped Firms”) confirms that some small businesses are turning to barter to help survive the recession. Barter and trade exchanges provide the means to get business done while conserving cash. Since many small businesses are currently squeezed for cash and can’t get loans it’s logical they would turn to a payment system that helps reduce cash flow pain.

According to the WSJ article …

“In 2008 about 250,000 North American companies conducted barter transactions worth more than $16 billion, according to the International Reciprocal Trade Association ... The amount for small businesses climbed to an estimated $11 billion last year from $10 billion in 2007.”

Bartering systems are not a cash flow cure-all and can be quite difficult for companies whose services aren’t widely used. During the difficult recession of the 1970’s the merchants and tradesmen doing business in the small Iowa town where I grew up set up a barter exchange. Of course this was long before the internet making the process back then clumsy at best. But my father owned a small appliance repair business at the time and even though I was just a teenager I can recall several transactions that helped pull the family business through during that critical time. My father still talks about those days, so I guess transactions made under those conditions lead to a memorable customer experience.