Cash Flow: Barter to Contain Expansion Costs
Bill Martin, the president and owner of U.S. Fitness Products, a $1.5-million retailer of fitness equipment in Raleigh, N.C., has relied on barter arrangements to protect corporate cash flow since 1992. "I joined a local chapter of BXI, an international bartering network, for just a few hundred dollars, and since then I consider the pros and cons of bartering before I make any business decision." BXI members earn barter "dollars" by swapping their own goods and services for credit toward the purchase of goods and services from other members.
"We recently relocated to a new 4,000-square-foot showroom," Martin says, "and I was able to pay for all the carpentry, electrical work, new lighting systems, plumbing, and office furniture through barter dollars."
He estimates he was able to save "somewhere between $20,000 and $30,000" in cash. "It really helped not to have to burden cash flow."
Fast-growing companies in the grip of expansion can easily find themselves strapped for cash. Martin has discovered that barter offers a sensible alternative. He admits, though, that like any other spending, barter requires prudence. "Sometimes I have to slow down and limit my barter sales and purchases. After all, I still have to meet payroll and pay our rent, utility, and other bills with cash."* * *
The larger the barter network, the more chances members have to work out valuable trades for their companies. For information on BXI, an international network with 90 branches, call 818-563-4966.* * *