Barter Your Way Out of a Business Financial Crisis

Can you barter your way out of a financial crisis? Yes, you can. Due to the unpredictability of the economy today, many small and large companies are closing their doors. Unfortunately, during these times only the savviest business owners will survive certain financial crisis. These are the owners that know how to think out of the traditional box to solve both small and large financial crisis. This is also the group that knows how to read through their balance sheets to see what they have to offer instead of what they need. In fact, the balance sheet is one of the keys to pulling the business from under the water to the top of the sea.

Reviewing the Company's Balance Sheet

The balance sheet tells the business owner how much the company's worth in assets and how much debt they owe. When the company owes more money to their creditors than they have in assets, the company can quickly get into a financial crisis. For the savvy business owner, however, this is a time when they can take advantage of bartering, which is a non-traditional method for getting out of debt.

Bartering and Company Assets

Bartering will allow the business owner to offer the assets that they have to other companies that need them. The other companies can pay for these tangible assets in cash or in other things like equipment. If they pay in cash, the money can be placed back into the business. This cash can also be used to expand the operations. Some of the assets that the business owner uses can include inventory, equipment and land.

Inventory

Some companies build up excess inventory and it can sit idle in large warehouses. To help with getting the company out of a financial crisis, this inventory can also be used to barter. If another company can benefit from a discounted price, the cash received can be used for operating expenses during difficult times. This money can pay for the cost of utilities, employee salaries and other miscellaneous expenses.

Equipment

When the owner has mastered this method well, they can often profit from these transactions. For example, if the equipment is listed on the balance sheet for $100,000, they can profit by selling the equipment for $150,000. Which means, they can earn $50,000 and it can be placed back into the business. The trick however, is to barter with equipment that the company will not need in order to operate the business, especially in the near future.

Land

For business owners that need the money to keep the business open, land is not excluded. Land and other real estate propery is also included in many bartering deals. Based on information from the International Reciprocal Trade Association, prior to the mid 2000's, approximately 8.25 billion was exchanged.

Marketing

You may not know, but in the ast 20 years almost 70% of outdoor marketing was done by bartering. A lot of companies offer theri products in return for some sort of outdoor marketing. Take marqueesfor example, it is easy to print out the name of the company or a product and barter them for the same product . Especially if you are a tourst agency and the summer is getting near. It is all the same with newspaper ads, TV ads etc.

Although bartering started back in mid 1800's, it is still being used today. Bartering has saved many small and large businesses from folding and closing their doors during recessions and struggling economic times.