K
KeepFraming
Guest
Wondering if anyone else works with a barter association to bring in new business, or to keep shop busy when things get slow...?
Is that one of those deals where they want to trade at your cost or less for their inflated retail?
artist
CGF II, Certified Grumble Framer Level 2
I trade for dental work and food at a dentist dopwn the wat from me and a restuarant across the hall. We trade for foll retail for full retail and the frame police don't see it or care and everybody is happy. We keep a running tab on the computer and it is no big deal, as it does not occur that often. We are all friends and nobody is trying to screw anybody.
Have a handfull of local businesses that I deal with in much the same way as artist mentioned above. Very informal, hand shake type stuff. Haven't paid for lunch in about a year.
We belong to two barter groups with national connections, and have been bartering through them and privately for over ten years.
We've learned a few things about barter:
1. Barter transactions are taxed and reported just as all other transactions are. The IRS and states have special forms for reporting barter transactions. The notion that bartering may be a way to escape taxes is balderdash. Bartering is completely legal and a "clean" way to do business, when it is done right.
2. For our business, barter is a good deal because it brings us business we would not otherwise have. Barter customers even come from out of town for our products and services. If barter would only allow existing customers to buy on trade, it would be of no benefit to us.
3. Some barter members -- especially service contractors such as electricians, painters, and others who do not work from a prepared price list -- jack up barter prices. This has always been a sore spot with us, and I refuse to deal with those companies on any basis. When we want to barter on such things, we always get a couple of "cash" bids for the same work for comparison.
4. Framers may find it difficult to spend all their barter dollars for business purposes. Most of our barter income is taken as personal income -- and taxed accordingly. There are many more ways to spend barter dollars for personal purposes.
5. Don't offer discounts for barter transactions. Soem barter customers will ask for "wholesale" pricing, but when they sell it's at retail. Barter transactions are expected to be strictly retail, whether buying or selling.
I occasionally get discouraged by attempts to inflate prices for my barter buys, and consider quitting. Then we get some big barter job and find a good way to spend. For example, we recently had our shop painted on trade, saving about $500. of our cash. Now if I could just find some good carpet on trade...
The bottom line: If bartering would bring in business you would not otherwise have, and if you can find ways to wisely spend the barter dollars you take in, then you might like it. A lot of small business people do.
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Jim Miller, CPFcm; GAFP Committee Member
We've learned a few things about barter:
1. Barter transactions are taxed and reported just as all other transactions are. The IRS and states have special forms for reporting barter transactions. The notion that bartering may be a way to escape taxes is balderdash. Bartering is completely legal and a "clean" way to do business, when it is done right.
2. For our business, barter is a good deal because it brings us business we would not otherwise have. Barter customers even come from out of town for our products and services. If barter would only allow existing customers to buy on trade, it would be of no benefit to us.
3. Some barter members -- especially service contractors such as electricians, painters, and others who do not work from a prepared price list -- jack up barter prices. This has always been a sore spot with us, and I refuse to deal with those companies on any basis. When we want to barter on such things, we always get a couple of "cash" bids for the same work for comparison.
4. Framers may find it difficult to spend all their barter dollars for business purposes. Most of our barter income is taken as personal income -- and taxed accordingly. There are many more ways to spend barter dollars for personal purposes.
5. Don't offer discounts for barter transactions. Soem barter customers will ask for "wholesale" pricing, but when they sell it's at retail. Barter transactions are expected to be strictly retail, whether buying or selling.
I occasionally get discouraged by attempts to inflate prices for my barter buys, and consider quitting. Then we get some big barter job and find a good way to spend. For example, we recently had our shop painted on trade, saving about $500. of our cash. Now if I could just find some good carpet on trade...
The bottom line: If bartering would bring in business you would not otherwise have, and if you can find ways to wisely spend the barter dollars you take in, then you might like it. A lot of small business people do.
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Jim Miller, CPFcm; GAFP Committee Member
S
sherry gray
Guest
I've bartered to have my lawn mowed all summer and the leaves cleared!
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K
KeepFraming
Guest
I agree that it can be difficult to find ways to spend barter for business purposes. I read an interesting article, on the Montley Fool, and they mentioned that there are two ways of doing business...one is to replace time with money - for instance if you are a huge company with lots of money to spend you can afford to make it worth employees while to stay late, work weekends,vactions, when they are sick etc. Then you have the other kind of business - which does not have a lot of money, this take slower to build up momentium. You must give employees benefits that they can not get from those bigger money companies, such as understanding, more time off when needed, and someone actually knowing there name.
I find this relates to barter, because sometimes the money is not always there...but there are other outlets to get needed resources/benefits.
I find this relates to barter, because sometimes the money is not always there...but there are other outlets to get needed resources/benefits.
I have a barter deal going with my dentist, so far it's working out ok. I try to stay away from barter deals though.
Jim is right, there are no tax advantages to doing it, so why bother. Isn't it the reason they invented currency, so we don't have to schlep chickens and goats about. We should take advantage of all our modern conveniences and trade for dollars, it's more convenient, less bookkeeping, and it doesn't smell as bad.
John
Jim is right, there are no tax advantages to doing it, so why bother. Isn't it the reason they invented currency, so we don't have to schlep chickens and goats about. We should take advantage of all our modern conveniences and trade for dollars, it's more convenient, less bookkeeping, and it doesn't smell as bad.
John
gemsmom
SGF, Supreme Grumble Framer
- Joined
- Oct 10, 2000
- Posts
- 3,576
If want something, I would prefer to buy it from whomever I wish, rather than the one I feel obligated to. My thinking is, and to some it may be flawed, that I will get better service and product if I am actually giving money to someone. Who's framing would you do first? The one you are going to get cash for, or the one who's service or product you might use "someday"? That might be the other guys rationale when you need to get your pool opened or your mufffler fixed.
Greg Gomon
CGF II, Certified Grumble Framer Level 2
I signed up with a professional barter group the first year I was in business. I thought I needed the exposure. Biggest mistake of my life and almost ruined me. The cheapest bunch of people I have ever been in contact, no loyalty to a business or person. Hard lesson to learn but I will Never again barter thru a group. I do some barter now but very selective about who and under what circumstances. One criteria, they better be the best in their field because we consider our finished product the best in the business.
K
KeepFraming
Guest
As Barter expandes and improves in the United States, more people may find it advatages. Two main problems I tend to hear about bartering is that: 1. You have only a limted number of business who you can use your trade dollars with 2. Some unscruplous people have taken to jacking up prices when doing a barter deal instead of a cash one.
Each of these two points lives off the other. For example, say you could use your barter points to trade for framing supplies from you already prefeered manufacturer/supplier (see point 1) then as an honest business deal you would not "lose money" by doing full barter deals at regualr price. (see point 2) This leads me into my final point, it can be advatages to a business to do 50% cash and 50% barter.
P.S. I am not sure if anyone else here has been to Europe and seen there barter system in full force - they have it down to a science over there...right on the store doors, it says mastercard, visa, and ebb (barter)
Each of these two points lives off the other. For example, say you could use your barter points to trade for framing supplies from you already prefeered manufacturer/supplier (see point 1) then as an honest business deal you would not "lose money" by doing full barter deals at regualr price. (see point 2) This leads me into my final point, it can be advatages to a business to do 50% cash and 50% barter.
P.S. I am not sure if anyone else here has been to Europe and seen there barter system in full force - they have it down to a science over there...right on the store doors, it says mastercard, visa, and ebb (barter)
M
Marc Lzier
Guest
We have an excellent barter system in place in our shop.
It is very simple. We exchange our goods and services for small pieces of paper and metal. These pieces of paper and metal have an agreed upon value and are in turn accepted at other places we wish to do business.
It is very simple. We exchange our goods and services for small pieces of paper and metal. These pieces of paper and metal have an agreed upon value and are in turn accepted at other places we wish to do business.
cfkane
True Grumbler
Marc;
We do the same thing at my shoppe, Only we collect small pictures of dead presidents. They are very pretty and i don't even mind getting more than one of each.
We do the same thing at my shoppe, Only we collect small pictures of dead presidents. They are very pretty and i don't even mind getting more than one of each.
K
KeepFraming
Guest
What happens when there is no extra money available for purchases of non-neccesity items such as framing?...
If the economy slows barter way be a good way to stay in business, a point I feel others are trying to make is the illiquidity of trade dollars, we'll just to think on, real estate is also semi-illiquid...in a market where there is all selllers and no buyers and no cash, one may be well to have a "diversified portfolio of assets...
If the economy slows barter way be a good way to stay in business, a point I feel others are trying to make is the illiquidity of trade dollars, we'll just to think on, real estate is also semi-illiquid...in a market where there is all selllers and no buyers and no cash, one may be well to have a "diversified portfolio of assets...
M
Marc Lzier
Guest
I've re-read your ruminations on the subject and it looks like you are mixing two separate things.
1) Consumers not having money to spend on your good or services. Or having the money, but not the desire to do same.
2) A business not having cash on hand to conduct business as it wishes.
For the first count (1). If your customer base does not actually have cash to spend, then you might have a shop in the wrong neighborhood, or you need to go for a different segment of the population that needs and pays for framing services (possibly business and not personal framing)
People will spend money. They will spend it on you. You need to research what you need to do, to get them to do that. ABN, AWN, Decor and PFM are framing trades that gloss on this, but the bookstore is rife with tomes on the subject. If the spending money thing is still rankling you, go to the library. It's free.
As for the second count (2): You say: "Barter . . . to keep shop busy when things get slow...?" I think you are mistaking the term business with the term busyness. Sorry, but I can keep myself busy all day long with things that are not income producers for me or the company. Your 'bidness' will have ups and down. A slow time is not a time to exert time, materials, and cash to produce work that will not pay for itself. It is a time to take a look at the problem. Why is it slow? What is wrong? What can I do to make more PWG's walk thru my door?
Yes, there is a place for barter as an adjunct to a successful and thriving venture. It is cream and not milk. It takes from, and gives to the fat of your business. However as a practice it will not nourish nor sustain a business in the long term.
You also state: "If the economy slows barter way be a good way to stay in business, "
If the econ slows then it is time for a new business plan. Not a busyness plan.
You are a frameshop, not a treadmill.
1) Consumers not having money to spend on your good or services. Or having the money, but not the desire to do same.
2) A business not having cash on hand to conduct business as it wishes.
For the first count (1). If your customer base does not actually have cash to spend, then you might have a shop in the wrong neighborhood, or you need to go for a different segment of the population that needs and pays for framing services (possibly business and not personal framing)
People will spend money. They will spend it on you. You need to research what you need to do, to get them to do that. ABN, AWN, Decor and PFM are framing trades that gloss on this, but the bookstore is rife with tomes on the subject. If the spending money thing is still rankling you, go to the library. It's free.
As for the second count (2): You say: "Barter . . . to keep shop busy when things get slow...?" I think you are mistaking the term business with the term busyness. Sorry, but I can keep myself busy all day long with things that are not income producers for me or the company. Your 'bidness' will have ups and down. A slow time is not a time to exert time, materials, and cash to produce work that will not pay for itself. It is a time to take a look at the problem. Why is it slow? What is wrong? What can I do to make more PWG's walk thru my door?
Yes, there is a place for barter as an adjunct to a successful and thriving venture. It is cream and not milk. It takes from, and gives to the fat of your business. However as a practice it will not nourish nor sustain a business in the long term.
You also state: "If the economy slows barter way be a good way to stay in business, "
If the econ slows then it is time for a new business plan. Not a busyness plan.
You are a frameshop, not a treadmill.