Yes You Can!

When I approach business owners to do a barter analysis and determine whether or not barter can benefit their business, I often am told:

  Barter is all well and good but what I really need is cash—cash to cover my overhead and to pay my staff.”

In fact, barter can help acquire and maintain reliable and qualified staff . Barter can create some real excitement at the office. Suddenly your employees will be able to elevate their lifestyle and access health benefits that previously were not available to them.

FIVE WAYS YOUR STAFF CAN BENEFIT FROM BARTER

1. AWARD STAFF WITH BARTER BONUSES AND COMMISSIONS. Business owners are often challenged to both acquire and maintain good staff. Often there is no way that a small to medium sized business can compete in the job market with big corporations or government departments. By awarding staff with barter dollars, either by way of an incentive or as a top up to their salary, they can engage and maintain quality staff. Such awards to staff can be a legitimate tax deduction* for you and if the staff choose their purchases wisely it can make a big improvement in the lives of your employees.

2. USE YOUR BARTER DOLLARS TO PROVIDE AN INFORMAL BENEFIT PACKAGE FOR YOUR STAFF. In any barter exchange you will find a variety of professional health solutions available for you and your staff to choose from. Depending on your region, you could have dentistry available, chiropractic treatments, massage therapy, acupuncture, eyeglasses, and many professional therapists. The list goes on. Such health benefit purchases for staff can be a legitimate business expense* for your company and are often not taxable* for the employee. This is a win win for all.

3. Health and medical claims , whether the treatments are paid for using barter or for cash,  are processed the same way. You submit a claim, including the receipt, and the insurance company will refund you all or a sizable portion of the treatment cost in cash. If you or your staff already have benefits you can STILL TAKE ADVANTAGE OF OUR BARTER HEALTH PROFESSIONALS, GET A RECEIPT, AND TURN THAT IN TO YOUR INSURANCE PROVIDER FOR A CASH REFUND. Therefore, you can use your barter to provide a fully tax deductible benefit to staff, even if they already have coverage through their spouse, and they can turn that benefit back into a non-taxable cash bonus*.

4. BARTER CAN FUND YOUR STAFF EVENTS. A common way that members reward their staff is the summer BBQ or the Christmas Party.Using your barter you can have a spectacular staff event which employees will look forward to and appreciate year after year. You can cover everything from the hall to the catering to the decor and the door prizes.

5. KEEP YOUR STAFF FULLY BOOKED AND ENGAGED DURING DOWN TIMES. The rent is paid, the stove is fired up, or maybe the equipment is leased and the truck loaded. Your business is staffed and …..where are all the customers? Almost every business has down times and seasonal slumps. Nevertheless the overhead must be paid and the staff salaries have to be covered. Constant layoffs and lack of sufficient hours can lead to an inability to keep good staff. What better way to keep them motivated than to give them barter jobs during those slower times . If you are in the hospitality industry your staff will fight to serve barter customers. The orders are usually larger and the tips bigger.  But no matter the industry, barter sales are typically less stressful to staff . Everyone wins!

Can you use barter to  help cover your overhead and your staff ? Yes you can!

* Business owners and their staff should always seek professional tax advice when making allocations regarding barter sales and purchases.

A Claim That Cannot Be Denied

My mother told me that when I was little people would stop her in the street to remark on my incredible Shirley Temple locks .

As I grew older I lost the curls and my hair became thick and wavy. At the hairdressers I would often get compliments about how extraordinarily thick and glorious  my hair was. Of course, as was typical of most young people, I was never satisfied with the hair I was born with and wished it was curly when it was only wavy and sleek while it was flamboyant. I was either perming it or straightening it.  I was also never satisfied with the colour of my hair. Over the course of about 10 years my hair went from it’s natural mousey brown to red, to blonde and to brown with highlights. I remember that at that time, in the eighties, I had an annual budget of about $800 for hair styling.Every hair was always in place. It was truly my crowning glory.

When I look back to those days , all I can think is how ungrateful I was for the lovely hair that I had been gifted with . And also, how thankful I should be to have had that time with my hair. I should have cherished every moment, making my hair feel special just the way it was. I should have never let a day go by without letting my hair know it was loved. I should have spent more time with my hair.  In short, I should have realized that time is fleeting and what we have and what we take for granted can be snatched at any moment.

One of the last photos of my Beloved Hair, with me and my family, circa 1988.

  For one day this hair was, without warning, taken from me, succumbing to a little known or understood condition called alopecia totalis.

What is this condition and what did this mean? I soon found that not very much has been discovered about what causes the condition and there is no known cure. Although the condition is not even remotely life threatening I have died of embarrassment more times than I can count. I remember once I caught my wig in the car door and left the car with my hair still in the driver’s seat. Another time I caught my wig in the entrance door on my way into a sales meeting and left a major part of my planned ” first impression” in the door jam. Then there was the time I was having a dance lesson. It was a waltz lesson, I recall. My wig caught on the instructor’s shirt button. We were locked together and –you guessed it–the hair remained in the locked position while I waltzed past.

There are thousands of people with my condition in Canada alone. I met a lady once who told me that she was in the pool with her children and as she was splashing around she saw her hair floating by. Me, I just say I don’t swim when the subject comes up . Even my children don’t know that I am a very good swimmer and diver and once , years ago, water skied in shark infested waters off Hong Kong Island.

Not too long ago I experienced perhaps the greatest humiliation ever. I was on the dance floor ( I guess by now you may have guessed that dancing is my passion) , enjoying a salsa with a gentleman who is fairly short in stature. He lifted his arm to twirl me and swiped my hair right off my head. The wig went flying across the dance floor and I had to go after it , bend over and stick it back on my head. All eyes were on me as I tried to do this as nonchalantly as possible and pretend that this was the most normal thing in the world.

And then there are the eyebrows. Unfortunately, I also lost my magnificent eyebrows. They were luxuriant, they were shapely and they framed my big green eyes perfectly. At least that is how I now remember them. When I had them I considered them to be a pair of pesky bushes that needed constant grooming. I challenge you to try to draw a set of matching eyebrows onto your forehead without any kind of guidelines. Try to get the eyebrows to stay drawn on all evening. Can’t be done. Once I was drawing on my eyebrows prior to an important sales meeting when I took a call and got distracted. Coming back from the sales meeting I glanced in the rear view mirror and what did I see? I had forgotten to draw on one of my eyebrows and I had given the entire presentation with only one eyebrow. No one had said a thing!

People may be shocked to know that alopecia totalis sufferers get absolutely NO FINANCIAL ASSISTANCE from the government when purchasing a cranial prosthesis to restore hair to their scalp. As well , there are next to no insurance benefits provided by private Canadian insurance companies .  My doctor helped prepare the voluminous documents required to apply for funding through the Ontario Ministry of Health’s Assistive Devices Program, which provides grants for many types of prostheses. She was shocked to find out that I was not accepted, because , as she said, I most definitely needed a prosthesis. I also made a claim with my insurance company for a prosthesis and the claim was denied. I launched several appeals, all to no avail. If you have lost a breast, or an arm, or a leg, both the government and insurance companies have programs that will get you the funds needed to help with the purchase of a prosthesis. No one who has lost a breast, or an arm or any other visible part of the body need worry about finding the money to purchase a prosthesis–and they shouldn’t.

However, of you have no hair and require a cranial prosthesis, which is a specially fitted medical wig that will look authentic, fit snugly and comfortably, and NOT FALL OFF , you must find the money yourself. This goes for adults and children. Such devices are in the range of $2500+each per year, and two are required initially. If you do not have the money you have no choice but to wear a regular wig. These off- the-shelf products are ill fitting, uncomfortable and will be sure to let you down just when you need them most.

Without the assistance of the government or my insurance company, finding the dollars to purchase my own prosthesis was impossible. Imagine my delight when a promotion for a hair restoration company  ,HRS Of Atlanta came across the barter desk recently from our affiliate in Georgia. It seems that this company, which provides various hair restoration solutions depending on the situation, is a very active barter member in Atlanta and is always looking to expand their barter sales.

You would expect that, because they are providing this service on barter, the service or the product would be sub-standard . In fact, nothing could be further from the truth in this case. The service has been superb and the quality of the end product has been beyond reproach.A very high quality unit was rushed to me as soon as I placed my order, ensuring that I would not be without some kind of proper coverage from day one. Right now I am eagerly awaiting a custom designed and fitted prosthesis which is being hand crafted for me to my exact specifications . I would never have found HRS of Atlanta if they had not been a member of our barter network of over 50,000 business owners throughout North America. And I would never have known of the wonderful service that they provide,  helping sufferers like myself get their life back.

Janet Brown, A More Beautiful You

And those eyebrow malfunctions I used to have–no more! For two years now I have had my eyebrows semi-permanently inked  by Janet at A More Beautiful You, a barter member right here in Ottawa. In fact, I like the results so much that I enjoy her other services also—semi-permanent eyeliner and lipstick.

Often, people say to me, ” barter is all well and good, but what I really need is cash”. Yes, I could have used some help from the government in the form of a cash grant that they give in unlimited numbers to others who need prostheses. Yes, I would most certainly have put any money my insurance company had awarded me to good use. But while cash can be great if you can get it, barter can have the ability to deliver for you when you really need it, and that is one claim that cannot be denied.

Why NOT Bartering Can Be A Costly Decision

There is a terminology often used in financial services called “opportunity costWikipedia defines this as:

 ..a  key concept in economics, and has been described as expressing “the basic relationship between scarcity and choice“.[2] The notion of opportunity cost plays a crucial part in ensuring that scarce resources are used efficiently.[3] Thus, opportunity costs are not restricted to monetary or financial costs: the real cost of output forgone, lost time, pleasure or any other benefit that provides utility should also be considered opportunity costs.

Did that help you understand the concept? My guess is that it did not. Let me try to put this in layman’s terms that the average business person who is trying to run a profitable business and not bother with fancy titles after their name can understand.

As a Certified Trade Broker I am sensitive to the opportunity costs of my business owner barter members who are in a vulnerable position due to the time sensitive nature of their product or service. It is my role to make sure that their losses from forgone output are minimized.

What is a time sensitive product or service? This is a product or service that sells within a time frame or has a best before date. I will use the hospitality industry and the advertising industry as examples.

When the hotelier or the publisher wakes up in the morning, whatever room remained empty or whatever ad space was not sold yesterday is a lost opportunity never to come around again.

When combining this situation with the low incremental cost of bartering the products and services of hoteliers and publishers it is essential that members of those industries maximize their sales opportunities before the window closes and is lost forever. And barter therefore becomes a very attractive option.

There are many other industries with a similar situation. Here is just a partial list:

Hotels, B&Bs, Resorts,Advertising,Publications,Seminars and Courses, Fitness Clubs,Events–anything where tickets are sold,rentals of any kind–you name it,anything that requires “bums in seats” ( as we old folks used to say), so that could be restaurants, seminars,trade show booths.

Also any product which is quickly becoming obsolete or outdated falls into this category.If they are sitting on a pile of stuff that is going to become outdated or obsolete soon, then the incremental cost it took to produce each item is moot—the 40% ceiling I usually recommend for incremental cost to produce can be thrown out the window. I mean , even if their original cost of sale was 89% if it is sitting in a warehouse not turning back into something the business owner can use to grow their business it needs to be moved and fast!!! 

I have just given a few situations. I welcome any added examples and be sure to send them to me in the comment box.

If you look at the list above you will see that all of the examples have 2 things in common–they have a low incremental cost and they are time sensitive. If you still are wondering what exactly I am talking about you would not be the first. You can always drop me a line and I will analyze your particular situation and give you an honest evaluation of the suitability of bartering your products or services. You can reach me at 877-799-3301 or jane@oneworldbarter.com.

 

related article: what-the-heck-is-the-incremental-cost-and-why-do-i-keeping-harping-on-it/

The Real Estate “In Your Jeans” Cash Conversion

The real estate “in your jeans” cash conversion is really straightforward and it  really works out nicely if you are scrambling to put together the cash to buy another property.

This is how it works—you list your property for sale with one of our members who is a real estate agent. You negotiate the commission with them as usual. However, the real estate agent offers to charge you in barter dollars for their personal portion of the commission, after the brokerage is paid their portion Their portion is typically 2-3% of the total commission .

 

When the sale closes the real estate agent will receive their commission as usual in cash . They will then process a transaction whereby they take payment of their commission in barter dollars. The barter dollars leaves the members account and gets dropped into the real estate agent’s account. At the same time the real estate agent cuts a cheque back to the member selling their property. This cheque can be for a very sizable amount and can really make a difference to the bottom line.

 

This same kind of cash conversion can be done if you are using a real estate agent to buy a property. They can also barter their commission on the buy

 

And this is all perfectly legal. Both the IRS and Revenue Canada have ruled that a barter transaction is to be assigned the same value as a regular dollar transaction and treated accordingly.

related link: Revenue Canada Ruling

 

Real estate agents love this program for the many ways they can benefit from the deal. Check out this related article:

Monday in bartergal land

It’s Monday and I like to start the week off by doing a review of some of the deals I am working on or orders on my desk. I do a little prioritizing and make sure that the urgent requests and time sensitive deals are handled first. So here it is Monday, and what have I got on the go??

Well, a top priority this week is to market one of our cottage resort* members.They have just listed a million dollar property with our real estate agent members and they are going to have to have about $25,000 in their barter account should that deal close (for how a real estate barter deal works and how this resort could pocket up to $25,000 cash from the deal, check out this link.) I told them that, based on their stellar credit with us ( all of our members rave about the resort!), I could float them about $10,000 on the deal and after we take into account their balance in their account we would need to come up with about $10,000 in bookings before the real estate deal went down.

But no sooner did I approve them for the real estate deal than they asked for a further $15,000 in case they decide to  buy a wholesale lot of new tools (by the way, there is about $60,000 new in the original packaging tools in total available) . I can do the deal for them but it is going to mean a big push for the cottage resort so they can come up with the necessary  $10K + $15K. Luckily, members can not only stay in the fully equipped year-round cottages on the lake, they can also enjoy three yummy meals a day and boat rental with bait.  I can book in members from not only Eastern Canada, but also anywhere down the east coast of the US as those US guys in particular like to fish and hunt. Did I tell you I love my job?

What else is on my desk for today? Like anyone, my day fills up with fresh offers, requests and authorizations as the day progresses. But here is a sampling only of what I am going to start the day with:

  • I need to check back on my past weeks travel booking to see that the members enjoyed their stay and that everything went smoothly. I always have a sprinkling of members booked into local hotels or resorts or properties managed by affiliate brokers. Members appreciate hearing from me. They like to know that we are constantly monitoring the quality of our member travel properties.
  • Another thing I like to do is see if any requests have not been filled. I often have requests that I can fill but I have not been able to get hold of the listing member to let them know that they have an order.
  • Monday is a day that I set aside to review what members need to have their goods or services promoted. It could be because they are a seasonal service or product—like flowers when Mother’s Day is coming up, or a hunting lodge when hunting season is upon us. So I’ll post those offers. Or maybe their barter balance is low so I am going to push them a bit more. I tend to not just post offers on the trading floor but also send out personalized e-mails to members who may benefit from their services. For example,our home- staging professional is renewing her ad with a magazine, so she is going to need some barter dollars—I will send e-mails to our real estate industry members to offer her services on barter.
  • I’ll look at my calendar for the week and make sure I am prepared. Today I have a meeting with a member to get information about their event. They are offering marketing and sponsorship packages at their event to members. They have requested a face to face meeting so I’ll be dropping by today. These days there is less face to face meeting but I love to do this. There is nothing like the face to face meeting where we can get to know each other and hash out the best approach for a barter campaign.

I just listed a few things about my Mondays in this post. After all ….I actually have to do these things and not just blog about them.

* member has given permission to use their deal as a training tool for new members and anyone wanting to find out about how barter works.

Is There A Mr Bartergal?

Bartergal with Mr Bartergal

 

Here I am as a platinum blond with Mr Bartergal, Julio Moreno. We like to hang out  together, watching movies, making home cooked meals, and dancing the night away at one of our favourite dance clubs.

 

 

 

 

 

 

 

Mr Bartergal is not to be confused with Barterguy, my business partner, Norbert Paprocki. You can find out more about what he is up to at his postings….coming soon!

 

This Guy Really Does A Good Job Of Explaining How Barter Works

The Amazing Benefits of Barter! Signup for free bartergal newsletter 

Pierre has been bartering now for a few years. He really understands the concept and I often link this helpful video when someone wants to hear about barter from a member’s perspective.

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