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May 22nd, 2008Don't be tempted to do your own bookkeeping and tax preparation advises Portland tax professional Joseph Anthony. Small business startups with a few partners may decide to do everything they can themselves and contract out the rest. However, just because you can do something, doesn't mean you should.
Most do not consider indirect cost such as their time and supplies they had to purchase when doing something that should be done by someone else. Anthony advises at some point early on, a small business should hire a professional for their tax returns and at least some of their bookkeeping.
One main reason is that tax professionals are more than just preparers. It is important to consult with an accountant outside of the crunch of filing season to be sure you are doing what you can to reduce the tax bill. For instance, many small businesses can benefit from creating a SIMPLE retirement plan for their employees. But, it generally has to be done by October 1 in order for there to be tax benefits for that year.
Keeping your bookkeeping accurate and in good order is not only smart business but also can keep you from having legal problems. A professional, either in-house or hired from the outside, needs to have knowledge of such things as double-entry and how to make a journal entry. Also, your books need to be as organized as possible so the tax pro can do their job effectively and in the least amount of time.
Probably the biggest thing is to be sure your tax pro and bookkeeper work together on your behalf. For instance, a bookkeeper will not know how assets are being depreciated or written off, the accountant will have to advise on that. Bookkeepers and tax pros serve two purposes; they keep you out of trouble and allow you to focus on running your business rather than getting bogged down in financial matters.August 17th, 2006By Martin Lukac
What is the one bill that you often forget to pay? You may be thinking that you pay all of your bills, but you are missing one.
You need to pay yourself.
The correct way to manage your finances has you building a greater net worth each year. You have more money this year than you did last year. However, many of us simply use every cent we have on new cars, clothes and things that don't last.
You are letting one bill go long overdue. It is the bill for your future. The longer you put off this bill, the more it will cost you in the long run. If you ignore it, you will eventually face paying big time. And not just in money.
You will gladly begin to pay off your debt. You will gladly take on more debt. But think about what you are really paying for. Are these items that you will have in 30 years from now? Your fun now is costing you a comfortable retirement later.
You can't count on Social Security or Medicare. They are probably not going to be around in 20 years. The only thing you can depend on is your savings.
You are the only one that can make it happen. You can give yourself and your spouse the greatest gift of all -- a comfortable and secure future. Or you can sabotage it. But you can't just ignore it anymore. Because I'm telling you that there is a better way.
Start by eliminating your debt. Every dollar you are paying in interest is taking hundreds of dollars away from your retirement. Think I'm just blowing it all out of proportion? Run a few online calculators to see 1) how long it will take you to get out of debt and 2) how long it will take you to save for retirement at your current pace. If you aren't saving anything and have no plans to do so, you are planning on working until you die. No getting sick, no rest, no breaks. Because there will be no money.
It is a challenge. Every financial decision you make now will affect you for years to come. That is why the way you spend your money is so very important. Pay off your debt, don't incur new debt and save aggressively for your retirement. In this day and age, it is common to work for thirty years and then live for thirty years in retirement. You may think that thirty years is a long time to save, but remember that thirty years is a long time to not have any money. Prepare for your future.
Simply keep in mind how great it would be to retire comfortably. You can do that if you start now. If you have thirty more years, then great. You have time to really build up your worth without sacrificing too terribly much. Just avoid the bad debt of credit cards and unwise auto purchases. If you only have ten or so years, then you are going to have to sacrifice, but it is still possible. The key?
Start right now. Pay yourself and your future.
Martin Lukac represents http://www.RateEmpire.com and http://www.1AmericanFinancial.com, a finance web-company specializing in real estate and mortgage rates. We specialize in daily updates, mortgage news, rate predictions, mortgage rates and more. Find low home loan mortgage interest rates from hundreds of mortgage companies!
Article Source: http://EzineArticles.com/?expert=Martin_Lukac
March 8th, 2006December 19th, 2005by Peter Leeds
The Penny Stock Insider
Financial statements are a useful tool for judging the health of a company, and for comparing it to its competitors. They show what the company owes and owns, the profits or loses it has made over a given period, and how their position has changed since their last statement. Generally if you can tell which direction a company is heading in, you can also forecast future stock prices with some accuracy.
Gaining a basic knowledge of financial statements, and applying this knowledge when choosing or assessing investments can help you pick tomorrow's winning stocks, while avoiding tomorrow's losers.
Of course, financial statement analysis will not always factor in significant news events, unexpected incidents, changes in management, and other factors which may influence share prices, but it provides a starting point from which to gauge the present value of shares, independent of future occurrences.
The following report details some simple financial statement explanation and analysis methods. Although the topic can get much deeper and more complex, this article is designed to give investors the ability to understand the numbers and simpler of financial ratios, and be able to use that knowledge to assist them to make better decisions when doing their due diligence.
Balance Sheet
The balance sheet shows a company's financial position at a specific date, usually the last day of the company's fiscal year for annual reports. One side of the balance sheet shows what the company owns and has owing to it, called assets. The other side represents liabilities, which are what the company owes, and also has shareholders' equity, which represents the excess of the company's assets over its liabilities. Shareholder's equity is often referred to as book value.
Total assets are equal to the sum of the company's liabilities plus the shareholders' equity. In other words, take away liabilities from assets and the remainder is what value is owned by the shareholders.
The Balance Sheet can be used to uncover the value of the company, the debt load, and cash position.
Earnings Statement
Also called the Income Statement or Profit and Loss Statement, it shows how much revenue a company received during the year from the sale of its products and services, and the expenses the company incurred due to wages, taxes, operating costs, etc... The difference between the two is the company's profit or loss for the year. The amount left over after taxes is the net earnings.
Net earnings are basically saying how much money the company 'really' made over the course of the year. Some companies can have low earnings if they used much of their money for research and development, to acquire other companies, fuel aggressive growth, move into new markets, etc, which is much more favorable than if the company had low earnings because they didn't generate many revenues, their expenses were too high, etc...
Statements of Changes in Financial Position
This shows how the company's financial position changed from one year to the next. Also called the cash flow statement, this details how the company generated and spent its cash during the year.
This statement can be used in evaluating the liquidity and solvency of a company, and to assess the ability of that company to generate cash internally, to repay debts, to reinvest in itself, etc...
Sources of Financial Reports
Certainly you can get financials from the companies themselves. Most will gladly fax them to you, or mail you their latest quarterly and annual reports.
However, a faster way to access the information can be by Internet. For example, go to Yahoo.com and choose stock quotes. Enter the ticker symbol for the company you are interested in, and Yahoo will provide its most recent press releases, which will include past quarterly and annual reports with the financial statements. You can also check the previous reports to compare which direction the company is moving in and look for trends (i.e. increasing debt load, unpredictable earnings, decreasing revenues, erratic revenues, etc...).
There are also many other Internet resources which provide similar information, such as wsrn.com, bigcharts.com, (canada-stockwatch.com for Canadian issues), etc...
Comparison Shopping
To familiarize yourself with some of the numbers, try looking up the financials of three companies you own or are interested in.
(Balance Sheet) Which of the companies has the greatest long term debt load? Do any of the companies have greater current liabilities than current assets? Compare the current share price to the shareholder's equity (book value): is the share price much greater or less than the book value?
(Earnings Statement) What were the revenues of the most recent year (or quarter) and does the number represent an increase or decrease from the previous period? How much money per share did the company earn (or lose) in the most recent period?
(Statement of Changes in Financial Position) Has company debt been increasing or decreasing? What was the greatest expense the company incurred according to the statement?
Decision Making
Understand that financial statements can provide investors with a partial fundamental snapshot of a company. They only represent one piece of the puzzle. Remember that, while financial statements can help investors compare several companies, comparison is limited only to the numbers provided.
In other words, you can see that one company made money while the other lost money, but you don't know which has the better technical outlook (based on analysis of the trading chart), which is a potential takeover target, which will have the best future earnings, etc...
As well, the impact of financial statements tends to be long-term as it relates to share prices. Four quarterly reports showing increasing earnings may push the stock into an upward trend as the market begins to recognize the fundamental improvements of the underlying company, but one quarter of increasing earnings may or may not have a significant impact on shares.
Therefore, most investors use financial statements as part of a greater overall decision making process. Certainly, though, an understanding of and familiarization with the data can benefit any investor who takes the time to make educated trading decisions.
Important Points
Many growth companies don't need nor are expected to have positive earnings. Instead, they generally accumulate debt as they focus on research and development of new technologies, aggressively move into new markets, fight for market share with competitors, etc... Other companies with minimal growth prospects on the other hand, have more importance placed on actual earnings, lowering operational costs, etc...
Be sure to understand what numbers are important and unimportant to a specific company based on their situation and the position they are in. This can be done easily by going to wsrn.com and doing an industry comparison on the company in question. Do companies in the same industry seem to have positive earnings, or is the focus on growth, research, etc... Are they a larger or smaller company than the industry average, and are they growing faster than the others?
Read the fine print to make sure the numbers you are reading have been audited, rather than being just company estimates, or unverified results. This generally is not something you need to worry about with most exchange-listed companies, but it is important practice.
Many annual statements will begin with positive news about sales or revenue increases, or other positive comments, but further reading reveals that the company actually lost more money, increased debt, or had a poor quarter or year. For most companies their financial statements are part of their promotional material and they need to make the information sound as impressive and positive as possible, even if the overall results were disappointing.
Be wary of one-time earnings or loses. For example, a company may win a huge lawsuit settlement and the influx of money gives them positive earnings for the quarter. However, how would they have done when the one-time extraordinary is ignored?
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Peter Leeds, one of North America's leading Investment Coaches, is a self-made millionaire who has created his fortunes on the stock markets. He has also empowered thousands of individuals to do the same. He offers sites like http://www.pennystockinsider.com
to help penny stock investors make wise decisions.September 14th, 2005by Mike Beitler
As a management consultant, I have seen some poorly conceived retention policies at otherwise well-run companies. The philosophies underlying these policies lack some basic knowledge of two things:
1. human nature, and
2. the changing world around us
Human Nature
Let's start with human nature. The practice of management requires an understanding of how people work. Successful managers can be forgiven if they do not know how a particular machine works, or how to debit and credit the general ledger, or how to write HTML code. But, managers must know how people work. Specifically, they need to know how people work well.
People are motivated by goals. their own! Organizations that help individuals achieve their goals and career aspirations have less trouble with retention. Are you helping your best employees achieve their goals?
I recently read some research findings that were just plain silly. The findings you ask: Workers leave organizations for two reasons:
1. they feel mistreated or unappreciated
2. they can get more money/compensation from another organization
The researchers went on to say, most workers are unaware of more money at other organizations until they feel mistreated or unappreciated. Did you catch that? If not, re-read the "two" findings.
Here's my interpretation: If you treat your workers well and make them feel appreciated they will stay with your organization; money is not the primary driver for workers leaving. Help you workers achieve their goals. I believe "appreciative" workers are more motivated than "happy" workers.
Before you think this is more "soft" management talk, let's look at some "hard" facts. The average cost of hiring a new worker is one-and-a-half times the worker's annual salary. And, the average worker will need a year to master his/her job skills.
The Changing World Around Us
As the world changes around us, we must change the way we think about retention (and everything else). Gone are the days of the homogeneous workforce. The world is being changed by unstoppable trends: globalization and an aging workforce.
Future work teams will include three generations of workers (a 23-year-old worker, a 48-year-old worker, and a 73-year-old worker), workers with different religions and nationalities, and workers with dramatically different life experiences.
The brain drain in developed countries can be slowed by retaining older, highly skilled workers. But, that is not nearly enough. Companies must compete globally for talent. (And remember what is necessary to retain these individuals. We must understand their individual goals and career aspirations.)
American companies that hope to depend on American talent exclusively will fail miserably. American knowledge workers are losing their competitive edge. Let's look at some more "hard" facts:
1. In China, 42% of students earn undergraduate degrees in science or engineering. In the U.S., the figure is less than 5%.
2. Only 70% of U.S. high school students graduate. The U.S. public education system was recently ridiculed by a British news journal. When you consider that the British public school system is arguably the worst in Europe, Americans should hear this as a wake-up call.
3. Only 32% of U.S. students leaving high school qualify to attend a four-year college or university.
Add to this some alarming facts about off-shoring. One organization recently said it was off-shoring jobs to India not simply because the cost was lower, but because the quality of work was better. The off-shoring of high-level professional jobs (such as engineering and IT) is now a common practice.
Conclusion
Organizations must do two critical things:
1. develop retention policies that recognize the need to understand the individual workers' goals and career aspirations, and
2. learn how to recruit and develop talent from around the world.
These are big changes for most organizations. Is your organization ready for these changes?
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Dr. Mike Beitler is the author of "Strategic Organizational Change." Get a free 7-part mini-course and learn more about the book at http://www.strategic-organizational-change.comAugust 29th, 2005by Laura Orsini
In What Subject Are You An Expert?
If you're a small business owner, presumably you are an expert in your industry or profession - or you would not be in that industry or profession.
Expertise does not mean being the best in the world at something - like Lance Armstrong or Bill Gates. Can you imagine being ranked #1 IN THE WORLD at a particular skill or talent?? It sure would be nice - but it doesn't happen for most of us. And yet many more of us are experts than we may realize.
With more than 6 billion people in the world, good thing it's utterly unnecessary to be the best in the world at something to qualify as an expert. All expert means is that you know your subject BETTER THAN MOST people. American Heritage Dictionary defines an expert as "a person with a high degree of skill in or knowledge of a certain subject." Given those more relaxed standards, chances are pretty good you know a great deal about at least one particular subject, meaning that you are an expert in some area.
So you've given it some thought and have acknowledged that you really are very good at something. Canvas pool covers. History of birdhouses in America. Ways to help college freshmen succeed. The subjects are limitless - but you ARE an expert at one of them.
Question: What are you doing with that knowledge and expertise? If "using it to build credibility in my area of specialization" is not your answer, it should be!
Why Credibility?
Simple. Credibility is the thing that makes people respect you as an expert. It's the thing that gives you an edge because it causes people to seek you out for your knowledge. Credibility means the quality of being logically or apparently valid. And with credibility comes authenticity, believability, genuineness, legitimacy, visibility, trust, plausibility, reputation, and word of mouth.
Are those qualities helpful in building a successful business? You'd better believe they are!
Benefits Of Creating Credibility For Yourself / Your Business
Perception of Trust - Credibility creates an implied trust that decreases your need to work as hard to prove yourself. People trust you if you have credibility.
Knowledge Showcase - Credibility allows you to share useful and/or entertaining information about your area of specialization that draws added attention to you/your business but is not confused with advertising.
Implied Quality - Credibility carries with it an assumption of due diligence. For example, if Oprah recommends a book, do people bother to read other reviews or do they run out and buy the book? Deserved or not, Oprah's opinion carries some of the highest credibility in the world.
Increased Exposure - Credibility enables you to reach potential customers who fall beyond the reach of your traditional marketing efforts.
Improved Recall & Recognition - Credibility reduces your audience's resistance to your marketing message. With traditional advertising, a customer must hear your message as many as 21 times before they recognize your message as your message, remember the contents of your message, and are moved to take action.
Heightened Demand - The more credibility you have, the more likely someone is to want to pay for your product or service.
Brighter Visibility - The more your credibility increases, the more likely people are to seek you out to suggest joint ventures and other opportunities.
How Can You Build Expert Credibility?
There are many ways to increase your credibility, some of them more instant in nature, while others require a more plodding, long-term effort.
Get interviewed by the mass media. PRO: Provides immediate visibility. CON: Is inordinately difficult to accomplish. KEY: The old 80/20 rule - put the large majority of your efforts into more realistic goals, but never neglect the attempt for widespread coverage entirely.
Contribute to mass media publications. PRO: Offers virtually instant credibility. CON: This market is neither specialized nor particularly focused on your industry. KEY: Regular appearances, like a featured column.
Get interviewed by or contribute to niche media outlets. PRO: Is easier to achieve than national exposure. CON: Offers less exposure than national outlets. KEY: Write or speak as THE expert in your field.
Get a blog. PROS: Easy to do, very inexpensive, and most blog providers have syndication technology built right in. CONS: Everybody's doing it, and just because you write does not mean anyone will read. KEYS: Write more than one blog on hyper-niche topics, cross-link them, and promote them just like you do your Web site.
Try Podcasting. PROS: Almost as easy as blogging, but with audio - once you learn how; new listeners are seeking Podcasts daily. CONS: Finding the resources to learn how to Podcast is still a challenge; attempting to produce a quality show is more difficult than it seems. KEYS: Commit to a niche topic, have fun, and experiment until you find your own unique show format.
Write! Articles, media releases, books, info products, etc. PRO: It's the easiest way to create visibility. CONS: It takes time, effort, and research; may require you to hire an editor. KEYS: Test various markets; develop a system.
The trick to creating expert credibility and its subsequent increased publicity - even notoriety - in your field is to GET OUT THERE! No matter how good you are at what you do, no one's likely to stumble over your genius as you quietly plod away at your desk or in a corner of your shop. You must draw attention to yourself like a beacon. However, with some directed and dedicated effort, you can achieve expert credibility in your industry and race to the forefront of your profession.
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Laura Orsini is an editorial consultant, helping small business owners use words to build credibility and enlarge their client bases. For further information regarding a viable alternative to the credibility-building methods mentioned in this article, join Laura and fellow credibility expert Allan Sabo, of Alti Success Strategies, for their next tele-class, "Credibility-Building Secrets Revealed." Visit http://www.credibilityexpertspublishing.com/telsem-landing.html for dates and times.August 18th, 2005Ready to start playing with your money? Not interested in complicated businesses or boring bank C.D.'s? Here are some methods that aren't quite a business because you can do them once, or just when you feel like it. Start small and the risk is small.
Loan Sharking
Years ago a friend got a good job when I loaned him $300 to buy the necessary tools. I charged a $6 per week loan fee (don't call it interest) until he paid in full. That's more than 100% annual interest, and yes, we're still friends. Check the laws in your area if you try this, and take collateral. I don't loanshark any longer, but in my early twenties I loaned as much as $2,000 at a time ($100/month loan fee), and only once was stiffed on a small loan.
Investing In Other's Expertise
John showed me several car magazines before I understood why an old fiberglass car was a good deal at $2,300. What's a Corvette? He convinced me to put up the money, and after a new transmission for $900, he sold the 1976 Corvette for $4,300, netting us $1,000. I took half the profit ($500) for putting up the money for the two weeks.
I've done this many times with friends who know cars but don't have cash. Incidentally, if I had paid a $50 cash advance fee and 18% interest to raise the money with a credit card, my profit would still have been over $400, and John did all the work. I love playing with money. Do you have any friends who know about boats?
Buying Estates
My wife and I met a couple who buy out estates, sell some of it at flea markets, then run the rest through auctions. They've made a living at this for years. After negotiating to buy a whole house full of stuff, thay load up their trailer. If they don't want to do the flea market thing, they auction everything on Sunday afternoon for a nice profit.
If you're a good judge of value and have an auction nearby, you could also do this with rummage sales. Offer $100 for everything, then auction it off piece-by-piece. An auction near us lets anyone in, with no fee to enter - just a 25% commission on anything sold.
Playing With The Casino's Money
When I worked the roulette wheel at a casino I saw many people foolishly writing down the numbers that came up. Their theories were mostly nonsense. Casinos welcome these players and even hand them the pen and paper.
One man, however, was actually scientific about it. He found a bias in the wheel, after "charting" it for more than 5,000 spins. A number pays 35 to 1, but one of the numbers, due to manufacturing imperfections or whatever, was appearing 1 in 27 spins, instead of the average 1 in 38 spins.
He bet $10 a spin, and he profited $80 for every 27 spins of the wheel in the long run, or about $100 per hour. Since the ups and downs are dramatic, this is not for the faint-hearted. Even though he made tens of thousands, I saw him lose as much as $700 in a night. Remember too that not all wheels have biases (the casino eventually replaced that wheel). Have you ever tried "card counting" in blackjack?...
Steve Gillman has been studying every aspect of money for thirty years. You can find more interesting and useful information on his website; http://www.UnusualWaysToMakeMoney.comAugust 18th, 2005Different types of loans are available for almost every aspect of your life: personal loans, car loans, secured and unsecured loans, home loans, homeowner loans, student loans, graduate loans and career development loans (CDL). If you’ve suffered from credit problems in the past and now hold sub-prime characteristics, then you will be eligible for adverse credit and adverse loans. You can always borrow money these days, but it is crucial to read the small print as the difference between interest rates is enormous and stories of people forced to pay off amounts which are five times the amount of their original loan are not uncommon.
There are also numerous stories on unemployed couples being sold loans, such as the case of Julie and Kevin Davies, reported by the BBC. The couple were already experiencing difficulty in paying off their existing debts of ?,000, when they were sold another ?0,000 loan by Lloyds TSB.
Loans of ?,000 to ?5,000 can be taken out and repaid over a period typically varying between six months and 10 years depending on your credit history and available finances. Loans are usually secured or unsecured. Secured loans are tied to your house, so you can be forced to sell the house if you are unable to make the repayments. Unsecured loans do not impose the same restriction, though a default on repayments may result in being “credit blacklisted? Once blacklisted, you may get future credit card, mortgages and hire purchase applications rejected, as well as face a potential higher rate of interest for all existing debts. It is absolutely crucial that you shop around for a loan and not just through the high-street banks. The internet offers a wealth of information available and there are many sites which compare the prices of products, and to really ensure you get a good deal ?compare the different comparison sites. In the UK moneyfacts, moneyextra and ( moneynet ) offer price comparison services for a wide range of loans, amongst other financial products. These sites also offer consumer information guides, which you can either print directly off the website or download on to your computer.
Do read all the terms and conditions carefully and ask friends, family and your financial adviser / bank adviser if you don’t understand a particular statement. The annual percentage rate (APR) is particularly important and can make a difference of thousands of pounds over the term of the loan.
Unsecured loans can be purchased from building societies and banks, as well as certain high street shops. Unsecured loans may be taken out for something specific or simply to make life more ‘comfortable? The process usually involves:
* Requesting a typical amount for the loan * Discussion of interest rate (APR) and possible loan payment protection insurance * A credit check, you may wish to get one of these first, so you know what to expect * Reading the terms and conditions and then signing the agreement * Money can then be transferred into your account
In the discussion of secured versus unsecured loans, moneynet explains that although secured loans can offer lower interest rates and repayments, many people do not wish to jeopardise the potential loss of their home in the default of a repayment of a secured loan. In unsecured loans, pay attention to the difference in APR, term of the loan and any additional charges such as an early settlement charge or redemption penalty.
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About Rachel: Rachel writes for the personal finance blog Cashzilla: http://www.cashzilla.co.uk Rachel is a disillusioned, disaffected and broke graduate, exploiting new media for financial therapy. E-mail: rachel@positiveinterest.com Phone: 0131 561 2251. Article Source: http://www.valuablecontent.com
August 18th, 2005by Sue and Chuck DeFiore
Starting a business is like starting your own baseball team. Start-up (Spring training) is when you are doing your research, deciding on a business name, zoning requirements, setting up your business, deciding on what form your business will take (sole proprietorship, corporation, LLC). You're assembling all the parts of your business (team), getting ready for the season (your opening day).
Once spring training is over, and the season begins (your business is open) you start making your run around the bases. Getting to first base is the hardest (obtaining your first customer, making your first sale, doing your first consultation). You are helped along to second base by the support staff (players) you assembled. Moving around the bases constitutes all the steps, hurdles, obstacles, however you want to think of daily business grind. This is part of running a business ( and what the game of baseball is all about). Having game plans to deal with certain contingencies.
Being aware of what your staff is capable of. Some of your staff will be single hit players. Others will hit doubles. Some will hit or make the triple play, while others will hit home runs. Your employees (players) look to you, the business owner, (their coach), and learn from you. They will look to you for direction (signals), on how they should respond (play the game).
The season (your first year in business) gives you the opportunity to assess your staff (your team) to ascertain where they work best. Do you need to make changes (change the line-up). Obviously, some will perform better than others. It's up to you, as the leader (coach) to decide who belongs in what position, where their strong points are, where their weaknesses are, and how to utilize them to the best of their abilities. Be sure to set up staff (team) meetings.
How successful your team is (your business) will be determined by the end of the season. Are you just one of many new businesses in your area, or will you make the playoffs (distinguish your business, find your niche, make a name for yourself in your area).
Making the playoffs and/or winning the championship means your business has made it. You paid your dues. You're in it for the long run. You're part of the business community (recognized by the other teams).
Now you're ready to play every season. You use spring training of each year to feel out the other teams (find out what your business competition is doing) and make any adjustments you need to keep your business (team) in the thick of things for the coming year.
If you listen real carefully you'll hear......"Let's play ball!"
Copyright 2002 DeFiore Enterprises
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Interested in having your own successful, home based creative real estate investing business? Chuck and Sue have been helping folks start successful home based businesses for over 19 years, and we can help you too! To see how, visit http://www.homebusinesssolutions.com for the latest FREE tips and tricks, educational products and coaching in creative real estate investing and home based businesses. No time to visit the site? Subscribe to our "how to" Home Business Solutions Digest, it's like having your own personal coach. Visit http://www.hbsdigest.com to start today.August 18th, 2005by Ann Zuccardy
Barter is becoming an increasingly popular method of commerce. The U.S. Department of Commerce estimates that 20 to 25% of world trade is now barter. Corporate barter is now a 20 billion dollar industry. It seems as though everyone from the big corporations on the New York Stock Exchange to small home based businesses are jumping on the barter bandwagon.
I never thought about barter as a tool for building my businesses. That changed in April when I joined a local barter network in Vermont. For a small membership fee and a small commission on each trade, I now have access to almost 200 (and growing) local merchants' products and services including everything from popular restaurants, to spa services, electricians, hotels, rental cars, landscapers, and yes, even flying or sailing lessons!
How does it work?(Most of the big networks function in this way.)
When you join the network, you receive a no interest line of barter credit. Barter credit is similar to the credit line on your credit card. You can use the credit as you please and when you trade your company's goods or services, you receive barter dollars (par with US dollars) credited to your account.
Your business is listed in the network membership directory. The listing provides basic information about your business and buyers contact you directly.
When someone in the network wants your product or service, you authorize the transaction according to the agreed price and the system keeps track of the details for you. It isn't necessary to purchase goods from the person who purchased from you. Your trade dollars can be used to purchase from any other network members.
You receive a computer generated monthly statement showing your barter activity. You pay a small commission based on the amount of barter dollars transacted. Think of it like an interest rate on a credit card only it costs much less and has more benefits.
Benefits include:
Barter increases new business: Attract customers and referrals who wouldn't have known about your business otherwise. Members of the network are likely to choose you over the competition if there is no outlay of cash. This in turn, will increase your cash sales, simply because your product is gaining exposure and referrals.
Barter expands your customer base: Expand your market while maintaining your existing cash customer base. Please your barter customers and they are sure to tell other potential customers all about you.
Barter enhances your lifestyle: Use your barter credit for whatever you want in the network without using credit cards or spending cash. If there is a service or product that does not exist in your network, recruit a business that provides that service. Many barter networks pay you a referral bonus in the form of barter credits if you recruit a business they accept into the network.
How does one choose a barter network?
Do an Internet search on Google to find a reputable network. The beauty of the Internet is that you don't have to live in the state where the network is administrated.
Talk to the person administrating the network. Make sure he/she answers all your questions to your satisfaction and doesn't try to hard sell you.
Make sure all of the conditions are in writing and be sure you understand all network trading rules and limits before you sign or pay anything.
Check to see what other businesses participate in the network. Are they businesses you respect, admire, and with whom you'll want to do business?
Tell your friends and other business owners. Spread the word about barter. You'd be surprised at how little people know about this method of conducting business.
Get involved. Go to meetings or mixers. You get as much out of the experience as you are willing to put into networking. Remember, networking and sales are all about creating relationships.
Barter has created new power for my businesses. I feel good that I am supporting small companies like my own who I may have never met otherwise. Could barter work as part of your marketing plan?
Copyright 2005, Ann Zuccardy, All rights reserved.
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Ann Zuccardy is a freelance technical and copy writer with 17 years of industry experience in marketing and technical communication. She currently consults with IBM in Essex Junction, Vermont where she writes software user manuals, training guides, and release notes. Ann is also the owner of Vermont Shortbread Company. She can be reached at http://www.wordbrains.com.
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