Last Updated on December 6, 2022 by Selina Parker
There are many options for raising funds for your business. But what if there was a way to fund your corporation without using cash? A bartering system is a perfect solution! You can get what you want for your business with what you already have.
Here are 13 Reasons to use bartering system to fund your business and start building equity in an asset-based economy as follows.
- Great way to start your business with little or no capital
- Reduce the amount of money you spend on business expenses
- Help you avoid going into debt
- Build equity with an asset-based economy instead of spending cash from your pocket
- Widen your network
- Build a resilient community
- Lower your tax liability
- Less legal and paperwork
- Increase your business’s value
- Lesser risk than cash transaction
- Widen your product’s distribution
- Build a secure portfolio
- Build a more sustainable economy
REASONS TO USE BARTERING SYSTEM TO FUND YOUR BUSINESS
1. GREAT WAY TO START YOUR BUSINESS WITH LITTLE OR NO CAPITAL
You can get the goods or services you need without a monetary medium in a barter system. Network with other companies that has what you need and are also interested in a barter economy.
Be innovative by coming up with other means of exchange system other than barter dollars or services for your business instead of cash, such as equipment and materials you need to get started. You provide a valuable service to others.
2. REDUCE THE AMOUNT OF MONEY YOU SPEND ON BUSINESS EXPENSES
Bartering systems will reduce your business expenses because instead of purchasing what you need, you can directly exchange it with what you already have at a fair market value.
Corporate barter exchanges lessen overhead costs by reducing expenses on goods and services you are already purchasing without really thinking about what they are costing you, which will help to increase profits over time.
3. HELP YOU AVOID GOING INTO DEBT
Because you don’t have to pay cash, you are less likely to go into debt when starting your business. You can barter for what you need instead of paying in cash. You can get what you need in barter and avoid using a credit card. It is beneficial for staying out of debt in the start-up phase.
If you struggle to find a barter exchange group, you may visit the International Reciprocal Trade Association (I.R.T.A.).
4. BUILD EQUITY WITH AN ASSET-BASED ECONOMY INSTEAD OF SPENDING CASH FROM YOUR POCKET
In the exchange, you are also building equity when trading for other goods or services that have value to someone else. You can use this system to start acquiring assets without necessarily having the money to purchase them.
5. WIDEN YOUR NETWORK
You will get to meet new people and expand your network, which will help you build partnerships that can be beneficial.
You never know who might have what you need or want, so it’s great for building relationships with other businesses owners in and out of town.
Widening your network is always a great idea. It can make you more competitive in the marketplace, and you can develop long-term relationships with other business owners.
6. BUILD A RESILIENT COMMUNITY
It strengthens communities by encouraging bartering for services, goods, or labor within local neighborhoods and between businesses and individuals.
It is a more sustainable exchange system because it reduces the need to go into debt while building equity with an asset-based economy instead of spending cash from your pocket.
7. LOWER YOUR TAX LIABILITY
Developing a system of exchange that is more equitable than merely buying products with currency will reduce your tax liability while helping to strengthen your community.
You may visit the Internal Revenue Service website for more tax information on a bartering system.
8. LESS LEGAL AND PAPERWORK
Unlike cash transactions, where you have to go through the hassle of doing paperwork and reporting it, bartering transactions happen between individuals or businesses without following complicated procedures.
Both parties have less risk when it involves no currency for you and your trading partners. You can avoid any additional legal work you may need for cash transactions, saving time in business operations.
9. INCREASE YOUR BUSINESS’S VALUE
By giving away something of equal or greater worth in return for what you want to barter for, you can increase the value of your business over time without impacting cash flow or budgets.
It is a great way to build equity with an asset-based economy instead of spending cash from your pocket and increasing the value of your business over time, despite a monetary crisis.
10. LESSER RISK THAN CASH TRANSACTION
Unlike a monetary economy, money is not involved in a barter exchange, reducing the risk of loss or devaluation. These transactions are safer than cash transactions because there is no currency involved.
There is a lower risk for both parties when there is no currency involved, so you can avoid any additional risks you may need for cash transactions, saving time in business operations.
11. WIDEN YOUR PRODUCT’S DISTRIBUTION
Bartering helps ensure the proper distribution of goods and services because it reduces costs associated with marketing, capital outlay, inventory management, etc. It also allows you to expand your business rapidly without waiting for loans or financing.
12. BUILD A SECURE PORTFOLIO
A barter system is a powerful tool in building equity and assets because both parties benefit from the transaction.
The difference between this method of exchange and using cash for purchases is that you can build something with it, like an asset or even equity over time which will help you get started without capital.
13. BUILD A MORE SUSTAINABLE ECONOMY
Bartering helps reduce the impact of your business on our environment by reducing energy consumption, carbon footprint, and natural resources.
This method of exchange is more sustainable than cash transactions because it reduces waste and inefficiency in business operations which will positively affect the environment over time for all businesses.
These are the thirteen reasons you should consider bartering to fund your business. Have you tried any of these methods before? If not, perhaps it is time to consider bartering as an alternative way of funding your venture.
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ABOUT THE AUTHOR
“What began as a life and career coaching services company to aide entrepreneurs through the early-stage challenges and tough transformations of starting a social venture has evolved over the years to include mergers and acquisitions, organizational consulting, and business growth advisory services to mission-driven organizations that strive to improve access to basic physiological, safety, and security needs while increasing their profit margin. Clients include founders and organizations with the purpose of addressing deficiencies in delivering quality healthcare and mental health services, sufficient employment, access to clean water and air, safe shelter, adequate food, and more.”